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The new Hilton Honors is now live, give or take a few IT issues and some new “perks” that haven’t quite been implemented. But the most important change has been implemented – the new system for determining the cost of award nights.

First of all, let me remind you of the “old” award chart, since you’re unlikely to find it anywhere on the Hilton Honors website.

So, what has changed (at least initially) under the new system?

Points & Money

The old Points & Money is now GONE! This may not come as a surprise to many, but for some reason that specific change never really registered with me. As you can see from the above chart, you used to pay 40% of the points requirement plus a cash amount. This cash amount was low enough that it usually provided excellent value (spending that amount to save 60% of the points requirement). The impact was more neutral for 5-night stays where Silver status and above would get you the fifth night free.

The new Points & Money appears to be based on the retail price of the hotel night. It’s a bit early to say what the precise value of an Honors point will be – it appears to differ depending on the hotel, currency, country, etc. – but does seem to end up in the range of my indicative value of an Hilton Honors point.

However, the link to the retail price of a standard room is now clear. Therefore a Points & Money award can easily go from:

to:

I hope you managed to make your Points & Money bookings in February, like I did for that upcoming one-night stay in Madrid. The extra value from booking a Points & Money award instead of a full-points award is now gone.

It is also worth pointing out that you only reach the Points & Money option by following the booking process for a standard reward booking. It wasn’t completely obvious the first few times I tried…

Standard Rewards Pricing

I suspect that some people are now feeling rather deceived. When Hilton Honors promised that they wouldn’t be increasing their standard room award prices, I wanted to believe them. However, what they really meant was that no hotel would exceed the previous cap for their award category. Since we bloggers tend to rush to check out the Conrad Rangali Maldives, we could confirm that the cap indeed remains at 95,000 points per night, despite the Rangali charging eye-watering cash rates.

Pricing Increases

But what many of us missed was the impact on middle category properties. Here’s what would happen before:

A Category 7 hotel, for example, could price itself between 30,000 and 60,000 points per night. However, any price it chose needed to be valid for an entire calendar month. Therefore if Honors decided that March on average would be low season at a specific hotel, it might choose to charge 30,000 points per night. However if a handful of March dates were actually quite popular (say an early Easter), you could easily find a bargain by using 30,000 points instead of paying a high room rate.

Now hotels can charge what they like for each individual night (or more likely, an algorithm does it for them). The overall cap does indeed remain in place, but countless examples are surfacing online of where a mid-category hotel was charging 40,000 points a few days ago under the old system and today is charging 50,000 points for the same night.

Pricing Decreases

As promised, some hotels are charging fewer points per night than they were under the old system. However, this isn’t necessarily anything to celebrate, as any intermediate to advanced level travel hacker would have already known to save their points and spend cash whenever the cash rate was low enough. (which is why I frequently insist on referring to a valuation chart)

Neutral Pricing Impact

Luckily, there seems to be no impact on hotels in Categories 1-3, which had fixed pricing. Therefore the Hilton in Salalah, Oman is still charging 5,000 points per night. The same can also probably be said about Category 10 since most of the time we were already braced for paying 95,000 points per night.

Conclusion

Here at InsideFlyer UK we often like to style ourselves and many of our readers as “travel hackers”. My first impression of these changes is that Hilton Honors is indeed moving to a revenue-based reward programme that intends to remove most opportunities for “travel hacking”. I suspect that a £100 hotel room available for 5,000 or 10,000 Honors points will become a distant memory in due course. It is equally probable that we will end up paying much more than 95,000 points per night for the most aspirational properties. (when only 4 years ago we were paying 50,000 points per night)

That said, these changes are clearly beneficial for the vast majority of Hilton Honors members. Those with small points balances will be able to spend them easily. No longer will the uninformed spend 50,000 points per night when the cash rate is £100. Even though Honors rewards might not offer out-sized value, their actual value might feel more relevant to those genuinely unsure whether to pay with points or with cash.

Long term we’ll see whether Hilton Honors have made the correct strategic decision. After all, why bother collecting Honors points through credit cards, etc. when you know that those 2 points per £ will never be worth more than 0.7-0.8p? And will you now yawn at a 2,000 point per night bonus, knowing that it is only worth £7-8 at best?

What are your experiences with the new Hilton Honors? Leave your comments below.