TPG had an interview with Hilton CEO Chris Nassetta today and one thing stood out to me.
“In terms of devaluation, there’s no news here, and we’re not planning anything,” Nasessta said. The CEO was quick to add that redemptions are “not free” and that Hilton pays individual properties for redeemed award nights. Inflation, he said, has caused room costs to rise over the last five years and the program, in his view, hadn’t adjusted. “We’ve sort of absorbed it,” he noted, “but you can’t absorb it forever.”
Nassetta claims that Hilton has absorbed inflation on room costs over the last five years. Hilton uses a dynamic award chart so it’s difficult to tell how much more expensive award stays have gotten during that time period but we can track the highest price they charge. Changes are as follows:
Some properties reversed the 250,000 maximum price but it remains at some properties. If we take the 2021 maximum price of 150,000 we have seen a ~66.7% increasing during the time Nassetta claims they have absorbed the increased cost. Real world inflation during the same period is sub 20%. If Hilton stayed in line with inflation then the maximum room price would be ~180,000 points.
Saying that nothing is planned and there is no news is corporate speak and meaningless. Given the fact that Hilton feels it is absorbing costs I’d expect a further devaluation in 2026. As always it’s always better to use points than hoard them.
