Hilton IPO. How will impact loyalty program?

Discussion in 'General Discussion | Miles/Points' started by Aditya Vyas, Aug 7, 2013.  |  Print Topic

  1. Aditya Vyas
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    Aditya Vyas Silver Member

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  2. MX

    MX Gold Member

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    IPOs require a great amount of disclosure. Perhaps those of us who work in the finances can dig up some interesting new info about this "loyalty" program, and bring it to our attention. I'm sure it would be fascinating to read, as investors and customers have opposite interests in this matter. ;)
     
  3. mikeef
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    mikeef Silver Member

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    It will have minimal, if any, impact on the loyalty program. The loyalty program is always one of the items that the company highlights on the roadshows, so they won't make many changes out of the gate. I would assume continued inflation simply because that's what they do.

    Once the red (prospectus) comes out, I'll dig through it and post relevant info.

    Note that these guys went private at the peak of the market in 2007. Curious as to what the total return to the PE (private equity) guys will be, given that they paid a healthy premium.

    Mike
     
  4. Seacarl
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    Seacarl Gold Member

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    There's really no reason that the IPO will have any impact. Aren't Hyatt, Starwood and Marriott all public?
     
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  5. edekba

    edekba Gold Member

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    yes

    but i think the OP believes that w/Blackstone "selling" Hilton, there might be some changes coming to the program.
     
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  6. Seacarl
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    Seacarl Gold Member

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    The devaluation earlier this year might have been influenced by Blackstone suggesting that Hilton should stop giving away the store (or it may have been driven by Hilton internally for the same reasons.)

    On the whole Blackstone's interest isn't any different than that of the public markets, which is to maximize shareholder value, and the loyalty program is valuable to the extent it maximizes profitability for Hilton. So I don't think the IPO will have any impact at all.
     
  7. guberif

    guberif Silver Member

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    don't think points value/redemption can get much worse...
     
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  8. edekba

    edekba Gold Member

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    ... everything can get worse
     
  9. Aditya Vyas
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    Aditya Vyas Silver Member

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    Yes that's what I suspect. Also with all recent devaluation might be to prepare for iPo. If its successful how will it influence others?
     
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  10. pdavisnet

    pdavisnet Active Member

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    The devaluation earlier this year was precisely because they anticipated this. By lowering the value of their points, they made the balance sheet look better at the risk of alienating loyal customers the impact of which won't be felt until after the IPO. The post-IPO managers will have to work to rebuild loyalty. For that reason, Hilton Honors is probably least likely of the majors to see devaluation (again) in the near future.
     
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  11. skyvan

    skyvan Gold Member

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    I see it this way as well but I'm definitely not a financial analyst. Devaluations are great for the balance sheet.
     
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  12. davef139

    davef139 Gold Member

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    The IPO should have little to do with overall with the rewards program. It may effect in future years after beign public as promotion can drive revenue and occupancy levels, it can also show the reverse trending if a promo isn't making much of a difference.

    The prospectus released will not give much of any good information about the loyalty program. It might give you total number of HHonors members and the outstanding value of points (by their numbers). I believe most airlines just give an outstanding dollar figure of future liability on awards.

    I saw this wire and disappointed me some as most brokers you need 250k+ in accounts to be even considered for most ipo's
     
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  13. eponymous_coward
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    eponymous_coward Gold Member

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    HHonors will still require a bazillion points for aspirational properties and people will still whine about the promos, so I'm guessing no change. ;)
     
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  14. iflyjetzzz

    iflyjetzzz Active Member

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    Exactly. By devaluing the points, Hilton's liabilities are decreased.

    From what I'm reading, there have been more than a few elites leaving the Hilton system due to the devaluation. I pretty much left Marriott due to continual degradation of the loyalty program. I'm now with Starwood and Hyatt. The funny thing is that it's easier for me to have top status with both of those programs than it was to keep Marriott platinum. Or Hilton Diamond.
     
  15. Slow_Mustang
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    Slow_Mustang Silver Member

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    People with PE investment with Blackstone will be richly rewarded. That should take some of the pain away from the HHonors devaluation. Hope there is no further hit as a result of the sale.
     
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  16. Seacarl
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    Seacarl Gold Member

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    How will it be compensated by Blackstone?
     
  17. marcwint55

    marcwint55 Gold Member

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    contact me if you wish to get in the IPO.
     
  18. servo

    servo Silver Member

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    Now knowing about the IPO, the most recent deval makes more sense. That's pretty much what my company did (layoffs and cost restructuring) 2 years ago, and we were sold last week to a canadian company. It's all about making the company seem more attractive than it really is.
     
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