What is the value of Hilton Honors Points?
For those of you who like to get to the answer fast, PlasticIQ estimates the value of Hilton points to be worth around $0.0043 per point. This is a complex question to tackle (and like many rewards calculations, at times subjective), but here’s PlasticIQ’s take. The first thing to note is that the value of Hilton rewards actually varies depending on several factors, primarily:
- Your membership level (blue, silver, gold, diamond).
- What type/quality hotel you prefer to stay in.
- Whether you are able to take advantage of point-stretcher awards.
Yikes!! While it may seem like a lot to digest, PIQ tackles it one piece at a time and then ties it all together.
What level member are you and how many days will you stay at a given property?
The Hilton Honors program (officially, Hilton HHonors) offers some very good discounts for silver members and above for those willing to stay at a specific property for 6 nights or more (for the detail-oriented, these packages are known as GLON and GLONP awards). As you can see from the table below, just becoming a silver member juices the value of your Hilton Honors points by more than 35%
| # free nights | Category 6 (blue member) Points Req’d | Category 6 (silver+) Points Req’d | % Discount for silver and above | % increase in value of Hilton Honors points |
|---|---|---|---|---|
| 6 | 240,000 | 175,000 | -27.1% | 37.1% |
| 7 | 280,000 | 205,000 | -26.8% | 36.5% |
| 8 | 320,000 | 235,000 | -26.6% | 36.1% |
| 9 | 360,000 | 265,000 | -26.4% | 35.8% |
| 10 | 400,000 | 295,000 | -26.3% | 35.5% |
| 11 | 440,000 | 325,000 | -26.1% | 35.3% |
| 12 | 480,000 | 350,000 | -27.1% | 37.1% |
| 13 | 520,000 | 380,000 | -26.9% | 36.8% |
| 14 | 560,000 | 410,000 | -26.8% | 36.5% |
The category of the hotel you stay at and whether you travel on point-stretcher awards
Hilton Honors offers a point-stretcher program which allows you to stay at select hotels for 40% fewer points. Of course there’s a hitch–only certain hotels participate in this program at certain times of the year and supply of discount rooms is limited. Nevertheless, if you can secure one of these awards (or simply build your trips around them!), this will increase the value of your Hilton HHonors points by a whopping 67% (in other words, the 40% discount increases the value of your points by 67%–go figure).
| Hotel Category | Opportunity | Category 1 | Category 2 | Category 3 | Category 4 | Category 5 | Category 6 |
|---|---|---|---|---|---|---|---|
| Point cost for 1 free night (standard) | 7,500 | 10,000 | 20,000 | 25,000 | 30,000 | 35,000 | 40,000 |
| Point cost (point-stretcher) | N/A | N/A | 12,000 | 15,000 | 18,000 | 21,000 | 24,000 |
| % increase in value of Hilton Honors Points | N/A | N/A | 67% | 67% | 67% | 67% | 67% |
Tying it all together: the true value of Hilton Honors points.
So now that we understand some of the nuances and complexities of valuing Hilton HHonors rewards, the final step is to estimate the dollar cost of a Hilton property hotel room and then divide by the number of points required to get the room. Of course, like many other facets of this exercise, estimating the cost of a room is never straightforward, since room prices vary by standard versus point-stretcher, geography, and hotel category.
PlasticIQ has attempted to take at least some of these factors into account in our analysis. To be sure, it’s far from a scientific analysis, but we think it’s directionally correct.
- PIQ examined hotel prices in multiple (highly traveled) cities for each category, to try to take into account geographic cost effects.
- We always chose the lowest available rate (usually advanced purchase)
- As much as possible, we tried to stay “apples to apples” between categories. So we always priced 2 months out, and always a king bed. We tried to use the same set of cities in each category, but that wasn’t always possible (some cities don’t have class 5/6 hotels for example).
- We assume that for standard awards, stays are spread somewhat evenly across the various categories, with a bias towards higher end categories. For Point Stretchers, we assume equal usage across categories (excluding category 1, as they are not offered). For GLONPs, we assume they are used only for category 5 and 6 primarily because these two categories offer better value.
- Across redemption types, PIQ assumes 40% of points will be applied to standard awards, 20% to point stretchers, and the remaining 40% to GLONP awards.
- Finally, since hotel accomodations are almost always available through Priceline or some other discounting mechanism, we further adjusted the cost of hotel rooms down by 25% to account for this. While we recognize this isn’t a perfect measure (many folks get up to 50% off, and others won’t use Priceline or similar services at all), we feel on average it’s appropriate.
| Hotel Category | Avg Price/Night w/25% Priceline Disc | Standard Rate pts req’d | Std Rate $ val/pt | Cat Alloc % | Wtd.Pts | Point-stretcher pts req’d | PS $ val/pt | PS Alloc % | Wtd.Pts | GLONP 6 nights pts req’d/night | GLONP $ val/pt. | GLONP Alloc % | Wtd.Pts | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | $73 | 10,000 | $0.0074 | 10% | $0.0007 | N/A | N/A | 0% | $0.000 | 25,000 | $0.0029 | 0% | $0.000 | |
| 2 | $76 | 20,000 | $0.0038 | 15% | $0.0006 | 12,000 | $0.0064 | 20% | $0.0013 | 25,000 | $0.0031 | 0% | $0.000 | |
| 3 | $72 | 25,000 | $0.0029 | 15% | $0.0004 | 15,000 | $0.0048 | 20% | $0.0010 | 25,000 | $0.0029 | 0% | $0.000 | |
| 4 | $79 | 30,000 | $0.0026 | 15% | $0.0004 | 18,000 | $0.0044 | 20% | $0.0009 | 25,000 | $0.0032 | 0% | $0.000 | |
| 5 | $122 | 35,000 | $0.0035 | 25% | $0.0009 | 21,000 | $0.0058 | 20% | $0.0012 | 25,000 | $0.0049 | 50% | $0.0024 | |
| 6 | $144 | 40,000 | $0.0036 | 20% | $0.0007 | 24,000 | $0.0060 | 20% | $0.0012 | 29,167 | $0.0049 | 50% | $0.0025 | |
| Subtotal | $0.0037 | $0.0055 | $0.0049 | |||||||||||
| % Stays by Reward Type | 40% | 20% | 40% | |||||||||||
| Weighted Contr. | $0.0015 | $0.0011 | $0.0020 | $0.0045 | ||||||||||
| Post Penalty. | $0.0043 |
So, based on all of the above assumptions, PlasticIQ estimates the Hilton Rewards Points are worth about $0.0043 per point.
As a sanity check, I did a quick search on google and found this related post (what are Hilton Hhonors points Worth?). It’s interesting to see that the blog’s author estimates the value of Hilton rewards at around $0.0037 per point, less than 1/10th of a cent lower than my estimate. One of the reasons he is a bit lower is simply because he didn’t include point stretcher awards in his analysis–not a big deal given how difficult it is to secure such awards (unless you just build your trips around them).
PS: many thanks to the charming Kenyan gal working the phones at Hilton. Her knowledge of their products was only exceeded by her friendly can-do attitude:)
January 25th, 2010 at 11:35 am
[...] because a donation of 10,000 Hilton HHonors points results in a $25 cash donation, I agree. So read this and this. The study for Starwood is here and the one for Marriott is [...]