Last week it emerged that both Delta & United were considering selling miles to their credit card partners in advance at a discount. Today Hilton issued a SEC filing (confirmed by American Expess here) that included they had presold American Express $1 billion worth of Hilton points. The relevant part of the SEC filing is as follows:
In April 2020, we pre-sold Hilton Honors points to American Express for $1.0 billion in cash. American Express and their respective designees may use the points in connection with the Hilton Honors co-branded credit cards and for promotions, rewards and incentive programs or certain other activities as they may establish or engage in from time to time. We will use the proceeds from the Hilton Honors points sale for working capital, general corporate and other purposes.
It’s unclear what discount was provided to American Express on these points. It will also be interesting to see if we see increased sign up and spending offers as a result of this purchase or not.
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Looks like this has already started to devalue points even more. Was looking at places like Bora Bora again. I booked last year for this trip that I just came back from in March of this year. Paid 90K a night at the Conrad. Now the cheapest you will find is 151K a night. Maldives was the same being able to book about 95k a night. Go now and the cheapest you will find is 330K a night. One of the places I was looking for as well was Moorea which would've came out to 330K for 5 days. Now if you go and try to book its 209k a night. Nuts! looks like Hilton points might be the new pesos.
Incredible! Devaluation is the name of the game. Offer point promos and then devalue the point currency. I booked a Hilton property for 10k/night in 2017 and 2 years later it went up to 20k/night.
HOW MANY Hilton points did Amex get for $1 billion? I'm guessing 6 billion points.
I am sure AMEX got a good deal. They did the same thing in 2009 buying a billion in airline points at a discount; I think it was from Delta airlines, but might be wrong.
Read the article above carefully. Delta JUST sold miles at a discount THIS YEAR to its credit card partners, and in the USA that means Amex.
So Amex JUST did this sort of thing with Delta first, and now with Hilton.
I used up all my points at Amazon, thank you very much. No plan to travel until end of this year or next year so before they devalue any more, I figured might as well use them.
Is that still available? I have 467,000 Hilton points.
You can use them any time you want for 0.2 cent / HH. Hardly a deal.
There was a time they were worth .5cpp on amazon. If only we could see that again
I keep hoping that amazon cash out happens again but am not holding my breath
what the hell is a presale? This isn't a concert
I hope they put in a condition to not devalue within a certain timeframe
Soon you will need that $1 Billion in points to book a 5 night Resort with the 5th night free...
But when Amex sells them to you for 1099 purposes they become worth 1 cpp
What does this mean for those of us who have the Aspire, who have 200K Hilton Points sitting around. I really don't want things to start devaluing or should i convert them to cash or wait out. Any advice helps?
Doesn't necessarily mean a deval - amex could just be pre purchasing points at a cheaper rate and will dole them out over a few years as people spend on their CC's. In that case Amex wouldn't want a big deval since they would own a ton of points themselves and must have discussed strategy a bit with Hilton.
A deval doesn't directly effect AmEx they are not directly using them they are doling them out for CC spend/sub.
Deval impacts the user
How do you convert to cash?
On a separate news:
'Gilead Sciences shares surged by more than 15% in after-hours trading Thursday after details leaked of a closely watched clinical trial of the company’s antiviral drug Remdesivir, showing what appears to be promising results in treating Covid-19.
The University of Chicago’s phase 3 drug trial found that most of its patients had “rapid recoveries in fever and respiratory symptoms” and were discharged in less than a week, health-care publication STAT News reported.
“The best news is that most of our patients have already been discharged, which is great. We’ve only had two patients perish,” University of Chicago infectious disease specialist Kathleen Mullane said, according to STAT News, which obtained a video of her remarks.'
Isn't there a much cheaper and currently available treatment, a combination of hydroxychloroquine and azithromycin? Not without risk of side effects, but also not much of a profit margin either...
I’m outraged Hilton would flood Amex with cheap points, without public notice! What timing as I fortuitously drained my HHonors account for a Conrad Tokyo getaway last night.
2 out of 123 die. 1.5-2% death rate....same as without the drug. 20% in critical condition.....same as without the drug.
Yeah, seems like it’s working great
123 is not a population of covid patients, but a population of covid patients who were severe enough to be admitted, versus sent home to self-quarantine.
Definitely not the same thing.
'Out of the 125 people, 113 had severe disease' so not fair comparing to a % of the total population that have Covid. There is hope.
Those were patients considered to have severe disease, a group which has a much higher fatality rate. If it is real, thats a big difference, but you cant take one second hand leaked report at face value.
Hopefully that stock opens up high as I plan on buying a put on it.