This points devaluation thing has also become a drag on the lives of points enthusiasts but that doesn't make each new points program any less of a thorn in their side. As the hotel rewards program behind thousands of properties around the world, Choice Privileges has just hit a big milestone: they've introduced a significant, unannounced increase in points pricing for hotels in the most popular Japanese cities. No warning, no transition period, no advance notice to the members sitting on balances they had saved to go to Tokyo.

This is a significant step back for a program which had quietly established a reputation as one of the better value for travel to Japan in particular.

What Actually Changed

The devaluation is a large one. The points needed for properties in big cities such as Tokyo have doubled or even quadrupled in record time. Stays that were once $8,000 Choice Privileges at hotels are now $25,000+ at the same hotels. But that is no little calibration. It is a basic revaluation of the actual value of all the members' balances.

But not all properties were hit equally and despite some in the middle range having a reasonable point cost when measured against cash rates, especially when Tokyo and other big city hotels are charging high prices for their overnight accommodation in yen. However, Choice Privileges' positive properties, which had attracted a lot of attention as a redemption vehicle in Japan, have been particularly affected.

For comparison, Choice Privileges points were worth about 0.6 cents apiece, a figure that is likely to come down as one of the program's most compelling use cases has significantly diminished. Many members were collecting points in the first place because of the Japan sweet spot.

This hurts more than regular devaluation and here's why

The Japanese market has become one of the most coveted tourist destinations in recent years with an unprecedented number of foreign tourists. As a result, cities such as Tokyo, Osaka, and Kyoto have seen cash rates climb significantly that made points redemptions in the country even more valuable your fixed cost in miles or points translated into a greater amount of purchasing power as cash rates rose.

Japan redemptions were made a reality in only a handful of mid-tier loyalty programs, including Choice Privileges. Bals who were planning a trip to Japan will discover that the same points won't be worth as much when redeemed as when collected.

It's a very tough time for the timing. The volume of travel to Japan is growing by leaps and bounds, forward bookings are buoyant, and people who were thinking about going to Japan or had points that they would like to use are now seeing a vastly different value proposition than they did last month.

The Buying Points Question

In the past, Choice Privileges has offered generous promotions for buying points and numerous members have used these offers to fill up their accounts before a point redemption. The math on those purchases a choice that has always been hard to make and now will be significantly different, thanks to this repricing.

A very different calculation at 25,000 points per night as opposed to 8,000 points per night. Even if the user gets a large amount of money in exchange for buying something, there is a high chance that the value that they are getting for the money is not as attractive as it used to be. Members who are thinking of purchasing points for redemption in Japan should take all the numbers into careful consideration before purchasing and compare with the current cash rate.

A summary of the information that is most important to the members

• Many Japan hotels have announced the increase of points requirement by as much as 200% without notice.
• Gone are the properties that cost 8,000 points per night; they are often as high as 25,000 points per night.
• Some of the worst affected by the repricing were properties in the Tokyo area.
• The valuation of Choice Privileges points, which was around 0.6 cents apiece before the change, probably will drop.
• However, most impacted locations no longer make purchase point redemption sense.

A wider warning for holders of points

This devaluation comes as part of a trend that Choice Privileges' members have observed over the last few years. Over several iterations the program has been repriced and each iteration has been a gradual reduction in the range of "best in class" redemptions that brought members in to aggressively accumulate. The use case was one of the very few good use cases in Japan, and it has now been severely downgraded.

This lesson is something that loyalty program veterans have learned: Redeemed points are always safe, but unredeemed points are always at risk. The points that are in an account have no interest, no appreciation and no guarantee as to the redemption value when they are needed. Programs are free to reprice at any time and give any amount of notice, in this instance, none.

For those with a substantial balance of meaningful Choice Privileges to use, the answer is to determine what your best redemption opportunities are, and take action on them now at a faster pace than you probably would have prior to this week's news. The “no effect” mid-tier properties that do not benefit from this wave of price increases could be the best available value in the program, especially at places where cash rates make points redemptions more appealing.

Going forward, whether the program of Choice Privileges makes sense as a primary "accumulation" objective is one that each member will be required to answer for themselves, based on their travel habits and how the program's remaining redemption sweet spots fit their personal travel plans.

The Bottom Line

Japan properties are getting the biggest dosage in Choice Privileges' unheralded devaluation, much to the detriment of the redemption case here. The value of points is up to 200% higher at many hotels in Tokyo and other big cities, with a once 8,000-point-per-night hotel now offering 25,000 points or more. 

Overall value of Choice Privileges has suffered a significant decline, and math for Japan trips has turned sour on the buying points. For those who haven't used them yet, it's a great reminder that in the points for loyalty world, "earlier is better" is the rule.