Hyatt’s Stay Certificate Devaluation Really Wasn’t Personal

I’ve written in the past about getting significant savings on hotels by buying Hyatt stay certificates.

For years Hyatt would let you reserve a hotel and then buy a certificate to cover that reservation at far less than the hotel’s published rate. Those stays would not earn points or elite credit, but Hyatt did honor elite benefits when using the certificates. This was one of the great loopholes in travel.

I noted last week that several Hyatt hotels appeared to have been removed from participation in the stay certificate program. Many other hotels went up ion category, such that the certificates required for a given property were now more expensive. Changes were apparently rolled out on August 28th.

I reached out to the person that runs Hyatt’s gift card program to get a better understanding of what was up, but he was on vacation so couldn’t suss out what was going on right away.

Loyalty Traveler did a great job laying out the stay certificate category changes across various regions of the world.

I once saved 2/3rds compared to Hyatt’s website rates across 22 room nights in Manhattan using stay certificates. With these changes, those days are long gone.

Bottom-line, there will be targeted opportunities for savings by booking stay certificate rates and then ordering the certificates. But it’s far less broadly applicable a savings strategy than it used to be.

The Changes Support Hyatt’s Strategy of Better Availability and Focus on Bulk Corporate Sales

So what was Hyatt up to? Were they trying to close a loophole? Reduce outstanding liability for existing certificates?

Probably not either one, though the changes do make this a much less useful tool for frequent flyers than before.

The certificate program, I’m told, is over 80% corporate (large quantity purchases).

Hyatt’s gift cards and gift certificates are wholly separate from Hyatt Gold Passport. The certificate program got a new leader within the last year, and a charge to figure out how to make the program more successful. Hyatt says that means focusing on availability of hotels when users want to redeem, and focusing on the corporate market.

Along with higher categories, the hotels where the certificates get redeemed should be getting more revenue for the certificates – and thus should be willing to open up more inventory for certificate stays.

Those of us buying certificates as individuals seeking outsized value simply aren’t the market for these certificates, and aren’t the reason for the decision, even if we’re losing out on an option because of it.

The better hotels, where you could buy stays at the most significant discounts relative to prevailing rates, are also the places where those certificates could be hardest to use. Hyatt thinks this will change, though of course some of the most expensive hotels (where availability didn’t tend to be very good to begin with) are no longer options at all and if we want to buy these certificates we have to pay more to use them at a given hotel than before.

This Isn’t a Predictor of Future Changes to the Gold Passport Program

These certificates are no longer a great individual savings strategy, it was never intended to one and many of us got lucky over the past decade using it. It lasted far longer than most strategies do.

This is a tricky space to be in, Marriott is getting out of the stay certificate space entirely (and even announced the dissolution of that division of the company).

This shouldn’t be viewed as a harbinger of things to come for the Gold Passport program, which has a different value proposition.

Hyatt was the only major hotel program not to devalue in a meaningful way in 2013. They pretty clearly offer the best value for redemptions.

My guess is that future decisions about the value of Gold Passport points largely going to be driven by whether a high value strategy translates into room nights — do consumers reward the program that rewards them?

If Hyatt doesn’t get a benefit for being “overindexed” (to use a term coined by Hilton HHonors’ Jeff Diskin), then they might well devalue in the future. While hotel properties that are expensive for the stay certificate program are also exensive for Gold Passport, these gift certificate changes will not have been a precursor to it.


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About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. were you troubled by the lack of any pre-notice by hyatt?

    maybe this isn’t a precursor to a larger deval, but isn’t this an indication that hyatt seems ok with changing their programs’ rules with no advance notice (or really even no notification during the change)?

  2. @jay – hotels have always come and gone, and changed category in this program without notice. Their focus hasn’t been on consumers in this program. Fair enough, I do not like it one bit, but I don’t think it says anything about the Gold Passport program is my only point.

  3. Cool story, bro. I don’t appreciate the corporate pass-the-buck excuse, the singular Hyatt brand is what consumers see, and all the internal machinations in the world don’t change that.

  4. Look, this sucks, I just thought the thinking that I was able to pass on would b interesting to some.

    And I do think that the context matters, for instance I was pretty hard on Hyatt, guns swinging, when they eliminated the Passport Escapes awards. I thought that sucked too. But I understood the thinking more when I learned that fewer than 100 of those awards were redeemed each year. If I were them I wouldn’t maintain the award (and the training that goes with it) either, as much as I personally valued it and miss it.

  5. At least with the Passport Escapes, announcements were made to give people advance notice to book them before they went away.

    With this, one minute you have a cert that allows you to stay at the Park Hyatt Chicago, the next minute…you don’t.

  6. Notice is very important when devaluing points that people have earned and built up in their accounts towards future rewards.

    But in this case it’s taking away an option, not making what you already have worth less. (The ‘correct’ way to play this game was to make the certificate reservations and THEN buy the certs.)

  7. i think this is terrible. Generally, although I don’t like so many of the changes Hyatt has made the past few years, they have been good at letting us know months ahead of time. This one without notice is discraceful.

    The changes are very big. many properties that I used to get at $185 – $250 with the stay certificate are ALL over $400 now! OUCH. Really this will just turn me on to Priceline/Hotwire now where I may or may not get a Hyatt but is it really worth the extra $200 to $300 just to get a free breakfast. I don’t think so.

    Again I am glad that Hyatt STILL (and I expect this to change with all the devaluations they are making in the Gold Passport program) that they give Diamond benefits even when redeeming points or stay certificates. Soon, the loyalty program will only reward those who are loyal to paying higher rates…

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