Via Deanna Ting at Skift, Hyatt’s CEO says, “We’ve seen very positive member response both in terms of acquisition of new members and retention of new members and their spend.”
- More members are signing up this year than last year
- Those members are spending more
Grand Hyatt San Francisco
And that’s their argument that the new World of Hyatt program is performing well.
However both of these metrics have nothing whatsoever to do with Hyatt’s revamped loyalty program.
Remember that for the general member nothing changed about the program this year. What’s different are the elite tiers. Top tier is harder to earn and more rewarding. And while Hyatt is downgrading the status of those who used to qualify for Diamond on 25 stays or who stay fewer than 60 nights, the total number of Diamonds under the old program wasn’t more than 50,000 members. Many will retain top tier under the new program.
The new program is all about cutting costs. The metrics Hyatt is talking about say nothing whatsoever about the members harmed by changes in the program. And they don’t actually say anything about the program.
Grand Hyatt Hong Kong
There’s a very simple reason why membership is up. Hyatt, like other chains, offer ‘member rates’ that undercut online travel agency rates. Contractually these cannot be public rates bookable by anyone, or they would have to be offered to the likes of Expedia and Priceline. Instead you have to join the program to get the discount.
And indeed Hyatt reports that “more than 70 percent of bookings with member discounts came from new or formerly inactive loyalty members.”
What’s more, hotel revenue per available room is up industry-wide. And Hyatt says it’s up at “our hotels using member discounted rates” so it’s no surprise that it would be up for loyalty program members.
Hyatt says their member rates – and therefore membership in their loyalty program — has “been constructive in terms of engaging new customers and engaging previously inactive customers, and also yielding positive results for hotels that have deployed those discounts.”
Increased program enrollments, and increased revenue from program members, appears to be a function of the state of the industry and member discount rates and appears to have nothing whatsoever to do with the new World of Hyatt program.