How Hyatt is Deluding Themselves Into Believing Their New Program is Performing Well

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.

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. One thing I hate about Hyatt is they close your account for inactivity! Why do they do that? I’ll take my business elsewhere thank you very much!

  2. I’m looking forward to what they say next year when I’m guessing there will be a big drop in the number of Globalists due to the 60 night requirement. I’m enjoying my Globalist this year but I won’t requalify and will focus on other chains in 2018.

  3. This post says that the CEO claims an increase in new members and increased revenue from these new members.

    But was there any mention of the WOH program’s success/failure with existing elite members and their spending levels in reaction to the cuts to the program?

  4. Not sure all those new customers are new. I had about 60 nights with Hyatt, and stayed with them a bit before I became Platinum with Marriott, but I kept putting a few nights a year in at Hyatt and maintained Hyatt Platinum level for a couple of years. I guess I missed a year somewhere because they closed my account. Mind boggling, that’s like the Facebook friend who deletes you if you don’t see them once a year in real life… It’s the textbook thing not to do if you want to maintain a relationship and encourage loyalty.

  5. I can only offer my own data point. Since the new program my stays with Hyatt has gone to near zero and stays with SPG have almost doubled (I was already Plat with SPG) Used to be a question on which chain to stay with. Not any more.

  6. @VX_Flier not just here, but it’s their mantra, when I met Debra Goetz (SVP) last month she made the case that member signups were a metric of suggesting success of world of hyatt as well

  7. It’s quite delusional. The free breakfast / lounge access is a key benefit at full service hotels favored by business travelers. The benefit is standard for Marriott mid-tier and even at otherwise mediocre Hilton. Nada for Hyatt except for the 4 certs. So all else considered I will choose Marriott (and soon SPG) if rate is the same. Now to be fair the old program didn’t offer free mid-tier breakfast but it also had easy DIA challenges.

  8. I guess this confirms what most of us suspected as the reason for WOH requiring guests in the Guest of Honor program to sign up as new members if they weren’t already. Gotta get their numbers over inflated.

  9. 2 nights this year, maybe a few more while burning the free globalist night. Program elite too difficult to achieve and doesn’t reward the achievement.

  10. I’m at only a couple of paid nights this year as a Globalist. There are literally thousands of us who have gone from at least 25 stays down to near zero. But they have to find a way to spin their new shiny program as positive. I’m guessing they’ll offer a challenge to those of us who are not able to achieve the lofty night total; maybe 12 nights in a quarter? I hate their new program. Hate.

  11. I’m a single data point, but the new program has increased my nights. I was a frequent guest last year, but I really like the free nights and extra suite upgrades available at 60+ nights. I’ve given up staying at Hiltons this year so I can get more Hyatt stays. I look forward to fewer people in lounges; some lounges feel like they are overrun.

  12. My job entails 70%+ travel and in the last 7 or 8 years, at least half of my stays were Hyatt locations. This year? I have 9 nights and only because I stayed in an MGM hotel in Vegas. Most of my hotel stays this year have been a combination of Marriott and Hilton.

    Stay classy WOH…

  13. Speaking of Hyatt……

    They’ve just about sucked the value out of the Free Night earned with the Chase Hyatt card. Not a single Category 4 or lower property in Manhattan. None in central London either. The recent category creep and overall sparse footprint leave little to gain with that card.

  14. I do have 38 data points of accounts i manage and I can tell you they reduced their Hyatt nights by over 90% from 25 -48 stays per account last year to under 10 each and just burning points. All are happy with Hilton Dia and / SPG and Marriott Platinum. Sorry Hyatt.

  15. As a Lifetime SPG, I switched to Hyatt due to the Marriott take over of SPG..

    I personally think the new Hyatt program is kind of stupid….I’m not a Globalist, I just travel a lot for business with 99% being domestic.

    I will say that the service from Hyatt puts SPG to shame….I used to complain quite a bit about service at all levels of SPG….I find Hyatt rarely gives me reason to complain and when I do, they are all over it.

  16. As a lifetime Marriott Platinum for over 20 years, and now a lifetime SPG Platinum, I have tried Hyatt.

    Since most of my stays are award nights, and award nights do not account towards Hyatt status, I am going to find it very challenging to gain Hyatt status, for the Chase Hyatt Visa gives me the Discoverist status (10 nights), but that does very little for me.

    Am I missing something here, does Hyatt want to be competitive with Marriott/SPG? Then why is Hyatt requiring so many paid stays, and ignoring the award stays?

  17. Like many here I’m a multi-year Diamond that is leaving them. I’m writing this from a Regency, but this will only be my 21st night with them this year. I could have made Diamond (oh, right, Globalist), but I’m not even trying. The changes to the program are only one small part in what I see as a systemic flaw in the direction Hyatt leadership has taken the company for the last few years.

    A comparison of the general treatment received from staff at Hyatt versus Hilton (my new go-to) seems telling to me. Hilton, mostly, focuses on the customer experience, whereas Hyatt’s first priority is what’s best for the hotel.

    The litmus test is at check in: do they insist on seeing your id? If yes, it seems to hold true that, from top down, their concern is the hotel – not the customer. There are exceptions, in both directions. I found the Boston Regency by the airport quite customer centric. And just because another brand doesn’t bother doesn’t mean they’re all about the customer.

    But Hyatt instituted this at a corporate level. I think that is telling as to how they view customers: as potential lawsuit threats. This attitude of company-first appears in a lot of little ways. The ID at check in policy is only the one we see first at a hotel.

  18. Not sure how you devalue a program, tout is something the members wanted and now claim members are clamoring to spend money with Hyatt. Interesting.
    For my experience, i have stayed less, earned higher status with other programs.
    I did stay at a Hyatt Place in Atlanta last night… Styrofoam plates, plastic glassware and silverware. No improved breakfast. Everything cheaper. Things have changed since I last stayed at a Hyatt Place.

  19. Hyatt is dumb dumb dumb. Keep burying your head in the sand while your customers go to other loyalty programs.

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