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Whether you qualified for elite status in 2015 or fell short, the new year presents an opportunity to assess just how much that status means to you, and whether to pursue it again this year. Today, TPG Contributor Nick Ewen evaluates each level of Hilton HHonors elite status to help you decide.
In the last few weeks of 2014, you probably saw several posts that set out to quantify the value of holding elite airline status. TPG first wrote about the value of American Airlines status, and TPG Senior Points & Miles Correspondent Jason Steele followed up with valuations for Delta, United, and US Airways.
As we move into 2015, I wanted to take a similar approach to quantifying the value of elite status with the major hotel chains. To kick off this series I’ll look at the Hilton HHonors program, and offer my thoughts as to just how much Hilton HHonors elite status is worth. Also see later posts in this series on Marriott and Hyatt.
While this analysis is similar to the airline posts linked above, there are some notable differences. For starters, it’s much easier to switch your loyalty from one hotel chain to another, given the global reach of their various brands. The same cannot be said for airlines, as you might be a hub captive or fly regularly to a city that’s only served by one or two airlines.
Another key difference is the level of complexity that many hotel loyalty programs provide. Airline elite status benefits are more consistent; they generally don’t change based on the departure city or arrival city. Hotels are the opposite. You may earn the same number of points when you stay at a Hilton or a Waldorf or a Hampton Inn, but the on-property benefits (and thus the value you get from each night’s stay) can vary widely.
For the sake of consistency and simplicity, I’ll be making a number of assumptions as I analyze the value of hotel elite status. For Hilton, I assumed the following:
- You qualify on stays, but your eligible nights are half way between the stay/night requirements. For example, Silver status usually requires 4 stays or 10 nights, so for this analysis I’ll assume that you hit 4 stays and 7 nights. I’m sure many of you qualify based on both stays and nights, but I wanted to keep the estimates conservative to account for those who frequently stay in hotels for one night.
- Your average rate per night is $150. This is deliberately conservative, but remember that award nights count toward elite status qualification. Your average paid rate might be higher, but the overall average drops when you factor in the $0 nightly rate for award redemptions.
- Approximately half of your nights are in higher-end (full service) hotels like Hilton and Doubletree, while the other half are in budget properties like Hampton Inn and Homewood Suites. Again, this is a conservative estimate.
Your stay and spending patterns may be quite different, so feel free to adjust these numbers up or down. There’s no single right way to conduct this type of analysis; running the numbers for yourself is an important step in determining whether it’s worth going for the next level.
Finally, I rounded valuations to the nearest whole dollar for simplicity. Read on to see what I determined.
Hilton HHonors Silver ($66)
As the lowest level within the Hilton HHonors program, Silver status is granted after just 4 stays or 10 nights. It’s also included as an automatic benefit on the Hilton HHonors American Express and the Citi Hilton HHonors Visa Signature Card (see Which Hilton HHonors Credit Card is Best for You for more information). Since it’s relatively easy to obtain Silver status, the benefits aren’t very exciting. However, there’s definitely value to be had. For my valuation, I’m assuming 7 nights, with 4 in full-service properties and 3 in discount properties.
- 15% point bonus ($8): As a Silver Hilton HHonors member, you will earn an additional 15% point bonus (on the base rate) for every stay. TPG’s most recent valuations of points and miles pegged Hilton points at 0.5 cents apiece, so with 7 nights at $150 apiece, you’re looking at 1,575 points more than a standard member would earn, giving you a value of just under $8.
- 5th night free on awards ($30): While most chains offer a 5th night free when any member redeems points, Hilton actually restricts this to elite status holders. Of course, Silver members don’t earn points as quickly as Gold or Diamond members, so you may not use this as frequently as those with a higher level of status. In addition, the fifth night free could save you just 5,000 points (for a Category 1 redemption), 95,000 points (for a Category 10 redemption during high season), or somewhere in between. I’m assuming that a Silver member would use this benefit once every five years to save 30,000 points (or 6,000 points annually when amortized across the five years).
- Complimentary access to fitness centers/health clubs ($20): This generally only applies to higher-end, full-service properties, and it may not be something you would pay for anyway. With just 7 nights, I’m assuming that only 1 of those is in a property where you would otherwise be charged.
- Two bottles of water ($8): This benefit doesn’t apply to Hampton, Homewood, or Home2 Suites properties, so you’d only receive them for the four full-service stays (valued at $1 apiece).
Hilton HHonors Gold ($751)
Hilton Gold status is typically considered one of the more rewarding mid-level tiers out there, and it’s usually earned after 20 stays, 40 nights, or 75,000 base points ($7,500 in spending). It’s also an automatic benefit for cardholders of the Citi Hilton Reserve Visa and Hilton Surpass American Express (again, see this post for more details). For this analysis, I’m assuming 30 nights split evenly between full-service and discount properties. As you’re about to see, the jump from Silver is huge.
- 25% point bonus ($56): When you stay as a Gold member, the bonus points you earn on the base rate jumps to 25%. With 30 nights at a rate of $150/night, that gives you 11,250 additional points, or $56.25.
- 5th night free on awards ($75): As a Gold member, your point balance grows much faster than Silver members, so I’m assuming that you’ll take advantage of this benefit once every two years, again saving 30,000 points in the process (or 15,000 points per year). At 0.5 cents per point, that’s $75 each year.
- Complimentary access to fitness centers/health clubs ($60): With 30 nights, you will likely stay at a couple more high-end properties where fitness center/health club access is a great benefit compared to Silver members.
- Two bottles of water ($60): Gold members are able to choose bottled water and/or snacks as a welcome benefit at Hampton, Homewood, and Home2 Suites properties, so the value is a bit more consistent across the 30 nights.
- Complimentary Wi-Fi ($150): This is one of the big jumps between Silver and Gold, as you can access the internet free of charge at all Hilton HHonors properties. This is important, since Hilton remains one of the stingiest brands when it comes to WiFi access. While discount brands include this for all guests, WiFi for your 15 nights at Hiltons, Conrads, Doubletrees, or Waldorfs could set you back a pretty penny if you had to pay. Generally, paid access at these properties costs at least $10 per day, though you may not need access for every stay, so I kept the nightly value at $10.
- Room upgrades ($200): This is another big jump from Silver, but is also unpredictable. Gold members are entitled to a space-available upgrade at full-service properties. However, the frequency and value of these upgrades can vary greatly. An Executive Floor room at a Hilton may only be an additional $10 per night, while you could get lucky and score a huge suite that would normally cost $100 more per night. I’m assuming an average “value” of $50 per night with a conservative success rate of 25% (rounded up to 4 nights).
- Breakfast ($150): A final huge benefit to Gold members is complimentary continental breakfast at full-service properties (excluding many Waldorf-Astoria locations). Again, the value of this can vary hugely, and there may be occasions where you depart too early to take advantage of this benefit. I’ll make a conservative estimate of $10 per night.
Hilton HHonors Diamond ($1,324)
Hilton’s top-tier status is generally earned after 30 stays, 60 nights, or 120,000 base points ($12,000 in spending). You can also earn automatic Diamond status by spending $40,000 in a calendar year on either the Citi Hilton Reserve or Hilton HHonors Surpass Amex. According to the published benefits, there aren’t too many big leaps above Gold status, but you’ll be able to utilize them more frequently. For this analysis, I’m assuming 45 nights, with 23 in full-service properties and 22 in discount locations.
- 50% point bonus ($169): Diamond members enjoy 50% more points (on the base rate) than regular members. For 45 nights at $150 per night, that’s an extra 33,750 Hilton HHonors points, or $168.75 in value.
- 48-hour room guarantee ($25): Personally, I have never had to use this benefit, as I have often found that these guaranteed rooms are incredibly pricey. Still, if you must stay at a specific property, this can be a nice added perk.
- 5th night free on awards ($150): Diamond members will likely use this benefit more frequently than Gold and Silver members, so I’m assuming it will happen once a year and save you 30,000 points, or $150.
- Complimentary access to fitness centers/health clubs ($80): This benefit may pop up an additional time or two for Diamond members (compared to Gold members).
- Two bottles of water ($90)
- Complimentary Wi-Fi ($230): Here again I am pegging internet access at $10 per night for the full-service stays.
- Room upgrades ($300): Ideally, Diamond members enjoy more frequent and/or more luxurious upgrades, but the published policy is the same “space-available upgrade” (and I’ve read reports of Gold members being upgraded before Diamond members due to different arrival times). To be conservative, I’ll keep my same assumption of 25% upgrade success (rounded up to 6 nights) and assign the same $50/night value to these upgraded accommodations.
- Guaranteed Executive Lounge access ($50): I split this out from the room upgrades because it’s technically a separate benefit. In order to access an Executive Lounge as a Gold member, you must receive an upgrade to a room with included access. However, Diamond members have automatic access even without an upgrade.
- Breakfast ($230): The same value per night ($10) applies for Diamond members here; the only difference is that you have 23 nights to enjoy it (instead of the 15 nights in full-service locations for Gold members).
Hilton HHonors may have undergone a serious devaluation back in 2013, but it’s still a valuable program with a wide global reach, and I’ve enjoyed my Diamond status with them for the last 7 years. You may value some of these benefits more or less than I do; I encourage you to make your own assessments, and I look forward to hearing your thoughts in the comments below.
My biggest recommendation is one that I have repeated several times on this blog: Get a Hilton HHonors credit card. I’ll continue to give this advice until they open up the 5th night free option to all Hilton HHonors members. It’s the only program that gives you complimentary status just for holding a credit card with no annual fee, and the complimentary Gold status for Citi Hilton Reserve and Hilton Surpass Amex cardholders is well worth the respective annual fees.
How much do you value elite status with Hilton HHonors? This card’s sign-up bonus of two free nights can be worth as much as 190,000 points if you redeem them at top-tier properties like the Conrad Maldives, and it also confers automatic Gold status and the ability to earn Diamond status through spending.
This card’s sign-up bonus of two free nights can be worth as much as 190,000 points if you redeem them at top-tier properties like the Conrad Maldives, and it also confers automatic Gold status and the ability to earn Diamond status through spending.