Hyatt CEO: Expect to See Changes in World of Hyatt Program Next Year

Hyatt is in a tough spot strategically. They aren’t big enough to compete for a significant share of global corporate business, with only about 1/8th the hotels of Marriott and Hilton. They aren’t big enough to compete for the bulk of wallet share from frequent guests — they just don’t have hotels everywhere customers need to be.

Hyatt tried to expand via acquisition but they lost out in the race for Kimpton and then were unsuccessful going after Starwood.

It’s tough for Hyatt to be acquired in a hostile takeover, the structure of their stock gives the Pritzker family too much say. But they could be ripe for a friendly deal.

Grand Hyatt San Francisco

And while the changes to the World of Hyatt program seemed at first glance geared towards a bigger chain than Hyatt — raising elite status tier requirements made sense if they had tripled their size by buying Starwood — much of the program is about lowering costs. Here are six ways the program is designed to save hotels money.

Third quarter earnings were down over 70% year-over-year.

And now Hyatt is shifting its hotel ownership strategy.

  • They’ve historically talked about ‘asset recycling’ — selling hotels to allow them to buy other hotels in key markets. They will buy a property that they view as strategic, bring it into the portfolio, and eventually selling it with a long-term management contract and using the cash to move strategically into another property.

  • But they’re now going to move more towards an asset light model, targeting the sale of $1.5 billion in hotel assets, focusing more heavily on the fee income from hotel management.

It’s seemed like the chain has been strategically listing. They brought in ex-Starwood executive Mark Vondrasek to lead the loyalty program and also try to integrate the new touchy feely brand stuff Hyatt bought. They’ve acquired Miraval and Exhale spas and are supposed to connect with customers emotionally through cleanses and relaxation or something.

Then he brought in another ex-Starwood executive to run the loyalty program day to day.

Park Hyatt Chennai

New leadership for the loyalty program — that bypasses the Chief Marketing Officer — is something you do when things seem wrong. Hyatt has claimed the new program has performed well but the metrics they’ve talked about don’t show that at all.

Hyatt CEO Mark Hoplamazian continued to offer the spin in the chain’s earnings call that new program signups are an indication all is well with World of Hyatt — despite the changes to the program coming at the elite levels and not the new member level, and when new program signups is what you’d expect when introducing a discounted ‘member rate’ that requires joining the program.

We continue to enhance guest engagement through branded experiences that resonate with the high-end traveler. Additionally, World of Hyatt continues to attract new members and deliver a value proposition that is appreciated by our guests.

Nonetheless Hyatt’s CEO says we can expect changes to the program over the next year.

“They both bring tremendous depth of experience in taking consumer info and data and translating that into initiatives that really add value to the program. You can expect to see some changes over the next year as they spool up their efforts.”

We don’t know what those changes are going to be at this point. They could just wind up being better integration of Hyatt’s lifestyle brands into the loyalty program, perhaps offering World of Hyatt elite members a free master cleanse at Hyatt House properties.

However it’s clear Hyatt’s CEO doesn’t see World of Hyatt as it stands today as being where they want the program to be.

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, 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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  1. I hated to lose Globalist this year but It is not even competitive.. They lost 25 revenue stays from me and any value from partner transfers (Chase). I would go back in a heartbeat if it was 25 stays again…

  2. Well, his most loyal customers do not see World of Hyatt as being what they want to see either.
    They should just “grandparent” in the status from last year…. and chalk up 2017 as being one big screw up.

    Can you pass this suggestion along??

  3. They saved money by not having to clean any of the zero rooms I stayed in this year. If they fix the programme and reinstate my status I’ll come back.

  4. Just getting rid of the stupid new elite status names would be an excellent start for the World of Hyatt. 🙂

    That said, I’ll be very surprised if Hyatt is still an independent company in 5 years. They’re just too small compared to their competition.

    And losing Hyatt would be a shame. I’m amazed there are so many people who “care” about their program in frequent flyer circles because, honestly, the program doesn’t make sense for most travellers — including most frequent flyers. Their footprint is just too small. But where the program is excellent is if you’re a frequent flyer enthusiast, have access to Chase Ultimate Rewards, and just need a decent urban hotel or suburban motel. The conversion rate from Chase to Hyatt is very good. At many properties, you can even buy up to the executive floor if that’s your thing. It makes having Hyatt status seem even more pointless to me but, hey, everyone’s needs are different.

  5. I went from 50 nights last year to under 10 this year. SPG is better than I thought,too! And Hilton is there where I need a backup. Thanks, Jeff!

  6. If they reinstate changes it still won’t affect many of us that have pushed stays to other chains.

    @iahphx – I agree with you, using Sapphire Reserve on hotel stays and not worrying about loyalty saves you money, makes you flexible, and you still have access to Hyatt award stays. Suite upgrades and breakfast isn’t worth that much to me, now I can chain hop (spend $300 on the Hyatt card get $50 off, 2 stays at Marriott Megabonus gets me a free night)…I’m much less concerned about status now.

  7. I switched from staying at Hyatt properties to another company that offered me better perks then Hyatt since they watered down their perks for loyalty. Have stayed over 45 times at a different hotel chain so far this year. 2 years ago Hyatt had 100% of my business. Now they are getting zero.

  8. I echo the others. I’ve abandoned Hyatt and my Globalist status but would return in a heartbeat if they brought back stay qualification (25-30/year)

  9. I’m concerned about the move away from asset recycling. That’s how all of my favorite Hyatt properties entered into the program. (Because, in many markets, partnering up with Hyatt versus a Marriott/Hilton is a tough sell.) If they lose that, how will they maintain presence in key markets and enter important new ones?

  10. I may switch a 5 night paid stay over thanksgiving to Marriott as it would make me hit 60 nights too soon. I want to use a TSU next thanksgiving and am worried the new TSUs would expire in the middle of the stay since that one is longer.

    So dumb.

  11. hyatt is great for family trips. No other programs gives you what hyatt gives at resort destinations. I really don’t care when I traveling for business if I get upgrades etc but on family travels I do and hyatt does it best

  12. Last year 33 Hyatt nights for business, 11 for pleasure. This year 2 for business. That’s it. SPG, and Marriott, are my go-to’s now.

  13. I’m making Diamondist for 2018 and I am very happy that I won’t have to compete for suite upgrades, etc. with as many people. Suite upgrades + free breakfast on a couple of resort trips is very valuable, just as comp suites and club access on business trips.

    I’m not sure I will make it again next year, but I did this year and maybe they change the rules and grandfather me in for my hard work. I like the properties too.

  14. I did 100 Hyatt nights this year (and have more to go) while also maintaining Hilton diamond and getting SPG/Marriott via Amex Plat. The Hyatt properties are by far the best, but WOH was an utter disaster. And Hilton and Marriott are getting much better with new brands, refreshed hotels, digital key, etc. I have ridden it out this year, mostly because of my home property, but may not continue without changes.

    On the recognition side, I appreciate the suite upgrades that are spelled out clearer than Hilton, but I also find too many Hyatt properties play games with suites. Corner rooms are not suites! Late check out is nice, but why am I told at some properties that early check in carries a fee – either the room is ready or it isn’t, anything else is a game. And no check-in amenity anymore is poor form. The one I hate the most is that I can’t get a restaurant breakfast when Hilton and Marriott both offer that at Gold (not top) tiers. Hyatt clubs generally have weak offerings and to go out of my way to stay at Hyatt, at least make me wake up happy.

    On the rewards side, loss of check-in points was a big devaluation. Thousands of points gone from that. Free night awards – 90 day expiration’s almost removes the benefit. Award availability – please define a standard room as too many desirable hotels mysteriously have only a handful – again, if I have to use free night within 90 days, but no weekends have standard awards in that time frame.

    Hyatt is still well positioned with premium properties and points valuations that are attractive. But they need to provide a compelling reason for me to go out of my way to stay with the program. Everyone else is moving ahead…

  15. this was so predictable. from the beginning everyone knew this thing was a disaster. but hyatt went ahead anyway.
    my question is what kind of hallucinogen are they using at the office?

  16. I’m at 62 nights. I actually would have had much more but I moved stays to Marriott and Hilton because I wanted my category 1-7 to post later in the year because of the 120 day expiration. I think that one thing cost Hyatt much more than any breakage they hoped for by reducing the free night expiration by 66% in duration.

    My wish list would be:
    Acquire another brand of hotels to expand your footprint in Europe.

    Award nights should count towards status like spg.

    Their stay promos this year were practically non existent.

    Don’t do any diamond challenges where top tier status is freely given away with suite upgrades. That’s just stupid and makes the diamonds who pushed 60+ feel like idiots. If you want to change to a lower amount I’d suggest first try crediting award nights.

  17. 21 years in a row diamond, now a 22 year old kids who work for me make it. I don’t. Loyalty definitely is defined by a time element, but not for hyatt. Numerous emails to hyatt execs unanswered. Done with hyatt. Really sad. Bad leadership. Bye hyatt

  18. I was a Diamond for the past several years but walked away from trying to qualify for premium status with Hyatt when “World of Hyatt” happened. Once my Globalist status runs out at the end of February I will have no reason to stay with Hyatt at all. I used to drive out of my way to stay at Hyatt properties and would pretty easily get the 25 stays (and 40 or so nights) every year. The hassle of staying at an out of the way Hyatt was definitely worth it when my family and I were staying in a suite and eating breakfast in the club while on vacation. I am at only 16 nights year to date as 60 nights was totally out of reach. I figured I might as well get hotel rooms in the convenient locations. Next year my Hyatt stays will likely be half again of what they are this year. “World of Hyatt” is such a bummer. Even the name is lame. Hopefully they make changes that once again encourage loyalty to their brand.

  19. Was a diamond for 10 years. And then this stupid change to new names that sound stupid. And the increase in the number of nights that dropped me to explorist. Probably make globalist this year but this is going to be the last year I stay with HYATT if they don’t recognize long term loyal members. look at the Air France Package my friends. Once you hit the max for platinum any extra miles you earn that year to towards the next year and so on. Gives me no reason to fly with anyone else

  20. Lol down 70%. When will Hyatt finally admit WOH is a failure and reinstate Gold Passport?
    Maybe them customers will return.

  21. I agree with the many comments. I had quit commenting because Hyatt just wasn’t listening. I imagine a lot of others have as well. I had been a Hyatt Gold Passport member since the program started. I have been a diamond for many years. I have gone out of my way to stay at Hyatts. It felt like family. But the World of Hyatt program was wrongfully represented to be “listening to the members” to provide an “improved” program with better benefits. Instead tier levels became harder to reach and benefits were decreased. The internet conference in the spring with the roll out of World of Hyatt had numerous complaints but no one listened. The names are horrible but you could live with the horrible names if Hyatt had not destroyed a good program. If Hyatt wanted to reach out to reward and lure Starwood high end customers Hyatt could have left the existing program in place and added a tier that provided extra benefits for example free parking. But dont run off those loyal members staying 25 stays and 30 to 50 nights year after year. That’s what has happened. I am at 10 nights this year just because of left over globalist perks. I have reached status in several other brands this year and have stayed at a number of boutique hotels instead.
    It is promising that Hyatt maymake changes next year. But I am afraid it may be too late then. I would suggest just like they leaked out information on world of Hyatt early that Hyatt go ahead and let us know. That may go along way towards what I and others do the rest of the year. Bring back Hyatt Gold Passport. End World of Hyatt. Be honest with members- Hyatt made changes hoping to save money.

  22. World of Hyatt is more of a political message. That’s another problem. Either make the marketing more moderate or lose the politics altogether. The launch commercial was terrible.

  23. I would also like to add that for younger customers (generally speaking) the explorist tier is more attainable and practical; so the mid-tier is an improvement. I’d rather get club access and free nights (via reaching 30 nights and/or staying 5 brands) rather than reaching for 50 nights and suite upgrades.

    Marketing needs to stay away from politics and invest more to attract millenials.

  24. My problem with Hyatt is nearly every where I stay it’s a Hyatt Place or Hyatt House on offer. Those properties offer zero benefits no matter what tier you are. Maybe offer a F&B credit? I continue to stay with them as we love the Andaz line and their resorts are some of the best.

  25. I feel the therapeutic need to echo what so many others have said and chime in with some thoughts.

    After 4 years of diamond with Hyatt, I made the difficult decision to cut ties with Hyatt in 2017. I had a real struggle with it, but ultimately it was:

    1) Loss of point amenity at check in
    2) Terrible 120 day expiring free night certificates
    3) Obvious suite upgrade games we all knew would be played by individual hotels

    While I understand the 60 night qualifying change pissed off a lot of people, I didn’t mind it that much as I can make that work and less top tier should be theoretically better for me.

    I went from 80 Hyatt nights last year to 2 this year. I have complete freedom of hotel choices within a budget range when I travel (average 175 nights a year) so I pick and choose everything from Hyatt House and Place to full service Hyatt, to Hampton Inn and Doubletrees and full service Hilton to Holiday Inn Express to Residence Inn etc etc etc.

    Had I stuck wth Hyatt and done at least 60 nights, that is a bare minimum loss of 30,000 check in points and probably closer to 45,000 for me. With my personal travel habits, 120 day expiring certificates are a kick in the nuts. I go so much out of my way sometimes to stay at Hyatts and they spit in my face with an obvious marketing ploy to have those things expire?? Such a low low blow by them. Just give me 25,000 points for certain thresholds and let me decide how and when to use them. I often travel extensively from march to October and find time for personal travel in December and January – lot of good a certificate earned in July would do me.

    I may not have averaged $300/night at my Hyatt stays, but if they don’t want my $175/night for 80 nights then I gladly give them to Hilton and IHG and build and use my multi million points to travel the world with them.

    I hope someone from Hyatt loyalty reads this. I’d gladly come back with some changes. As it is now, I may have to go out of my way to burn some Hyatt points soon just to squeeze out the last few months of benefits.

  26. They thought most of their elite diamond members were suckers, and will suck it all up when they pushed upwards by many miles (i mean nights…), but it backfired on them big time.

    Those that went to SPG, will not turn back. Even Hilton feels better.

  27. They eliminated the benefits, we eliminated the loyalty.

    I simply cannot believe that this is a surprise to them. Business travelers are business people first: we all know how to use a spreadsheet. It’s not hard to calculate the value of a benefit: costs are known, and the idea of a “free” night is meaningless.

    Under the old program, before the devaluation of upgrades, it made sense for me to pay more to stay at a Hyatt. Without the benefits, it’s simply cheaper to buy what I need from someone else.

    I moved away: why would I bother to move back?

  28. I will make Globalist next year but it was not at all easy. I doubt I will make Globalist in 2019 as it is just too complicated to play. Not sure if it is the Hyatt hotels that I choose, but I have been scoring suite upgrades every time in the US and Asia especially. While I have no complaints with WOH, it was ironic that all the language change designed to appeal to the young simply backfired as most millennials appear to prefer AirBnB stays over hotel chains. Loyal members have other options to pursue.

  29. Having skimmed most of the comments, a few things stand out.

    @Jb – Any program where someone is Diamond for 21 years in a row…to not have Lifetime Status by that point is embarassing on Hyatt’s part. Even under the old program I thought the bar for Lifetime was too high. Throw out entitlement motivations, they just put it so far out there it’s not even worth consideration (and therefore can’t be driving behavior). I’m closing in on Lifetime status with SPG (and thus Marriott). They’ve received an outsized percent of my business over the last 3 years in part because of the Lifetime goal. Yes, I may get screwed depending on how Marriott ultimately merges the programs – but Hyatt Lifetime was never even a possibility.

    Agree on all the other posts about the Hyatt program being a mess. In the hopes that Hyatt representatives read and evaluate consumer commentary and perceptions on these blogs, I continue to share that I was on the verge of diving in with Hyatt when the program changes were announced. I’m downright giddy I didn’t invest a single penny in pursuing Hyatt. I’ve stayed at Hyatts out of necessity not preference, and having experienced their product I would love to see them correct this horrendous program. But until they do, they’re effectively asking me to give up all of the loyalty benefits I would get with the other programs I’m invested in to stay at their hotel and be told that I’m not “valuable enough” to Hyatt to experience those same loyalty benefits.

    Give up valuable benefits, progress towards Lifetime status, and rewards of staying with another brand so Hyatt can effectively look down their nose at me and tell me to “try harder” to earn their favor? Sorry Hyatt, whether my offense is real or imagined there’s just no aspect to that equation that makes sense.

  30. The comments on this article have been amazing to read and quite informative. I truly enjoy reading all the different scenarios of how people look at hyatts rewards program . My wife and I have been diamond members for 3 years and now globalist for one year and it has truly been a challenge to keep that status as we normally would stay 45 to 50 days per year and now they require us to stay 60 nights per year .We’re probably going to make the top tier one more time for next year and then they lower it to 55 nights for each consecutive year which is still an awful lot. The automatic suite upgrades throughout the year at almost every Regency and grand and even a couple of the nicest Hyatt places have been very nice . Some of the biggest complaints I have are the lack of benefits at Hyatt place and Hyatt house locations and the fact that the breakfast food at these locations most of the time is sub par and repetitive. The fact that we continue to pay $25-30 parking fees At so many locations. The expiration of free nights and the lack of stay credits on nights purchased with points and free nights. And the really big one this year was the fact that they didn’t have promotions there was a couple little ones but the fact that I missed out on 2 different 75000 point promotions that I did last year really changed the game . I’m generally not a huge complainer but Hyatt has to really be seeing a big difference if somebody like me has this many complaints . Mrmojo in colorado.

  31. I’ve been a Hyatt owner since 2005 & the recent changes concern me. They are attempting to get current owners to opt into their new points program by making them pay for more points. They are going after the low hanging fruit but it’s a complete disrespect for current members. I should be the last person to pay in order to participate in the new program. It’s a mistake that will cost them in their current owners & they will lose more in the end.

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