A Smart Post-"Devaluation" Day (D-Day) Redemption Strategy for High-End Hilton Properties

Discussion in 'Hilton | HHonors' started by NYCUA1K, Apr 6, 2013.  |  Print Topic

  1. NYCUA1K

    NYCUA1K Gold Member

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    This is very interesting. If the so-called "devaluation" got you down, read on.

    I was not quite familiar with the category of Hilton Honors Rewards Stay called Room Upgrade Rewards defined as follows in the HHonors Terms and Conditions (T&C):
    • Room Upgrade Rewards - Members can use HHonors Points to upgrade a confirmed, existing reservation to any premium room (any room or suite categorized above standard room designation, as determined by Hilton HHonors Worldwide L.L.C. and participating hotel) available. This option is not available for reservations booked via Advance Purchase Rate, reservations that are part of a blocked group of rooms, or reservations that are made with a promotional Free Night Certificate. This option can be used only once per reservation.
    The interesting part is not only because it seems/could be more affordable, but also in its implications for earning points on the money part of a Points & Money Reward™ redemption since (from the T&C) "if Member is using Room Upgrade Rewards, any money spent on the original reservation will earn points and/or miles consistent with these Terms." All along, I have been thinking that earning points on such a reward stay was possible only if one uses cash to also secure a room upgrade for the stay (now I am not sure anymore whether that is even an option). However, it is clear that if one books a standard room using the Points & Money Reward™ option , but then upgrades that original reservation using this instrument known as Room Upgrade Reward that involves using more HH points, one will get back points on the cash part of the original Points & Money Reward™ reservation (no points back on the money part otherwise) because, according to the T&C, "any money spent on the original reservation will earn points and/or miles consistent with these Terms."

    What does this mean? Suppose I wanted to book a 6-day standard reward stay at W=A Shanghai, as I intend to later this year, using either the money-only (66,400HH/night) or money+points (32,000HH+$149/night) option, what would be the better value?

    1. Standard Points-only Reward: 66,400HH/night * 6 nights = 398,400 HH points.

    I dummy-booked using this option and the reservations system told me that based on the number of HH points that I currently have in the bank (294,440), I would be way short on points for this redemption and would need to purchase 103,960 HH points for $2,319 (!) to be able to book this reward stay using points-only -- clearly not a very attractive option now but I would have been able to afford this redemption easily before D-Day with the points that I now have in bank.

    2. Points & Money Reward™: (32,000HH+$149/night)/night * 6 nights = 192,000HH+$894**

    **Earlier, this number was miscalculated as ~$1,341 (cost for 9 nights), but (6*$149=$894). Error corrected, however the logic remains the same, and the lower hard cash cost makes this an even better value

    Note that using this second option, I would save: 398,400-192,000 = 206,400 compared to option #1, thereby greatly "stretching" my points. Rather than depleting my points bank and requiring that I top it off with 103,960 points at the cost of $2,319 to afford the redemption, option #2 would instead leave me with 294,440-192,000 = 102,440 in the bank and $894 poorer, which is not bad at all. Read on...

    Because I would be able to save well over $894 (the money paid for redemption option #2) by redeeming UA miles to get to PVG, and I clearly would still have enough HH points in the bank (102,440) if I redeemed with option #2, I would be able to afford to stay for 6 days in a standard room at W=A Shanghai, where I would, in all likelihood, be upgraded to a river-facing premium room like before, while getting back after the stay 8,940 HH points, if I paid the cash part of this Money+Points stay with the Citi Reserve visa (10HH/$), or 10,728 HH points, if I did not care about the foreign exchange fee and paid with the AMEX Surpass (12HH/$).

    Now, let's make things even more interesting. What would happen if I did not get upgraded and I wanted to use the points saved (102,440) by using the money+points rather than the points-only option to secure an upgrade to a suite, which could be done on the spot because of (a) this interesting feature of Room Upgrade Rewards "Unlike the other Rewards options, Room Upgrade Rewards can be redeemed at the front-desk of some participating hotels (e.g., W=A PVG?)"; and (b) I would have more than enough points for this upgrade due to the points (102,440) that I would already have saved by using reward option #2. If I am successful with this upgrade strategy and because "any money spent on the original reservation will earn points and/or miles consistent with the terms of the Room Upgrade Rewards, the money part of my original Money+Points reservation ($894) will earn:

    Base Points: 8,940
    50% Diamond Bonus: 4,470
    50% points+points double-dipping rather than miles: 4,470
    10HH/$ if I use the Citi Reserve visa to pay for the stay: 8,940 (or 10,728 if I use the AMEX Surpass)

    The grand total, without including incidentals like drinks at the W=A PVG's "Long Bar", Diamond MYWAY bonus (1,000HH), AMEX booking (500HH) if paying with the Surpass, and any point-earning promo that may be in effect at the time, will be:

    Citi Reserve: Base points * 3 = 26,820 HH
    AMEX Surpass: Base points * 2 + 10,728 = 28,608 HH

    The upgrade would partially pay for itself because I would likely earn enough points to cover in part the cost for the upgrade that allowed these extra points to be earned in the first place!

    There is no doubt that after D-Day, redemption at high-end hotels like W=A got very tough because of Hilton's clear objective to ensure that loyalty guests spend money, at least some money, at such properties. Although I currently have nearly 300K points in the bank, I would not be able to afford a 6-day stay at W=A PVG right now using the points-only option. However, that is clearly possible with the Points & Money Rewards™ redemption, which, thus, seems like a backdoor provided by Hilton to allow guests to still afford to redeem at high-end properties. For those of us who save points and miles all year for an extended vacation that usually costs very little out of pocket money on flights and hotels, the costs associated with Points & Money Rewards™ redemption are very affordable, making this redemption option the smart strategy for staying at high-end Hilton properties after D-Day.

    The preceding, which started out as a limited post in another thread and evolved so much on its own, as I was writing, beyond what I had initially intended to post that I decided that it deserved its own thread, should really be a blog post somewhere...Bring on the "devaluation"!:).
     
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  2. NYCUA1K

    NYCUA1K Gold Member

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    To demystify the the Room Upgrade Rewards a bit more, I have looked to find out whether there is a chart that tells one how much such upgrades cost in points or money (it turns out that both forms of "payments" are available). I found no charts but I think that I know why. I have 5 paid and 1 reward stays booked and I remembered seeing an offer to upgrade after I completed each reservation. Looking at my current reservations, I found a mixed bag, with the only clear pattern being that the cost of the upgrades depends inversely on the number of nights booked -- more nights, lower cost. In one case, a 5-night paid stay for Hilton Osaka (see picture), it gave me the upgrade rates both in points and in cash. For my 3-night June/July reward stay at Hilton Shanghai, which I split into a 1-night reward stay and a 2-night reward stay because I had two 1-night weekend certificates from the Citi Reserve card that needed to be booked separately, requiring that I book a 1-night reward separately. In this case, I was offered only the option to upgrade with points. However, I also found a paid domestic reservation for which the upgrade rates were offered only in points...like I said, a mixed bag. Note that the upgrade for 1 night costs a lot more than that for 2 nights. So, the answer to the question of how one knows how much Room Upgrade Rewards cost is that one does not know until after booking...(I sort of knew that ;).) Also, not all premium rooms are offered for upgrades, so I suspect that one would have to ask for the rates for, say, suite upgrades. It could be that the cost would also depend on the rate of the room that one is upgrading from (a deluxe to a suite upgrade might cost less than a standard room to a suite upgrade). I would not pay for any of the upgrades offered below because there is more than a 90% chance that I would be upgraded into one of them or higher without paying anything.

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