I can’t help but smirk just a little about Priority Club. Back in 2010 Hilton devalued their award chart, and as a response Priority Club ran a “Luckiest Loser” promotion, whereby they gave those with the highest Hilton HHonors points balances up to 20,000 Priority Club points. It was a nice gesture to make people feel better about Hilton’s devaluation. Their chief marketing officer even said:
“If you want your loyal customers to stick with you during tough times, it’s vital to show you appreciate them and give them more value, not less. So it’s no wonder there was such a negative reaction to Hilton devaluing their points programme,” said Tom Seddon, chief marketing officer, IHG.
That sounded great until Priority Club substantially devalued their award chart less than two years later with little advance notice. Priority Club is unique in that their award pricing is by hotel brand, with each brand having a range of award costs (while most other hotel loyalty programs just have categories independent of the individual brands, with each hotel’s category dependent on average rates/demand).
It seems Priority Club will be going that route as of January 16, 2013, as they’ll be moving away from the brand dependent pricing and instead have nine award categories.
Their new award chart will look as follows:
It’s interesting to note that while the change kicks in on January 18, 2013, they’ll honor the old prices until March 18, 2013 by phone. The only problem is that they’re not publishing the new award prices yet, and the old award prices won’t be published after January 18, so it would make sense to jot down the award prices for the hotels you’re looking at so you can tell whether the price went down or not (or make a speculative booking now if you think the cost will go up).
You can find an open letter from the director of Priority Club Rewards here, though I’ll just share the part I find most relevant:
As you can imagine, this new chart will mean some hotels will be changing the number of points required for a Reward Night. Less than 30% of our hotels will be increasing with this change. But this also means that we can lower the points required at some hotels; more hotels, in fact, than we’ll be increasing. Not only will we be lowering points required at more than 30% of our hotels, we will now have more than 500 properties available at our lowest category – 10,000 points.
For the most part this won’t have a negative impact on “aspirational” redemptions, given that those hotels are mostly already in the highest category, and that was already 50,000 points per night. So I think we’ll see award costs more closely reflect the cost of a revenue stay than just the brand of hotel you’re redeeming at.
As a totally random example, take a look at the InterContinental Warsaw, which consistently has rates of ~75 Euros per night, yet costs 40,000 Priority Club points. The points requirement is almost entirely based on the brand as opposed to the cost of the hotel.
Meanwhile there are hotels like the Candlewood Suites Times Square which are only 20,000 points per night, despite rates of $200+.
So I think the trend we’ll see is that lower end hotel brands in expensive cities will go up in price, while the higher end hotel brands in cheap cities will go down in price.