Hilton’s CEO Thinks They’ve Benefited From Marriott Bonvoy

Filed Under: Hilton

We’ve seen a lot of uncertainty at Marriott lately. Last August Marriott created a single loyalty program, and then yesterday they launched the branding for the new program, known as Marriott Bonvoy.

Unfortunately this integration has been met with frustration. Marriott has had serious IT issues, and overall Starwood Preferred Guest members haven’t been very happy. When Marriott bought Starwood, they said one of the things they found attractive about the acquisition was how engaged SPG members were, though it seems much of that value has been lost.

Marriott’s CEO has called this frustration from members “noise around the edges.”

Now it’s interesting to see how other hotel groups are perceiving these changes. During yesterday’s earnings call, Hilton’s CEO said that Hilton Honors added 14 million new members in 2018, bringing their total membership to 85 million. As he explained:

“I suspect that we are benefiting by getting members of other programs that are shifting their loyalty. I can’t give you hard data on who’s come exactly from where, and, to a degree, as long as they are great customers that we can get engaged with us, we don’t care.”

Now, a roughly 20% increase in membership year over year is a lot, especially for a program that has been around for decades.

However, the reality is that we’ve seen huge increases in loyalty program memberships across the board. This is because hotel chains are increasingly doing everything they can to get you to book direct, so they can avoid paying commissions to online travel agencies.

For example, Hilton offers free Wi-Fi to guests, but only those who belong to the Hilton Honors program and who book direct, and not to non-members and those who book through third parties. So obviously this has been a huge motivator for getting people to book direct.

But across the board we’ve seen hotel executives try to suggest other reasons for why loyalty program membership numbers have been increasing. Last year Hyatt executives claimed World of Hyatt was a success because of how much more engaged it made people, and they cited all the new member sign-ups to support that. Of course the primary motivator there was actually the member only rates that they offer.

In general I’d guess that those people who are most frustrated by Marriott Bonvoy are loyal members who stay with Marriott/Starwood all the time, and not just occasional guests.

In other words, a better metric of this would be if Hilton has seen a huge spike in their elite population, rather than just new members. For that matter I do suspect they’ve seen a huge increase in Diamond members, but that has more to do with the Hilton Aspire Card than anything else.

Bottom line

I’ve made the case that it’s less worthwhile to be loyal to Marriott than in the past, and I’ve even found myself switching quite a few stays to Hilton Honors thanks to the excellent Hilton Aspire Card.

However, personally Hilton isn’t a group that I feel like I need to be loyal to, since they give away Diamond status so freely. But Marriott changes do make me more likely to become a hotel “free agent,” and just stay at the best hotel for a particular situation.

So while I’m happy to see the Hilton Honors membership base is increasing, personally I think Marriott Bonvoy as such has a limited impact there.

What do you think — is Marriott Bonvoy responsible for an increase in Hilton Honors members?

(Tip of the hat to @HH_Cash)

Comments
  1. I have both. Obviously not via CC as that doesnt work here. My loyalty is 0 but I use them where it suits me best.
    Same applies to Shangri La. Stay there when i works for me

  2. I don’t know for sure about Hilton member base increase because of Bonvoy, but my guess would be yes. I am Marriott Gold and since they cut my breakfast benefit, I now only stay at properties like the Springhill Suites that offer breakfast as part of the rate. I already had a Hilton account, but I think that they would have benefited from both the changes to the program as well as the fiasco of the SPG/Marriott Rewards combination which likely resulted in loyalists exploring other programs. I wonder if IHG and Radisson have seem the same percentage of growth?

  3. No free breakfast at Marriott is a deal killer for me. Hilton takes care of that for gold members. That’s a huge advantage for Hilton.

  4. I moved almost all of my leisure business to Hilton (and a little to Hyatt) after the Marriott Gold devaluation. I was almost all SPG before the SPG/Marriott merger.

  5. “Hilton’s CEO said that Hilton Honors added 14 million new members in 2018, bringing their total membership to 85 million.”

    That says it all right there. I don’t plan to use or even activate my new “Bonvoy” card; when my final Starwood card comes up for renewal in April I’ll likely just use up my last 100,000 points and then cancel. Meanwhile I am still Gold at Hilton and still will get the free breakfast etc.

    Bye Marriott, you really screwed up big time.

  6. Reducing United 1Ks to the equivalent of former SPG Gold (ie. entirely useless status) probably lost Marriott thousands of customers, even if its just a few, Hilton surely benefitted.

  7. I would agree with this. I am rediscovering HHonors recently after leaving them behind following the God-awful Blackstone buyout 10 years ago

  8. As Gary stated, there’s no data to support the claim. Even the CEO says he doesn’t have any. In the end, They probably benefited some I’m sure.

    What I don’t get are the Golds complaining. They either got it from credit card and status matches or they stayed their way thru SPGs stays system to get SPG gold. If they were a true Marriott Gold, their 50 nights a year would net them Platinum under the new system which is a net gain for the person.

    If they are losing a bunch of status matchers, credit card folks and SPG Golds, then I can see Marriott being ok with that. I can’t imagine those types were all that profitable to Marriott. Sometimes it’s ok to shed some dead weight.

  9. Previously SPG gold, I switched last year to Hilton. Two main reasons: 1. Marriott eliminated breakfast for Gold, and 2. Devaluation of points earning through credit cards and stays. I’m only keeping the AmEx Starwood card for the free-night cert, and want nothing else to do with Marriott.

  10. It seems super unlikely that any SPG loyalists didn’t even have a Hilton account previously, especially because with SPG being smaller, SPG people always needed to have a backup hotel chain too. So the idea that a bunch of totally new accounts would be people coming from Marriott doesn’t feel right — but if they had said they’d seen a bunch of dormant / low-activity accounts suddenly get more active, that would make more sense.

  11. One suggestion: Hilton needs to add more high-end hotels to compete with St Regis, there are many Conrads around, especially in the Caribbeans.

  12. Disgruntled Marriott Rewards members and/or former SPG loyalists are not the only sources of new members that Hilton Honors picked up.

    We are forgetting that after Hyatt switched its loyalty program from Gold Passport to WoH!, and then made attaining their top elite status much more challenging (read: expensive), many HGP loyalists had voiced their displeasure and said they would stop giving their money to Hyatt. While WoH has since fixed a few things here and there, attaining the only status in the program, Globalist, that’s worth anything under the new qualification requirements is still challenging, even prohibitive, for many. That, and SPG having been swallowed by MR, which then botched the merging of its 3 programs, degraded its previously decent Gold status by taking away the free breakfast perk, got fed up with spoiled former SPG loyalists, prompting the program managers to just begin ignoring the “noise around the edges”, left many members from all those programs ‘homeless’.

    With Hilton Honors making their mid- and top-tier elite levels easy to attain (“Give them status and they’ll come!”), while remaining the only program to offer free breakfast to mid-level elites, HH suddenly became highly attractive to many of the ‘homeless’. That explains where Hilton picked up 14 million new members in just one year – an eye-popping single-year membership increase by any measure.

  13. @Sean, how is losing any business a good thing to do? They are giving up thousands in OPM money from UA elites.
    Chances are if you are an OPM FFlyer – you are staying in hotels for most of your life. Marriott is willing to give up that entire revenue stream to save on what? Breakfast and lounge – whats the real cost of that to Marriott – $5?

    Those 50+ night loyalists will always blindly stay at their chain, but giving up those 20-50 night a year OPM stays, IMO is a major mistake.

  14. Anecdotally, zero stays with Marriott this year. Seven Hilton stays. Was formerly SPG loyal but hovered between Silver and Gold. Free breakfast at Hilton properties for my Gold status (Ascend Card), got me.

  15. I’ve got points left over from the old Marriott which I hope to use in the coming months. Migrated to Hilton last year and so far I am happy with the change. I might stay at Marriott properties in the future but will not follow their loyalty program.

  16. I‘m not sure if the new members are really all that frequent hotel guests (aka „travellers“) … Myself and all my frequently travelling friends have held membership of both (I mean all three) programs, simply because all chaons have some gaps, in paricular outside the US. Arguably the gaps are not dramatic (unlike Hyatt), but, of course, if you have just one property in a large city, this may be inconveniently located for the purpose of your visit.

    But yes, I also shifted some business to Hilton, where I have the choice. However, I did not cancel my membership or any harsh reactions, it‘s more a subtle shift of preference from SPG to Hilton …

  17. I think some of the comment hit the nail. It is less an issue for very frequent traveler or people rarely travel . It is the people in the middle got hit the worst.

    I simply cannot keep my platinum next year with Marriott. I have to spend all my stays in Marriott to qualify ( 35 nights) but sometimes it is just not possible.
    The decision to do away multiple rooms credit ( SPG ) and rollover nights just eliminate the late hope for people like me.

    Besides, Hilton really treat me well and why bother with someone don’t like us?

  18. I’m staying with Marriott at least another year to get lifetime Titanium. For one that doesn’t accumulate miles thru flying and also gets great rates that makes an award stay not good use of points I like Marriott. I can transfer points to airline programs to top them off. That said I am currently Diamond with Hilton and sitting with 1.1 million points with them. I will be transitioning back to Hilton at least on a 50/50 basis after I get lifetime Titanium status. I agree that Hilton could expand footprint and number of higher end hotel and/or resorts, but they excel in the following….

    1) Not blocking award redemptions. Planning a quick stop in Singapore in November and the Courtyard was not accepting award redemptions. Going to Brisbane after that and wanted to stay at Sheraton Mirage on Gold Coast. Several dates blocked from award booking. Didn’t want to piece meal my stay so not staying there. IHG is notorious for limiting award redemptions. At least when I look. I have not ever looked for a Hilton property and not been offered a points redemption if that room was available. That is just me and it may not be the norm. (DCS may want to weigh in as it sounds like he stays at Hilton on a very frequent basis.

    2) Hilton offers points redemption on their base standard room, but also offers graduated point redemptions for higher end rooms. Good option if one doesn’t want to take a chance on not getting an upgrade as a Diamond elite member. With Marriott it is for a standard room. Higher end room based on upgrade as elite member and/or use of upgrade certificate. Certificates available, but on limited quantities. 5 as an elite gift at 50 nights. Maybe 5 more when 75 nights reached.

  19. @EC2, AFAIK, lifetime Titanium was only available if you met the requirements through 2018. So, if that’s your goal, you’re too late…

  20. @Christian — Well, if you’d paid attention, rather than prejudging based on unfounded perceptions, I am sure that you’d already have said it countless times before… 😉

  21. ‘I do suspect they’ve seen a huge increase in Diamond members, but that has more to do with the Hilton Aspire Card than anything else.’

    Nope because we here across the pond aren’t eligible for the card.

  22. EC2. I think you should doublecheck that and get it in writing. My understanding you can only get lifetime plat from 2019 onwards.

  23. @Lucky sez: “However, personally Hilton isn’t a group that I feel like I need to be loyal to, since they give away Diamond status so freely.”

    That’s got to be the non sequitur of the millennium…

    A program is not worth being loyal to because it makes it easy for one earn a high status that comes with perks like the following?
    – free breakfast
    – complimentary suite upgrades
    – executive lounge access
    – $250 resort credit
    – $250 airline credit
    – milestone bonuses after hitting just 40 nights and every 10 nights after that
    – gift Gold status at 60 nights (Diamond at 100 nights)
    – lets you put Diamond on hold for rainy days
    – 100% bonus points on base points
    – offers industry-leading 14x earning rate and promos galore, etc, etc,etc

    Thanks to the last 3 items I was able to replenish points in my account to 833K (including 320K I purchased for just $1,600, meaning that I earned ~0.5M points through stays and promo) after I redeemed nearly 1M down to just 1,596 points last AUGUST for my 2018 Year-end Asian Escapade(tm). In fact, it’s what enabled me a few days ago to afford a 5-night award stay in a $3,200/night villa at the new WA Maldives for 480K points and get an OUTSIZED redemption value of 4.2cpp (gotta be a record!)

    Why else would anyone want to be loyal to a program, if the preceding partial list of perks that one gets and rewards that one can afford thanks to an elite status that’s “given away” is not good enough? No wonder you think it is worth spending $145K on a CC to earn the WoH Globalist status that awards similar perks, but is greatly less rewarding because it’s not as easy to earn a lot of points for one’s own leisure travel (it does not even offer the 5th award night free perk!).

    You and I clearly have different objectives for playing the mile/point game (hint: I like mine infinitely more 🙂 )!

    G’day.

  24. Oops! A comment I just tried to post just went into ‘moderation.’ I think the key word I should avoid in posts to avoid being moderated is ‘@Lucky’ in long posts 🙂

  25. ‘last 3 items’ above were supposed to be:

    – 100% bonus points on base points
    – offers industry-leading 14x earning rate
    – promos galore, etc, etc,etc

  26. I’m sure a lot has to do with the Chase Sapphire Reserve. 2 years ago none of my friends were really in to points and miles. After CSR everyone got in the game. Now that everyone has a ton of points they are also creating loyalty accounts to use the points. So another reason I see a big increase is because way more people are in to the points game. I would say lucky could probably corrolate his site traffic increases bc of it. We know the CSR made TPG.

  27. @DCS – Enjoy being mostly right. It improves your average. That’s what I get for trying to be reasonable.
    In the plethora of comments that you’ve made, never once have I seen you meet anyone half way, let alone ever concede a point. I was acknowledging that you raised some valid points. I’d hoped that you could accept faint praise, but apparently not.

  28. @Christian — Please let’s not go there. That’s how it always starts and then it becomes a cyber-brawl. I am here to comment on the topics of interest, just like everyone else, and not to be praised or disparaged or psychoanalyzed for what I write.

    You can call me sensitized by a recurrent experience.

    G’day.

  29. I lost about 20K Marriott points due to IT issues, and even after I complained about it, they just kept telling me I was issued past stays incorrectly. But, as many points enthusiasts do, I keep track of all my points and stays quite accurately. I don’t know what else to do! So, I’ve decided to move my loyalty to Hyatt. Possibly have my partner go to Hilton…I just wish Marriott got there act together.

  30. For us non-Americans that can’t get access to Hilton Diamond through the Amex card, Hilton still presents a better value proposition. The free breakfast gripe is right, Hilton and Shangri-La still offer free breakfast to Amex Plat holders.

    For me, I’ve done 0 Marriott stays since shortly after the merger compared to 10 Hilton stays. Marriott used to be better as you could quickly earn category 1/2 redemptions through stays or the SPG card. Now that they’ve devalued SPG earning and bumped up most North American hotels beyond category 2, the gap has significantly narrowed. Not all of us care about aspirational properties. Redeeming for category 1/2 Fairfields et al was much more lucrative than saving all our points for maybe 2 nights at a St. Regis.

    For those of us that pay for own travel and don’t consistently do 50+ nights every year to hit Platinum, Hilton is far better as Diamond at 30 stays is more realistic and as you get free breakfast even as a Gold. Combined with the Points Unlimited promo and it gets even better. Marriott is shunning all but their biggest spenders and keeps moving their hotels more upscale. I’m just not sure they realize that there might not be enough customers when you’re the world’s largest hotel chain.

  31. Ultimately I chose a hotel because of that physical property. Don’t care about whether or not they include breakfast or the hotel brand.

  32. I cannot believe no one, from Hilton to Lucky to the commenters, give credit where credit is due: Anna Kendrick.

    I love those commercials. The commercials must be driving business or they would not keep paying to run them.

  33. I’m no Marriott defender, but anyone with half a brain who reads DCS’ statement:

    “…That, and SPG having been swallowed by MR, which then botched the merging of its 3 programs, degraded its previously decent Gold status by taking away the free breakfast perk…”

    knows it’s not factually correct, because Old Marriott Gold = New Marriott Platinum, still 50 nights, still has breakfast, just a re-naming of the level.

    But because it doesn’t fit his “rah rah Hilton” narrative he of course spins lies and half-truths…

  34. Oh please Hilton who unloads Cruise ship guests on their so called high end properties??? You don’t know how to search for a Hyatt or a Relais and Chateau or a Four Seasons? Shame shame shame…………

  35. Current Marriott Golds are at a 25 night status level – that didn’t get breakfast in the past, nor does it in any hotel program right now IIRC.

    Doesn’t fit the DCS Hilton Baghdad Bob narrative though.

  36. Hello
    I m a ambassador member in bonvoy last year 1
    I made 112 night but also become a hilton diamond member now hilton ofer a statut match via his web site actualy i m very happy with hilton who offer much benifite in point and better offer than marriott for sure this merger profite to hilton last year hope to see the reaction of mariott i. Futures

  37. Arne buys SPG, don’t you get the feeling that he hates SPG’ers? He has called us “Rabid” nothing short of having rabies. Now he calls us noise around the edges.

    What a completely disrespectful man.

    I don’t need to ask if anyone else feels this way as I can see it in the many comments.

    Was China buying SPG the better choice?

  38. And a parting shot, I am not warm over Chris Nasseta either. Hilton can be good, but it is getting more spotty.

  39. Bonvoy is a complete disaster.

    July I was Marriott Gold, then Platinum for a day Jul 18, then back to Gold. BONMARPG has refused to discuss the issue and claims someone is working on it (since September/October/November.

    Was awarded two SPG AMEX free 35000 points nights for spend and new renewal. BONMARPG took them away for some reason unknown to anyone and impossible to track. They’ve been working on this since December. No results or even a reasonable response. Charged my account 35000 instead of the award.

    Points still not being properly credited.

    As an HH Diamond can you see any scenario where I would consider staying with Bonvoy?

    Unfortunately all those new Aspire and status match Diamonds are competing for limited reward and upgrade space so we loyal Honors members will be the eventual losers in all of this.

    Unfortunately living outside the US means no Aspire Card possible.

  40. I am HH Diamond about to tick over to Lifetime Diamond.

    I live outside the US, so I’ve done it the hard way. 3 years of my life in Hilton Hotels (actually Hilton has made the 3 years really wonderful). A function of 25 years in the sky.

    Hilton have had me by the “proverbials” due to their respect for me as a good customer. So I love every stay (hmmm, well there’s been the odd one, but they have fixed it).

    Also have Marriott Vacation Club (MVC) in Phuket, for 15 years. It’s been great, but I am just a regular “walk-in” there. But it is still AMAZING.

    The SPG/MR merger has left me OK. I feel sorry for those who have been screwed as I value my status in hotels and airlines (Solitaire PPS in SIA and Platinum in MAS).

    Now that my HH Diamond Lifetime is in the bag, I went to the MVC pitch when in Phuket for my week (timeshare). The pitch “Spend USD10k and get Platinum upgrade for as long as you are in the programme”….(oh, did I mention that you also have to spend another $1000 a year).

    So they are;
    1) Diluting the value of the status
    2) Diluting the value of my MVC ownership
    3) Making rewards nights harder to get (like airlines have been doing for years)

    Now, my HH membership (which did get degraded when Blackstone took over) has still been exceptional. I have NEVER had a reward night not available (but the points are more at peak times…as are the dollars). I, more often than not, get upgraded to a suite. I ALWAYS get breakfast. And, I always get those small things sorted easily & quickly. They are the things that make your trip work.

    I mentioned that I am MR also. Platinum now, but mostly just Silver over the years with a spattering of Gold. The small things, always good. Upgrades? Huh, what is an upgrade? MVC is a separate company (now) from Marriott. That’s a problem. I bought another week on the secondary market (not through Marriott) and they treat that like the Herpes week. They don’t even want to touch it….despite the $1200 a year I have been paying for 5 years.

    My assessment, Hilton is killing it. If I was in Marriott/SPG as my primary, I’d be looking to Hilton in a heartbeat.

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