The Hilton CEO’s recent comments assuage no fears about another looming devaluation, and I think it’s time to sound the alarm before it happens again.

Hilton CEO claims they’ve absorbed inflation on behalf of members

The Points Guy reports out from a Hilton event they attended with other reporters:

“In terms of devaluation, there’s no news here, and we’re not planning anything,” [Hilton CEO Nassetta] 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.”

Uhh, “we’ve sort of absorbed it”? We know that isn’t true because the hotel chain has continually devalued–not once, not twice, but thrice in the last 18 months. The only thing we’ll say positively is that third devaluation perhaps was a bridge too far because they later dampened it.

However, it’s incredibly disingenuous to imply that Hilton Honors is doing members a solid by not raising costs for members. They most certainly have raised prices. But, if we’re being fair, there is some truth buried under the layer based on how the Hilton Honors program is structured.

Hilton prices award nights dynamically

Let’s first dispel the myth right off the bat about your average Hilton property. As the price of the average night cost goes up in cash, it will also go up in points required.

To show this off, let’s go to Iowa City where properties most certainly are not topping the charts in award price. Specifically, we’ll look at the Graduate by Hilton Iowa City. On a random weeknight, you’ll see the cash price come in relatively low and the points price follows.

But switch to that weekend and the cash price jumps. Guess what? So does the points price.

This is literally how his program works: for the average hotel night not hitting the cap, it’s inflation-proof. In the first example, $142/37,000 points = $0.004/point. In the second example, $263/60,000 points = $0.004/point. I didn’t cherry-pick results–this is literally the first example I tried and it worked as expected.

“Points leveraging” impacts the max properties

The only place where the Hilton CEO’s comments hold true are at properties where you hit the max. Granted, each hotel has its own max points.

For this, let’s go to the Grand Wailea, a property we’ve been to and one that’s popular with Hilton loyalists in Hawaii. Go during low season and you’ll find the price of nights is sitting at 110,000 Hilton points/night.

Come during summer and you’ll find the same–it might cost more money but the number of points required stays the same.

The fixed hotel cap places a limit on what the member pays, but the hotel chain pays for more than the cost of trend. Think of it this way: at $0.004/point in value, 110,000 points would normally cover $440 in hotel expense. What remains is the hotel loyalty program’s share of the tab. That’s $534 in the first example and $624 in the second. To the hotel chain, that’s an increase in cost at a rate of 17% ($624/$534 – 1). But in terms of actual cash price, it’s much lower at 9.2% ($1,064/$974 – 1).

This effect is called “trend leveraging” in the insurance world. Or, since cash prices don’t necessarily just have to go up over time and can vary a bit day by day, let’s call it “points leveraging”. The same dynamic happens anywhere there is a fixed price you need to pay but the true price increases behind the scenes. A prominent example might be health insurance deductibles, especially given the high medical inflation rates.

Now, Hilton somewhat accounted for this in some of their devaluations of late. They allowed some of these upper-end properties to have “rule buster”-like points pricing for the highest of high seasons. Over the Christmas holiday, the Grand Wailea has an even higher points price to go with that higher cash bill.

Hilton Honors might say you’re getting a great deal here at triple the value of your points compared to Iowa City ($0.012/point based on $2,104/175,000). But good luck amassing that many points. A better strategy might be… oh, I don’t know… staying somewhere else?

With five years as the timeframe, the problem is high-end hotels

So, let’s go back to the original quote. Nassetta claims the problem specifically is within the last five years. What has jumped in price heavily since the start of the pandemic? Luxury travel, of course:

[High-income earners’] free-spending habits are keeping the luxury-hotel market buoyant and enabling even posher, ultra-luxury properties to charge higher prices.

Between 2019 and 2025, average daily rates in this sector increased from $1,042 to $1,561 in New York, from $1,245 to $2,600 in Paris, from $1,113 to $1,593 in London, and from $715 to $1,547 in Rome, according to CoStar.

The problem isn’t the Iowa City Graduate hotels, it’s the upper echelon, the cream-of-the-crop, the OMG experiences that everyone must spend all their money trying out. Prices for those hotels are skyrocketing unabated. Will this trend eventually end? Perhaps when the price becomes so high that no one can reasonably afford it. At some point, people run out of money but that limit hasn’t yet been reached.

Hilton doesn’t understand how loyalty works

Let’s take this all in:

• High-end hotel prices have surged over five years and may continue to surge
• “Points leveraging” is placing more of the burden on Hilton Honors for high-end hotels

That sure sounds like another devaluation is imminent. CEO Nassetta claims no devaluation is “planned”, but we all know that prevents nothing. If we’re being pedantic, “planned” just means it’s scheduled to be implemented. They can have conversations about what another devaluation would look like, but not implement it yet for a specific date.

It’s our belief that Hilton is looking at this incorrectly. Points are supposed to be a reward for toughing it out in their hotels. The intention of a loyalty program is for people to tough it out at the Iowa City Graduate hotels of the world. And then, when they get a breather from work, continue to stick with the hotel chain for their vacations at Grand Wailea or other properties. Isn’t that the definition of loyalty? Staying at a place when you have other options?

But another devaluation that further raises points prices? Spending 175,000 Hilton points on one night is ridiculous. That requires $8,000 in room rates (before taxes) in spend as a new Diamond Reserve to get enough points for one night. Sure, there’s a fifth night free benefit on points, but those prices suggest $32,000 in room rates (before taxes) to get a week. And they want to make it worse than this because Hilton is “absorbing” it and they “can’t absorb it forever”? It’s that last part that we have issue with, and makes it seem like it’s coming sooner than expected.

By the way, that $32,000 spend to earn one (1) free night at the Grand Wailea over the holiday period? Hilton only wants $18,000 in spend to earn their new Diamond Reserve status. So how’s that for loyalty? You can earn Diamond Reserve and still only be halfway to earning a free night at that hotel. And that’s not even their most expensive property on points.

Price the luxury hotels out of reach for members and they might choose a different hotel for their road warrior weeks in Iowa City or anywhere else.

Seems to us you should do yourself a solid and use up the last of your Hilton points.

Suggested reading:

• Hilton Honors Diamond Reserve: New But A Loyalty Miss
• The Value of a Hilton Elite Night (2026)
• How Rewarding is a Night at Each Hotel Loyalty Program?