Hilton Cut What Hotels Pay Into Honors By Up To 32% — No Wonder Award Nights Cost So Many More Points

I think we now know why Hilton has been devaluing its points. In their second quarter earnings call on Tuesday they revealed reducing the charge owners pay for the Hilton Honors program by 30 basis points, for instance: Hilton Hotels: 4.3% -> 4.0% of member folio Hampton Inn: 4.9% -> 4.6% Hilton Garden Inn: 3.6% -> 3.3% Homewood Suites: 2.5% -> 1.7% The fee change can be found in Hilton’s 2026 franchise disclosure documents compared to 2025 (here is Homewood’s 2026 and 2025). They’re taking less money into the program, which means they need to spend less as well. One way they can accomplish that is by charging guests more points for free room award night. And they’ve certainly been doing that. Another interesting tweak, notice that Homewood Suites didn’t just drop 0.3% – it dropped 0.8%. That’s a 32% reduction in owner cost. At the same time, base points-earning was cut from 10 to five points per dollar for bookings January 8 onward. Base points-earning actually fell 50%. Owner assessment costs and hotel points earning and redemption isn’t 1:1. At the same time they have a RISE program to reduce owner payments by 50 basis points for U.S. and Canada hotels that meet guest satisfaction metrics, currently applies to about half of hotels, and they expect that number to grow. RISE may be consumer-positive, hotels pay in less if they meet a minimum customer experience score. That creates an incentive to maintain service that guests care about (and flexibility to do it in whatever way they find most cost-effective). It’s a low bar since half of U.S. hotels already qualify. “RISE 2” is in the chut with Hilton reviewing hotel profit and loss statements for “workforce innovation,” purchasing savings, brand-cost discipline and changes to operating and physical-property standards. That suggests incentivizing fewer employees, cheaper procurement, elimination of amenities and looser renovation requirements in the future. The last thing is we’re doing another body of work, which I would sort of describe as RISE 2 internally, which is trying to figure out, in a very granular way, across the entire P&L, as I mentioned in my comments, across our entire cost structure, across all brand standards Both operating and physical property level standards. Are there things that we can do to continue to push the envelope? More flexible renovations may increase inconsistency. Combined with Hilton’s conversion-heavy growth (36% of Q2 openings and expected to be 40% for the year), expect it to widen the difference between expected brand standards and actual physical product. A few notes on the call about demand are that while revenue per available room increased 5.4% during the quarter, 2.7 points came from World Cup demand and easier comparisons The underlying run rate was up a little over 2.5%. Business transient (independent, short-stay, last minute bookings) rose 5.7%, driven by small and medium businesses at roughly 7% Leisure increased only 1.6% Expect then tighter availability midweek and better pricing and availability for weekend leisure stays (also better weekend upgrades, to the extent Hilton actually offers those at U.S. properties). Topics on this page