Hilton HHonors restructured its hotel award categories Jan. 15, 2010. The structural aspect of the hotel awards for the new “Category 1 to Category 7” system and the number of points required for each award category were published on the Hilton HHonors Web site Oct. 21, 2009. The grey area for HHonors members was the category placement of specific hotels for HHonors award nights within the new seven category system. The 2010 hotel award category for over 3,500 hotels was not publicly revealed to members until changes went into effect January 15.

Most Hilton brand hotels have remained in the same HHonors category for several years. Still, I refused to believe Hilton HHonors would make a system-wide loyalty points devaluation. The worst hotel economy in decades, guest occupancy spiraling down month after month throughout 2009 and room rates dropping faster than a 30-story elevator was not an environment conducive to points inflation.

Hilton HHonors proved me wrong. The scope of hotel repositioning among award categories was staggering to me. January 15 revealed HHonors hotel award nights require more points at about 83 percent of Hilton-branded hotels globally. Approximately one percent of hotels require fewer points in 2010. This is one of the most extensive award redemption adjustments among major hotel loyalty programs in the past 10 years.

Hilton Worldwide has over 3,500 hotel properties. Free night awards were available for 20,000 points or less at more than 1,300 hotels in 2009. As of January 15, an award night for less than 25,000 points is offered at 159 hotels.
Category 2 hotels dropped from 20,000 points to 12,500 points for a free night award. The reduction in points was an opportunity for HHonors to mitigate points devaluation by keeping the new category 2 heavily populated with hotels. There were over 1,150 hotels in category 2 in 2009. This HHonors award category shed more than 1,000 hotels in the January changes.

HHonors does not need to change credit card advertising for potential nights earned with new cardmember bonuses, although the new HHonors category 1 award at 7,500 points per night is the most sparsely populated category. Many of the old category 1 hotels shifted to category 2; however, the majority jumped to category 3 and are now 25,000 points per night.

In 2009, there were slightly more than 300 hotels requiring 35,000 or 40,000 points for one award night. In 2010, approximately 750 hotels will set your HHonors account balance back 35,000 to 50,000 points.

HHonors assigned 117 hotels to the new category 7 at 50,000 points for an award night. Most of these hotels were formerly category 6 properties at 40,000 points per night, but 22 category 5 hotels also shifted with an award night increase from 35,000 to 50,000 points. Even worse, the 6-night VIP elite award increased 50 percent for these formerly category 5, but now category 7 hotels.

The primary enhancement HHonors made with 2010 changes is availability of VIP elite awards for four or five nights. This is a consumer friendly award option for members who did not desire or just did not have the time for six-night stays at one hotel.

Many hotel loyalty programs shift hotels between award redemption categories each year. Some hotels go up a category, most hotels stay in the same category and some hotels even go down and need fewer points for a free night. Marriott Rewards made a major adjustment increasing the cost of multi-night rewards in 2009, but made only minor award category shifts for hotels. Starwood moved twice as many hotels down in award category than up in 2009. And goldpoints plus restructured hotel award categories Feb. 1, 2010 to reduce the cost of hotel rewards at 300 high-end Carlson Hotels.

Loyalty points inflation since 2003 is HHonors rationale for their changes, but the timing of a major devaluation in points as hotel room rates have been in decline for over a year, and the lack of transparency with HHonors loyalty members is irrational to me.

I find it unconscionable HHonors did not give loyalty members the opportunity to view specific hotel category changes and allow a booking window to redeem points for award nights before the higher category awards took effect. Giving HHonors loyalty members the time to plan travel and book awards before they skyrocketed in cost is just common hospitality.

Priority Club Rewards “Luckiest Loser” February promotion had a smart marketing pitch. HHonors changes were portrayed as HHonors point balances next to the number of vacation nights “lost” at specific hotels after award category changes. Personally, I am a loyalty traveler who tabulates hotel points in terms of free nights available for my next vacation.

Hilton HHonors’ action to with hold hotel category placement from members until after changes took effect demonstrated Hilton Worldwide did not care sufficiently for its loyalty members who value HHonors points as Hilton hotel dreams.