This morning I published a report about Hilton’s new award program (see: Hilton Honors results are in. Is that Hilton’s middle finger?). In that post I used charts (published with permission from US Credit Card Guide) to support the argument that the new program is much less likely to result in outsized value than the old program. I was wrong.
There’s a great old book titled “How to lie with statistics“. One of the many ways to lie with statistics is to present charts showing different scales in order to make some numbers look bigger than others even if they’re the same. I didn’t do it on purpose, but I certainly should have known better. After all, I’ve read the book (but, in my defense, it has been about 25 years…).
For example, I presented this with max value 30 percent:
And this with max value of 60 percent:
When comparing the two graphs, it sure looks like the chance of getting outsized value from your points has gone down dramatically. And that’s what I claimed in my prior post. But a few readers correctly pointed out that the numbers don’t support that claim. It was the movement of values from .3 to .4 that pushed that “middle finger” up to over 50%.
From US Credit Card Guide’s post we know that the old and new values for the 0.7+ category are 8.796% and 6.496%, respectively. That’s a drop of only 2.25 percentage points. In other words, the chance of getting outsized value has gone down, but only by a smidgen.
The more important point, which I previously glossed over, is that the chance of getting very poor value has dropped quite a bit! In the old program it looks like nearly 45% of the time you would get less than .4 cents per point value. In the new program, it looks like you’ll do that poorly only about 20% of the time. That’s a huge advantage of the new program over the old!
I may have erred with respect to Cash + Points as well. The old Cash + Points rates were only available for a small subset of properties and dates. The new system allows Cash + Points pretty much all the time. If you can book a hotel with points, then you can use points + cash if you prefer. So, the fact that in the old system you could get outsized value over 25% of the time should not be compared to the new system. The denominators are drastically different. That doesn’t mean that things haven’t gotten worse for Cash + Points bookings. It just means that we don’t have the data to make a fair comparison.