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American Express has launched a new bonus of up to 50% for transfers between Membership Rewards and Hilton Honors made by 14 April 2020. Historically such transfer bonuses have been targeted and have ranged between 10% and 50% so you’ll have to log in to your online account to see what bonus Amex has chosen to offer you.
The Math Behind This Offer
I value Membership Rewards points at 1.5 cents each and I value Hilton Honors points at 0.4 cents each and those valuations are key to working out just how good (or bad) this transfer offer is.
Under normal circumstances, 1,000 Membership Rewards points convert to 2,000 Hilton Honors points and, as that’s essentially $15 worth of points converting over to $8 worth of points, I don’t see it as a good deal.
But the math changes when a transfer bonus is introduced.
Here’s the math for the various transfer bonuses that are probably currently showing in cardholder accounts:
- 10% Bonus: 1,000 Amex points = 2,200 Hilton Points ($15 of points -> $8.80)
- 20% Bonus: 1,000 Amex points = 2,400 Hilton Points ($15 of points -> $9.60)
- 30% Bonus: 1,000 Amex points = 2,600 Hilton Points ($15 of points -> $10.40)
- 40% Bonus: 1,000 Amex points = 2,800 Hilton Points ($15 of points -> $11.20)
- 50% Bonus: 1,000 Amex points = 3,000 Hilton Points ($15 of points -> $12.00)
The math would appear to indicate that even if you’ve been offered the 50% bonus this isn’t a deal you should be considering…but that’s not the whole story.
How This Can Be A Good Deal
It’s important to remember that miles and points valuations are subjective (you may value your balances differently to how I value mine) and they’re only a guideline – they don’t form a hard and fast rule.
Because of this, there will be times where taking up the opportunity offered by one of these transfer bonuses will make a lot of sense…and there’s math to back this up.
If you’re rich with Membership Rewards points and low on cash (and Hilton Honors points) it could make a lot of sense to transfer over some Membership Rewards points to make a Hilton booking that would otherwise eat up yet more of your cash reserves – at times like this individual points valuations are essentially meaningless because the primary aim is to preserve cash (anyone who tells you otherwise should be politely ignored).
There may also be times when a Hilton Honors booking offers such great value the math shown earlier goes out of the window.
Take this example of the Waldorf Astoria Beverly Hills where a room can be booked for 95,000 points or $695 + taxes:
To get the 95,000 Hilton Honors points needed to book this room, an Amex cardholder would need to transfer 32,000 Membership Rewards points across to Hilton Honors (assuming a 50% transfer bonus) and, by my valuation, those Membership Rewards points are worth $480.
The cash rate for this room for the same date (once the taxes and fees are added in) comes to over $840.
If you wanted to (or had to) book this hotel on this particular date a Membership Rewards transfer to Hilton would be a no-brainer.
If you don’t have an obvious and immediate use for any Hilton points you would generate by transferring Membership Rewards points over to Hilton Honors this is an offer you should probably ignore.
If you have an upcoming need to make a Hilton award booking you simply have to work out the value you’d be getting from any transfer you plan to make to see if the offer you’ve been targeted for is any good.
On this occasion, I’ll be passing on this transfer bonus but I can see it being useful for some.