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Maximizing Hilton HHonors Premium Room Rewards and Room Upgrade Rewards

by on July 30, 2012 · 22 comments

in Hilton, TPG Contributors

After demystifying Hilton HHonors AXON and GLON award redemptions and helping readers choose amongst the three (now four) Hilton credit cards, TPG contributor Nick fills us in on how to stretch your Hilton HHonors points even further with Premium Room Rewards and Room Upgrade Rewards.

In mid-2011, Hilton HHonors decided that their program wasn’t confusing enough, so they added some new redemption options to the mix. Two of these allow members to redeem additional points for better rooms: Premium Room Rewards and Room Upgrade Rewards. This began as a pilot program with a few select properties, but has since been expanded. One of the biggest problems with these options is their lack of consistency from one property to the next. Some redemption rates even vary across different dates at the same hotel. In addition, many of them offer very poor value, so be sure to evaluate each option carefully when booking.

It’s important to note that these two programs are in addition to, not in place of, the complimentary upgrade policy for Hilton HHonors Gold and Diamond elites. I (for one) have not noticed a significant decrease in complimentary upgrades as a Diamond member since the complete roll-out of these programs, but only time will tell if that continues to hold true.

Let’s take a look at some examples to help you understand the new options and decide whether or not to take advantage of (or be subject to?) these redemptions.

Premium Room Rewards
Under this new option, Hilton HHonors members can redeem additional points beyond the standard rates to secure an upgraded room at booking. When you log in to your account and search for rooms online, the rates will automatically be displayed when you select the “Use HHonors Points” box:

When you select a property, the Premium Room rate (in points) will be listed underneath the revenue rate for each room type, in the same way that that standard point rates are displayed for the standard room:

For this particular property (The Trafalgar London, a Category 7 hotel), the Double Guestroom Plus is classified as a standard room, whereas the Double Hilton Deluxe room is available for an additional 12,086 points.

Each property appears to utilize a mathematical formula that fixes each point at a certain value, in essence offering a revenue-based redemption model. This is noticeably different than the standard redemption rates that are fixed based on each property’s category designation (1-7, Waldorf Astoria). However, even these “fixed” redemption rates change across different dates at the same property!

Generally, these rates offer very poor redemption value, especially for elite members looking to book stays of four nights or longer. Take a look at the following results for three different room types on three different (random) dates at the Conrad in Bali (incidentally one of my favorite properties in the world):

Sunday October 14, 2012

Deluxe Garden King/Twin (Standard)

Deluxe Resort King/Twin (Premium)

Conrad Suite King/Twin (Premium)

Best Available Rate

$268

$288

$463

Points Required

35,000 points

50,400 points

81,025 points

Value

0.77 cents/point

0.57 cents/point

0.57 cents/point

Wednesday January 2, 2013

Deluxe Garden King/Twin (Standard)

Deluxe Resort King/Twin (Premium)

Conrad Suite King/Twin (Premium)

Best Available Rate

$308

$328

$503

Points Required

35,000 points

91,839 points

140,839 points

Value

0.88 cents/point

0.36 cents/point

0.36 cents/point

Friday March 15, 2013

Deluxe Garden King/Twin (Standard)

Deluxe Resort King/Twin (Premium)

Conrad Suite King/Twin (Premium)

Best Available Rate

$248

$268

$443

Points Required

35,000 points

42,880 points

70,880 points

Value

0.72 cents/point

0.625 cents/point

0.625 cents/point

Notice that the higher the revenue rate (often an indication of higher demand), the lower the value you’ll get on the premium redemptions. Since the fixed redemption rates are set by each hotel, this property is fixing the value of each point at a much lower level when the revenue rates are higher. As a result, the Conrad Suite is only $60 more expensive on January 2 than it is on March 15 but would cost almost double the number of points to book as a reward night.

In the last example, the value of each redemption is much closer across the three room types. Does this mean that you should utilize premium rewards in this case? Not necessarily. Once again it all comes down to individual preference. Is the Conrad Suite worth the extra $195/night? Is it worth the extra 35,880 points/night? You’ll need to decide.

This decision is made harder for elite members on stays of 4 nights or longer since the premium rooms do not offer the GLON rates discussed in an earlier post. Let’s see how that stacks up for a six-night stay for an elite member at the Conrad Bali beginning on March 15 (rather than the one-night example above):

Garden King/Twin

Resort King/Twin

Suite King/Twin

Best Available Rate

$248

$268

$443

Points Required

(per night)

26,250 points

42,880 points

70,880 points

Value

0.94 cents/point

0.625 cents/point

0.625 cents/point

The value of each premium room redemption remains fixed, whereas the standard redemption becomes much more valuable given the discounted rates available to Silver, Gold, and Diamond members.

In the examples above, the value of each premium reward redemption is at least somewhat in line with the standard redemption rates and is relatively consistent across different room types. Don’t be surprised if that isn’t the case when looking at other properties. Take the Doubletree in Times Square for example. On a Sunday night (October 14, same as the first table above), try finding the sense in the following:

King Bed Standard Suite

King Bed “Premium” Suite

Best Available Rate

$299

$329

Points Required

50,000 points

118,440 points

Value

0.598 cents/point

0.278 cents/point

Or think of this another way…you can spend an additional 68,440 points to get a room that would cost you $30 more per night. Not an enticing value proposition.

Even more confusing? Some properties actually offer lower rates on premium rooms than standard rooms. If any of you plan on staying at the Hilton Amsterdam Airport, this is a great example. Again, using the same date (October 14), take a look at the room options:

The executive room is actually cheaper in terms of points than a standard room, even though the revenue rate is more expensive!

Unfortunately, there are no hard and fast rules for redeeming Hilton HHonors points for premium rooms. In every case, you will have to check the various rates for the dates you plan to stay at a property, crunch the numbers, and figure out whether a redemption is worth it to you.

Room Upgrade Rewards
Hilton’s second recently introduced redemption options works sort of like some airline rewards, where you pay for a room but want to use points to upgrade. This previously wasn’t possible, but the new Room Upgrade Rewards program allows Hilton HHonors members to use points to guarantee an upgrade to a premium room at booking.

This is in addition to their existing standby upgrade program that has been around for a number of years. You may have noticed a box like this after making reservations (or looking at an existing reservation online) at certain properties:

The next page would list the various upgraded room types with the stand-by cost for an upgrade (usually at a significant discount to booking the premium room directly). If you select any of them, you commit to paying the fee if a room is available at check-in. This is still available. The new Room Upgrade Rewards program simply adds another option for upgrading.

As soon as you make a reservation, the confirmation page should list any and all upgrades available to you at that particular property (including both the standby upgrade above and any point upgrade opportunities as well). The options should also be viewable anytime by accessing the reservation online. Once you decide to pull the trigger , you are confirmed into the upgraded room rather than hoping an upgrade will be available at check-in.

Here’s how this might look when you make a reservation (this example is from the Hilton in Sydney, Australia):

Best Available Rate

Points/Night

Value

King Hilton Guestroom

$254

50,000 points

0.508 cents/point

King Hilton Guestroom Plus

$285

79,915 points

0.36 cents/point

King Hilton Deluxe Room

$326

91,373 points

0.36 cents/point

When I booked a paid two-night stay in a King Hilton Guestroom, these were the options I was given:

In other words, you’d need to spend 8,593 points to confirm a room that’s $31 more expensive or 20,050 points to confirm a room that’s $72 more expensive. If you crunch the numbers, the additional points to upgrade a paid stay seem to match the “value formula” for the premium room rewards:

Additional Cost (over standard king guestroom)

Value of Upgrade

King Hilton Guestroom Plus

$31

0.36 cents/point

King Hilton Deluxe Room

$72

0.36 cents/point

One final thing to note: You can use points to upgrade your room on both paid stays and reward stays (basically like booking a premium room reward) but not on stays utilizing free night certificates (like those offered during the Q4 promo last fall).

Key Takeaways
So what should you make of these new options? Keep in mind the following facts:

1. There’s a lot of math going on, and very little of it is consistent. Both the premium room rewards and room upgrade rewards seem to be based on a mathematical formula that values each point at a set amount (generally at a fraction of a cent per point). However, these rates are not really consistent across properties, nor are they even consistent across different dates at the same property (as you can see from the Conrad Bali example).

2. Most premium room rewards offer exceptionally little value. I routinely get at least 1 cent per point when redeeming Hilton HHonors points, and this value tends to increase when taking advantage of the AXON/GLON options discussed in my previous post since I have both Hilton HHonors elite status and a Hilton Amex—thus opening up reduced redemption rates. Since premium room rewards are fixed at relatively low values and do not offer discounts for longer stays, you should stay away from these reward options in the vast majority of situations. That being said…

3. Be sure to look at all room options at booking to see if a premium room is available for fewer points than a standard room. There’s nothing worse than sitting down next to someone on an airplane and hearing that they paid $100 less than you for the exact same seat and service. What would be even worse is to find out that someone sitting in first class paid less for his/her seat than you paid for your coach seat! While certainly not applicable to a majority of Hilton properties, some hotels (especially those with lower revenue rates) do offer premium rooms for fewer points than a standard room, so always keep an eye out.

4. Since these options are relatively new, expect more changes as Hilton finds the “sweet spot.” As much as we love getting the most for our points, hotels and airlines are not in the business of giving away more for less, so I would bet that Hilton (along with individual properties) will continue to tweak these redemption options to ensure that they are being utilized but are also contributing to their bottom line.

Have any of you taken advantage of these new options? I’d love to hear about your personal experiences in the comments section!

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

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  • Dave Op

    HH is definitely the most confusing of all the programs. I like the Priority Club and Starwood the best.

  • PedroNY

    Thank you for your breakdown, it is very helpful. I think there are some wonderful things about HH program as long as you really pay attention to ins and out of the program with AXON and GLON awards and a little bit of credit card churning to generate those points.

    Cheers,

    PedroNY

  • http://profiles.google.com/awindenberger Aurelien Windenberger

    Great post! I’ve been picking up lots of Hilton points lately and this was very useful.

  • http://milevalue.com/ Scott

    I think it would be more useful to list the marginal value of the extra points needed for a better room instead of the average value of the points for premium-room redemptions. But minor quibbles aside, this is helpful. This is definitely a program that requires careful planning to max out.

  • thepointsguy

    Marginal value for the better room is 100% personal. Some people absolutely love suites/premium rooms and some people couldn’t care less. I’d find it impossibly to quantify a way that makes sense for everyone.

  • thepointsguy

    Agree- I think Starwood is more straight forward. That being said, there’s still a ton of value to be had form the Hilton program, so you might as well maximize your HH points!

  • http://milevalue.com/ Scott

    As an example, in the first chart labeled Sunday October 14, 2012, instead of the 3rd cell of the row labeled value reading 0.57 cents/point, I would say those points have a 0.13 cents/point value. For a marginal 15,400 points, you are getting a room that costs $20 more.

    But I’m approaching this from the perspective of “I’ve decided to stay in this hotel, so is it worth the extra points for the better room?” If instead a person’s perspective were different, they might prefer average value of points to marginal.

  • http://pulse.yahoo.com/_JNFSXN4ANC7RH5VQCOEJGFUJZQ Nick

    That is definitely an alternative way of valuing these redemptions, but the main reason I went with the straight average value formula is because that’s how Hilton calculates the points needed per night. In the example you cite, you’re right that the marginal value of the deluxe resort room is 0.13 cents/point, but the marginal value of the suite is o.42 cents/point ($196/46,025 points).

    As for your comment about “careful planning,” I couldn’t agree more! Hopefully these posts will help readers do just that.

  • Kurt

    One also needs to factor in taxes. I just booked $279 room for 40,000 (0.69 c/p) but when you add in the taxes of $40.46, it bumps to 0.79 c/p

  • Matthew Wilson

    Lower points on Premium Rooms? That just happened to me last month. To be honest, I was a bit confused. I was that the Hilton in downtown ATL and got a top floor executive suite for 7500 less points than the regular room. Worked out well for us! Maybe that is only a option for Executive HHonors members cashing in points?

  • http://milevalue.com/ Scott

    I think they will. The AXON/GLON post made it easy for me to decide on a redemption strategy for a four-night stay in Sydney in January.

  • http://pulse.yahoo.com/_JNFSXN4ANC7RH5VQCOEJGFUJZQ Nick

    Actually it’s just a function of the “value” formula the hotel used on that date. When revenue rates are relatively low at the higher category properties, a value of 0.5 or 0.6 cents/point (like the Amsterdam example above) can lead to “premium rooms” booking at a discount. Talk about an oxy-moron!

    Glad you were able to take advantage of it!!

  • Jean Carter Wilson

    This is really a frustrating new development at Hilton, because at many properties ALL the rooms are “premium” except the absolute most basic: think “smallest room at the bottom of the elevator shaft.” On top of last year’s devaluation in which many hotels were bumped up as many as three categories (some cities have no airport hotels lower than a Cat 6), I strongly suspect this is my last year as a Hilton Diamond member.

    One way I’ve been circumventing this scam is making multiple reservations for a given span of nights: book 2 nights on points, the next 2 on cash, the final 2 on points, depending on which nights are exorbitantly expensive under Hilton’s formula. Many times Wed-Thursday are reasonable amounts of points, but Fri-Sat are as high as several hundred thousand per.

    I’d look for this scheme to spread across Hilton’s brands in the coming year or two, sad to say. Of course, this means GLON and AXON are likely going the way of the dodo.

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  • A.J.

    I just spent one night at the Hilton in downtown Baltimore. I decided on Friday afternoon to look for redemption options for Saturday evening. A standard room was 40,000 points. But an executive King room was 37,500 points. I was on the executive floor with access to Concierge lounge. Very happy :)

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