Hyatt has just announced a pretty major devaluation to their Gold Passport program, whereby they’re adding a new hotel category and increasing many redemption costs. The new rates apply for reservations made on or after January 7, 2014.
Here’s their current Gold Passport award chart for stays booked through January 6, 2014:
Meanwhile here’s their new Gold Passport award chart for stays booked starting January 7, 2014:
Standard room redemption rate changes
The biggest hit to redemption rates comes in the form of the introduction of category seven, since the other rates aren’t going up by that much. As a matter of fact the rates for category one through four properties aren’t going up at all. The increases are as follows:
- Category one standard room rates remain the same
- Category two standard room rates remain the same
- Category three standard room rates remain the same
- Category four standard room rates remain the same
- Category five standard room rates go up by 2,000 points per night
- Category six standard room rates go up by 3,000 points per night
- Category seven standard room rates go up by 8,000 points per night (there wasn’t previously a category seven, so that’s in relation to previous category six rates)
Regency Club/Grand Club redemption rate changes
Redemption rates for Regency Club and Grand Club rooms have increased as follows:
- Category one club room rates remain the same
- Category two club room rates go up by 2,000 points per night
- Category three club room rates go up by 2,000 points per night
- Category four club room rates go up by 3,000 points per night
- Category five club room rates go up by 5,000 points per night
- Category six club room rates go up by 6,000 points per night
- Category seven club room rates go up by 12,000 points per night (there wasn’t previously a category seven, so that’s in relation to previous category six rates)
Suite redemption rate changes
One of the most attractive aspects of the Gold Passport program has long been the ability to redeem points for a suite at only a ~50% premium over the number of points required for a standard room. Unlike standard rooms you do have to redeem for a minimum of three nights in a suite, and that policy remains in place. Those rates are much more attractive than any other program out there.
Unfortunately suite rates are going up by quite a bit as well, especially for high category properties:
- Category one suite rates remain the same
- Category two suite rates go up by 1,000 points per night
- Category three suite rates go up by 2,000 points per night
- Category four suite rates go up by 1,000 points per night
- Category five suite rates go up by 5,000 points per night
- Category six suite rates go up by 7,000 points per night
- Category seven suite rates go up by 15,000 points per night (there wasn’t previously a category seven, so that’s in relation to previous category six rates)
The cost of room upgrades on paid stays is going up
In addition to increasing the number of points required for a free night redemption, Hyatt is also changing the way upgrades using points work on paid stays. Upgrades to a Regency Club or Grand Club room on paid nights will change from 3,000 points for up to a four night stay to 3,000 points per night. Upgrades to a suite on paid nights will change from 6,000 points for up to a four night stay to 6,000 points per night. That’s a pretty substantial devaluation, as the cost of a suite upgrade has potentially increased by 300%.
38 hotels are shifting categories
Only 38 hotels are shifting categories, with 21 hotels moving to a higher category and 17 hotels moving to a lower category. No hotels are shifting by more than one category.
Hyatt’s new category seven properties
Initially there will only be six hotels in category seven, as follows:
- Park Hyatt Beaver Creek
- Park Hyatt Milan
- Park Hyatt Paris Vendome
- Park Hyatt Sydney
- Park Hyatt Tokyo
- Park Hyatt Zurich
No real surprises there.
Hyatt Visa free anniversary night
It’s worth noting that the free anniversary night you get with the Hyatt Visa Card is only valid at up to category four properties. The following properties are going from category four to category five (meaning you will no longer be able to use the anniversary free night certificate at them):
- Andaz West Hollywood
- Hyatt Chicago Magnificent Mile
- Hyatt Place New York/Midtown South
- Park Hyatt Melbourne
Meanwhile the following properties are going from being a category five to being a category four, meaning you will now be able to redeem your Hyatt Visa free anniversary night here:
- Hyatt Capital Gate, Abu Dhabi
- Hyatt Regency Changbaishan
You have until January 6, 2014 to book under the old rates and until February 15, 2014 to modify reservations
As I said above, you still have a couple of months to book under the old rates. If the hotel you’re booking goes up in category the old rates will be honored until that date, while if you book a hotel that goes down in category, you’ll proactively be refunded the difference in points when the new rates kick in.
Furthermore, you’ll be able to modify reservations through February 15, 2014, and old rates will be honored. This means if you need to change dates or want to add or take off a night, the old rates will still be honored.
My thoughts on the devaluation
There’s no doubt it has been a tough year for loyalty programs. As the economy has continued to recover, it has become much more costly for loyalty programs to deliver on benefits.
Late last year and early this year were especially brutal for the hotel industry. We saw most of the major chains devaluing their award charts or ultimately increasing redemption costs:
- Hilton literally destroyed their award chart for high end redemptions by adding three new hotel categories and introducing seasonal pricing
- Marriott added a new hotel category, and 36% of properties went up in price
- Wyndham more than doubled the cost for redemptions at their top end properties
- Starwood made some 2013 hotel category changes, whereby less than 50 properties went down in price while over 200 properties went up in price, and also increased the cost of cash & points by 20-25%
- Priority Club introduced a nine category award chart, which resulted in many aspirational properties going up in price
The one program that didn’t devalue in the past year is Hyatt Gold Passport. All they did was adjust award categories, whereby more hotels went down in price than up in price.
When airlines adjust award chart costs it’s kind of tough to rationalize the price increases, especially when they’re extreme. For me that’s because airlines control both the award rates and award availability, so we basically get screwed by both of them (since usually not only are award rates going up, but the amount of award availability they release is going down).
For hotels it’s a bit different, and that’s why I can kind of rationalize “reasonable” price increases, as I described in this post:
During the recession most hotel loyalty programs introduced “no blackout dates” as a selling point of their programs, and that worked great at the time since hotel occupancy was extremely low, and the marginal cost of filling an extra room was very low.
But keep in mind that hotel chains run the hotel loyalty programs, while the individual hotels are typically franchises, and both have their own best interests in mind. Hotel loyalty programs want to make their loyalty programs as profitable as possible, while the hotels themselves want to make their individual properties as profitable as possible.
As a result, the arrangement that most hotels have with their loyalty programs is that if hotel occupancy is above a certain number (usually 90-95%) then the loyalty program has to reimburse the hotel at the average daily rate for an award reservation, while if it’s below that “magic number” they reimburse the hotel just slightly above the marginal cost.
As such, during the recession the hotel loyalty programs were typically only paying slightly above the marginal cost for award redemptions, while post-recession they’re often reimbursing the hotel at the exponentially more expensive average daily rate.
These changes totally suck for us, don’t get me wrong. They especially suck to those with tons of Chase Ultimate Rewards points, given that United MileagePlus just announced a huge devaluation last week. When that happened we could tell ourselves “well at least we can still redeem for Hyatt’s top properties at 22,000 points per night.” And now that’s not the case anymore.
As much as I’m frustrated by an increase in the number of points required at many properties, I can understand the reasoning. When you redeem your Hyatt Gold Passport points for the Park Hyatt Sydney over summer (which I’m sure tons of people do) and the hotel is near full occupancy, Gold Passport is literally paying the hotels near the average daily rate. So redeeming your 22,000 Gold Passport points will cost them $800+.
What do you guys think of the changes (other than them being bad, of course)? Will this cause you to change your hotel loyalty? In the meantime I’m off to book some stays at the Park Hyatts in Paris and Sydney. 😉