Hyatt Gold Passport Award Chart Devaluation

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:

Hyatt-Gold-Passport-Old-Chart

Meanwhile here’s their new Gold Passport award chart for stays booked starting January 7, 2014:

Hyatt-Gold-Passport-New-Chart

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:

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. 😉

Comments

  1. Thanks for the info! I just talked my friends into getting Hyatt Visa cards to use at the Paris Vendome. I hope they can still get their 2 free nights by the time the cards arrive. It is dismaying to see how all of the points we work so hard to get are being devalued.

  2. @ Maja Berge — The two free nights earned with the sign-up bonus of the Chase Hyatt Visa should still be valid at all hotels, including category seven properties.

  3. For a long time, Hyatt advocates have stated how great the program is because there has not been a Gold Passport devaluation. There already was a major stealth devaluation with Hyatt no longer offering Faster Free Nights, putting an end to the Gx bonus offers, and gutting the Hyatt Stay certificates. Instead, Hyatt decided to offer bland bonus point offers equivalent to the old Gx bonus offers as their regular promotion around twice per year. Now we see a very real devaluation by Hyatt debasing the top properties by requiring almost a 50 percent rate increase. I gather they got their cue from Hilton and United.

  4. When you sign up for the Hyatt credit card you get 2 free nights in a regular room anywhere. Do you know if you can then use points to upgrade that room to a suite?

  5. My Discover Card and my Costco AMEX are looking better and better every day.

    Chase UR Points? We’ll see how opinions change.

    The one tiny positive I can see, and this is just me being a foolish optimist, is that the hotel and air currencies are now devalued to the point where perhaps Chase will begin to offer transfer bonuses.

    Nahhhh…

  6. I knew this was coming!!! You can read my comments on United devaluation and I said Hyatt was the next. It is clear that allowing people to stay at their top Park Hyatt for only 22k points was not sustainable. Too bad!!!!

  7. Pretty awful. I think we all saw it coming, but it’s the extremity that has shocked me most.

    I always thought the favourable redemptions were a good consolation for Hyatt being almost the only program not to upgrade Diamonds into Suites when available.

    Probably the end of my love affair with them…

  8. I have only been in this game for a couple of years. When the economy cratered in 2008 did loyalty programs change for the better or is this a one way ticket downhill for all of these loyalty programs?

  9. Maybe this is just the kick in the backside that I needed to finally plan that trip to Paris. I think I’ll be looking at the calendar and the Park Hyatt Paris Vendome website tomorrow.

  10. @ Dan — Actually surprisingly hotel programs improved a TON during the recession. It was only then that Hyatt introduced no blackout dates on redemptions, free internet, guaranteed late check-out, and confirmed suite upgrades. The hotel industry has made a lot of progress in the past several years.

  11. I hope Chase gets aggressive in adding another hotel and airline program, to the extent they can. I wonder how exclusive the SPG and HHonors arrangements currently are. I’m pretty sure the US deal with Barclays isn’t exclusive, either.

  12. @ Ed — My impression is that Delta and Starwood are pretty tied up with American Express, though other than that most other programs seem to be fair game (for example, Hilton has a card with both Citi and American Express, British Airways partners with Chase and American Express, etc.).

  13. Lucky,
    No matter how much you and the other bloggers sugarcoat it,
    the end is nigh for the cards you are pushing for those who can think, as the value proposition is shifting.

    I have a Fidelity 2% cash back card on EVERYTHING that I will dust off and use much more.
    I will also get rid of a lot of these cards unless they still have specific value. That is getting harder to find.

  14. @ ffi — I don’t disagree at all that the value proposition of the game is constantly changing, and that right now it’s not looking especially good for major points currencies.

    But I also believe that there’s some level of equilibrium that will be maintained for these programs. Remember that these credit cards are *HUGE* business for airlines and hotel chains, and if the value proposition isn’t there for cardmembers then that business will disappear.

    The fact is that if they can’t sell us points-obsessed people on their credit cards then they won’t be able to sell others on it as well.

    This isn’t the first such devaluation we’ve seen, both on the hotel front or on the airline front. I remember many similar devaluations even five years ago, but the game has gone on.

    It seems like the “game” follows the same pattern every time — the points currencies start lucrative, they get devalued somewhat, the airlines, hotels, and credit card companies make it easier to earn points so we come out ahead, and then they devalue the programs as well.

    Seven years ago there was no such thing as a card that accrued 5x points. There was no such thing as a 50K credit card sign-up bonus.

    I’m confident the value proposition will return, not just for our sake, but for the sake of the airlines and hotel chains.

  15. Only when the economy craters will the programs again be generous.
    They survived on the extra loyalty and now when things are improving, they will squeeze that loyalty out of you. They do not need you now.

  16. Can I just book the Sydney Hyatt speculatively for X date and then change the date later? Or will that incur a charge/change the rate?

  17. The park hyatts at 22,000 pts per night were a pretty ridiculously good deal, especially with how easy it is to accrue UR.

  18. I will have a post on this in the morning…I think we all saw it coming, which makes this easier. It’s nice to know that their low level redemptions didn’t change. I’m upset that it becomes more difficult to find a great redemption in NYC though!

  19. Funny how both United and Hyatt time this. Obviously in bed together. Hopefully, cc customers, both Hyatt and Sapphire will complain to Chase. Surely this has some impact…

  20. @ Justin — Found that surprising as well. My guess is that the hotel probably rarely gets above 90% occupancy, so while the revenue rate is high, Gold Passport probably doesn’t have to shell out all that much for stays there.

  21. Ben, so how do you value UR points now?

    Also, is there a Hyatt small business card that gives 2 free nights?
    Thank you.

  22. The part that hurts the most is the upgrade a paid stay with points.
    As a non-diamond, it was my favorite way to stay at Hyatt.

  23. Whew!!!

    I cursed at Hyatt and other CEOs too soon. Normally I stay at categories 3-5. I guess Hyatt is still a good program to me and your explanation is very accurate. Airlines are just greedy but hotel co have a business model to run and cant survive when these reimbursements occur frequently.

    So Hyatt I dodged the bullet this time!

  24. Could see this one coming a mile away, or at least almost a year ago and I am fairly new to the game. Stings, though. 2013 continues to be know to me as the bloodbath. Good thing I already will be in Australia in January. Just booked 2 more nights at the Park Hyatt Sydney. #BurnBabyBurn

  25. @Lucky
    “The fact is that if they can’t sell us points-obsessed people on their credit cards then they won’t be able to sell others on it as well.”
    You are so wrong. The vast majority of people getting the cards never dreamt of redeeming miles for F, they use them to fly their families in economy to primarily domestic vacation destinations. The UA devaluation basically hits one group and one group alone – points obsessed people, who make up a sliver Chase’s CC business.
    Hyatt’s devaluation isn’t too bad, a few thousand points isn’t that big a deal. All these devaluations are being blown way out of proportion. I would bet that every single person who redeems for intl F and Hyatt cat 6+ could leave Chase today and the decrease in business would be negligible at best.

  26. @ Lantean — I’ll have a post on what I value Ultimate Rewards points at now today. Hyatt doesn’t have a small business credit card, unfortunately.

  27. @ mike — Indeed. On one hand surprising, though probably because the hotel rarely gets above 90% occupancy, so while the revenue rate is high, Gold Passport probably doesn’t have to shell out all that much for stays there.

  28. This actually seems pretty reasonable to me, all in all. If only the recent UA or Hilton devaluation were on a similar level.

    Ultimately, still seems like there are lots of good values out there.

  29. As a newly minted Diamond member, I am dismayed by these changes, but I have to agree with kris and ffi about the future of these programs. With the economy gradually improving, hotel and airline loyalty programs are realizing that they have been too generous with bonuses, status, and credit cards. Paid business travel is improving a ton, meaning more paid F/J and more business travelers paying for high-end hotels. Hyatt, Hilton, Delta, United…they are ALL chasing customers who are not like us in the slightest, those who have money (theirs or their company’s) and will spend it for a great (flight/hotel) experience without giving any consideration to the chain’s loyalty program. As much as we are a vocal and passionate subset of the flying public, we are not the bread-and-butter of hotel chains and airlines, and I would even argue that we are (in many cases) a thorn in their sides.

    Mark my word…US Airways will be next. 90k miles to North Asia with a stop in Europe really is too good to be true.

  30. No status with Hyatt. Which is the better hotel to stay as far as location and room: Hyatt Sydney, Paris or Tokyo?

  31. hotels, sorry to say, ain’t that great. Get out and experience the world beyond your “first class” bubble–lol..Idiots..lol

    You must leave the plane–or your hotel room–chant it–it will help you

  32. @Buddha

    Please be nice, I don’t think Buddha would be so mean… but I kinda agree with your point.

    I see the flight somewhere as the necessary evil (since there is no other way) so I focus on collecting miles to make the flight as bearable as possible. Once I am at my destination I would actually prefer to sleep in a tent.
    I collect the hotel points just for an occasional airport hotel or when I am traveling somewhere and need to stay in a particular city.

    But yes, it’s all about the destination and what you do there. I never spend more than 9 hours (that includes sleep) a day in the hotel room when I am on vacation.

  33. @lucky – I totally agree with your comment re the vicious circle of more points being issued, therefore inflation, therefore devaluation, therefore more bonus points/higher points earning. Except the the key bit of increased earning pretty much only applies in all cases to US-based credit cards. So those of us in the rest of the world are stuck with the devaluation and increased spend requirements with no chance to earn more points. We’re lucky to get much above 2 points per GBP in ANY programme, so the 5pts per USD rate would be great for us, never mind the even higher earnings rates!

  34. @Ed,
    Chase has too many hotel or airline cards that become a bottleneck. I already have 4 chase cards and each time I have to cancel one to apply for a new one. I wish hotels or airlines should diversify their card issuers to those with less travel cards such as US Bank or Bank of America.

  35. Lucky,

    You a bit off on your airline assessment. A carrier controls capacity on its own brand, and not its partners. So if UA is paying way too much to LH for F redemptions, the only thing UA can do I jack up the award cost. Or street block I guess.

    Personally, I prefer the “any standard room” philosophy that the hotels have introduced. It’s nice to though that if I’ve been able to make the flights work far enough out, that I won’t have to worry about hotel availability.

    As I posted in VFW, I’m not in a position to complain. I do almost no revenue stays or flights, so all of the wonderful nearly free experiences I’ve had, I owe to the credit cards. And for that, i gotta roll with the punches.

  36. @chitownflyer,
    I totally agree with you. Marriott keeps offering free night certificates for every 2 stays since 2010. That is why I never went for hyatt diamond status.

    Btw, I have hyatt plat status (through mlife) who has no free breakfast, so I treat hyatt plat as marriott silver.

  37. @Lucky,
    One of the major reason I am considering hyatt diamond challenge is to earn MGM Resorts free nights for my family’s future Las Vegas trip.

    Question:
    1. When I stay in Hyatt, I can not earn both Hyatt points and MGM Resorts points. I meant, I can earn one not both, am I right?
    2. Do hyatt reward stays count as elite status?

  38. I’ve been waiting for the PH Vienna to open. This will now cost more points per night even before you can book a few nights. Hilfe!

  39. After all of the prior devaluations I feel as if this one is fair and justified. The biggest sting to me is the category 7 going from 22K to 30K. I’m not bothered by suite night upgrades as in all honesty, I don’t spend that much time in a room on my vacations. Also the creep up of four properties from category 4 to 5 isn’t ideal but understandable and still plenty of nice properties available for the annual free stay. Otherwise ~10% increases for categories 5 and 6 isn’t too bad at all, especially given the fact that not that many properties increased categories.

    Another good thing is that outside of the category 7 hotels (of which there are only 6) there’s probably not going to be a mad rush to make award bookings for standard rooms since the increase isn’t significant enough for people to want to empty out their account balances. Hopefully this results in good availability at all but those six properties.

  40. Our family of four are planning a London/Paris trip next summer and I’m finding it extremely hard to find a room for four on points, or a room for four in general. I’m thinking it’s a better deal to pay 44k points per night for 2 rooms at the Vendome rather than 100k points per night for 2 rooms at a Radisson Blu.

  41. The Hyatt Place NY Midtown South was the only category 4 hotel in Manhattan. It is now a 5, so can no longer be used for the annual free night. Nothing has changed about this decent but unimpressive hotel to justify a 5.

    The point increase in various categories is simply a way to make the loyalty program less attractive, and certainly should have people looking for better hotel programs.

  42. Lucky,
    How many people have to disagree with your blind optimism before you listen?

    As someone with over 500k of lifetime points I am shocked as to how many hotels have gone up a tier and how much each tier has gone up.

    Can you point me to where publish any feedback you have recieved that was positive about the changes and how they improved Hyatt customer experience or Brand?

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