How Hyatt’s Program Changes Save Hotels Money

For those who can earn top tier in the new ‘World of Hyatt’ program (60 nights or $20,000 in spend) the changes going into effect March 1 are probably an improvement such as an upgrade benefit based on availability that no longer excludes suites, the ability to earn more confirmed suite upgrades by staying more nights beyond the minimum required to qualify, and especially having a dedicated concierge to handle all things Hyatt-related.

While Hilton Honors makes changes focused largely on the broadest base of members, Hyatt is focusing on their very most frequent guests.

At the same time it can’t be emphasized enough that the changes to Hyatt’s loyalty program are going to mean big cost savings for hotels.

  • No more check-in amenity. This was a choice of points of food and beverage. That also means no more penalty when check-in amenity points aren’t posted by the hotel.

  • No more guaranteed turndown service where it isn’t part of the brand standard. Hotels won’t have to keep housekeeping as well-staffed into the evening to accommodate Diamond members.

  • No more compensation when club lounges are closed. Diamonds used to get 2500 points in addition to breakfast at hotels with lounges that close them, usually on weekends.

  • More restrictive breakfast. Instead of breakfast for (4) registered guests per room, the benefit is limited to two adults and two children with each hotel deciding what constitutes a child.

  • There are fewer people to feed. With tougher status-earning criteria — no more status based on stays, no more stays and nights earned from spend on the co-brand credit card, more nights for top tier than before — there will be fewer members on a given night with lounge access and fewer members entitled to breakfast in hotel restaurants.

  • Terms and conditions limit enforcement of upgrades which are to be “determined by the applicable hotel or resort in its sole discretion and may vary from stay-to-stay.”

I’d much rather have check-in amenity points, racking up a free night a year easily, than the free night which replaces those points because that free night:

  1. Cannot be upgraded with suite upgrades or points
  2. Expires 120 days after issuance, and must be redeemed for travel within those 120 days (not just reserved.

Hyatt will deny that this is about breakage (they say they want members to use the nights) or about cost control (less time to use the certs means they’re likely to be burned at less expensive hotels than if members had greater runway to plan to maximize the certificates. But there’s certainly a cost element here as well.

I’ve heard from hotels that they expect lower costs to service Hyatt’s top elite members going forward, and it’s easy to see why.

In the realm of pure speculation, we know that Hyatt was unable to acquire Kimpton or Starwood, so with fewer options left to grow by acquisition they could see the best move as selling. Lower operating costs could make them look more valuable to an acquirer.

On the other hand, if they do have an acquisition strategy in mind, World of Hyatt (with its tougher requalfiication criteria) seems better-positioned for a larger chain than they currently are. Making changes now, before an acquisition, could also make sense.

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 »

More articles by Gary Leff »

Comments

  1. Does thinning the rolls of top elite members make them more or less desirable to a potential buyer? A move to 60 night requirements by a low-footprint chain while bucking the industry trend of counting award nights seems so short sighted that I’ve been curious whether there is something else short-term going on here. They gave away status like candy recently. I wonder whether they’ve had feedback in the acquisition markets that this has been an impediment to getting a deal done. Seems like a buyer would want loyal customers. But I suppose it depends on who the buyer is.

    Hyatt seems almost deliberately to be telling those who have spent tens of thousands of dollars at its hotels, “go ahead to Starwood, or airbnb, or any of the consolidators that aggregates no-benefit hotels stay where you want to say, I dare you.”

    The potential last domino, I think, is going to be whether properties play games with upgrades. If properties are routinely, in their “sole discretion” denying suites to top tier members while their websites are showing many rooms for sale, this is going to turn into a real cf.

  2. I wonder if Hyatt would ever consider buying/merging with Club Carlson. CC seems like a brand with real problems in America with relatively few hotels and losing their big city presence quickly. Yet, they maintain a decent international presence. Hyatt on the other hand lacks a big global footprint outside of a major cities. Going up against the bigger chains, Hyatt seems to need to grow to better compete.

  3. Just shows how little hotel loyalty matters anymore…maybe I’ll do a Marriott status challenge for one last hurrah

  4. Hyatt can stick it where the sun don’t shine. They have a small footprint to begin with and they expect 60 nights? The big boys such as IHG, Accor, Marriott/Starwood, and Hilton are getting bigger. The gap between those guys and Hyatt has never been wider. The biggest threat to the industry is Airbnb. Hyatt in it’s current form is going to find it tough to survive in a big boys league.

  5. of course, i can “save” on swipe fees by not accepting credit cards. but i will end up losing my business.
    i really can’t figure out why on earth hyatt is doing this.

  6. Craziest thing I have ever heard from a business/marketing standpoint. After 10 years of being Diamond I am saying goodby Hyatt and hello to SPG/Marriott.

  7. Hyatt’s delusional mgmt believes they compete with the likes of Four Seasons. When the truth is that the majority of Hyatt nights are endured at #^%*ing Hyatt Place and Hyatt House. as such, Hyatt has waaayyy more in common with Red Roof Inn than it does Four Seasons…

  8. I have to agree with most of those commenting. Hyatt has all-but eliminated themselves from my consideration set for anything other than last-resort (no pun intended) stays. I would have been tempted to chase status with them had it been achievable. Making it unattainable, along with what appears to be making it less “friendly”, has pushed me completely out.

    I’m more amused than irritated – I had very little invested in Hyatt rewards and they were gracious enough to make these moves right as I was leaning in their direction but before I took the leap. But as a “loyalty” program I’m finding these moves a little baffling and very interested to see where they are a year or two from now.

  9. I think it’s Mission Accomplished for Hyatt as far as me. I only got into Gold Passport because I stayed at GH Washington once and another time I came back I was able to use points for a suite. From there it was an addiction staying out of the way paying more so I got my diamond and enjoyed my benefits, especially when I took those holidays where Hyatt had a presence. Come to think of it I actually chose my vacations based on Hyatt availability. At an average of $225/night for my 48-52nights per year I think Hyatt did well. But thanks to this nonsense I booked at 8 nights paid at a nice Ritz Carlton property on vacation, have been using more FHR and Virtuoso stays at unique properties and not driven by status with one requirement don’t put me in a Hyatt, they have other plans.

    So yeah, I’m thankful to Hyatt for freeing me to all the other possibilities. Between them and Kimpton they had a strong hold on me that I never noticed. Kind of seems it was the point of their programs.

Leave a Reply

Your email address will not be published. Required fields are marked *