Will Hyatt Bring Back My Elite Rate In 2015?

Hyatt Gold Passport made some changes at the beginning of the year, which were both positive and negative.

First Hyatt announced an award chart devaluation, which was substantial though justifiable, in my opinion. We saw the introduction of Category 7 properties, whereby six of Hyatt’s most expensive properties went from costing 22,000 points per night to 30,000 points per night; other levels weren’t impacted quite as much.

Hyatt-Gold-Passport-New-Chart

The following week Hyatt announced some positive changes to the Gold Passport program, though, which in my opinion outweighed the devaluation. The two most positive changes were:

  • The introduction of Points + Cash, whereby you can redeem part points and part cash for an award redemption. The best part is that unlike with free night redemptions, Points + Cash bookings qualify as paid stays for the purposes of elite credit, promotions, and Diamond Suite Upgrade Awards.
  • The introduction of My Elite Rate, whereby hotels in many cases offer Diamond and Platinum members 20% discounts off the Hyatt Daily Rate. Ultimately it’s capacity controlled, and as is the case with anything in the hotel industry, some hotels are more generous with making it available than others.

Hyatt-My-Elite-Rate

What’s especially interesting about My Elite Rate is that it wasn’t introduced as a permanent benefit. From the beginning Hyatt said it would be available for 2014, so you won’t find it available at hotels in 2015.

Hyatt-My-Elite-Rate-1

With that in mind…

Will Hyatt’s My Elite Rate continue into 2015?

I’ve found the introduction of the My Elite Rate benefit to be fascinating from the beginning. And it’s actually kind of a gutsy offering, in my opinion.

Loyalty programs love metrics. But my guess is that it’s really tough to quantify whether or not they’re making or losing money off of My Elite Rate. In other words, you can see how many guests are booking My Elite Rate, though it’s tough to figure out whether they would have made those bookings anyway (and therefore you’re just “losing” 20%), or if they wouldn’t have stayed with Hyatt otherwise.

Furthermore, let’s keep in mind that on a per transaction basis elite members are less profitable than non-elite members, all else being equal. We get free wifi, late check-out, upgrades, club lounge access, breakfast, etc. Don’t get me wrong, we’re collectively much more valuable customers due to the volume of business we bring them — a Starwood VP recently said that 2% of their customers generate 30% of their profits.

But there is something interesting about offering a discount for being an elite member, on top of all the other regular elite benefits.

Generating incremental business or cannibalizing business?

This is probably the big question that the bean counters at Hyatt are understandably trying to figure out. Is My Elite Rate generating incremental business (are people booking at Hyatt specifically because of this rate), or are they cannibalizing their own business (who doesn’t want to pay 20% less than they otherwise would have?).

My experience with My Elite Rate

I’ve used My Elite Rate a ton since it was introduced earlier in the year. And I can honestly say that in many cases I wouldn’t have otherwise stayed at a Hyatt. In many cases a Hyatt property was more expensive than a comparable Starwood property, but by the time you factor in the 20% discount, they were comparable in price, or in some cases Hyatt was even cheaper.

In my case it definitely is generating incremental business.

Bottom line

We don’t yet know whether My Elite Rate will return in 2015. It’s anyone’s guess. If I were a betting man I’d go with no, given how well hotels are doing, with high occupancy and yields.

It’s something that certainly adds a lot of value to my stays and does build incremental business, but at the same time if I ran Hyatt I’m not sure how I’d be able to justify offering it.

How about you? What has been your experience with Hyatt’s My Elite Rate? Has it caused you to give additional business to Hyatt, or do you just view at as a discount compared to what you’d otherwise pay?

Comments

  1. I always thought it had more todo with incentivizing people who were already loyal to Hyatt to book on their website instead of through a third party and that the additional savings of not passing on a commission would make up for the lower rate.

  2. I loved getting the “elite rate”, but I have to tell you that lately I’ve just not been seeing it show up as a rate option when I search Hyatt for reservations. Senior/AARP rates show up, and so does the corporate rate I’m allowed to use, but “my elite rate” has simply vanished. I checked with Gold Passport to make sure there wasn’t some sort of glitch with my GP account and there wasn’t. It turns out, that in addition to capacity controls, individual properties can “opt out” of offering the rate even if “capacity” is not an issue. Since the absence of the rate has occurred for me over the entire spectrum of properties, ranging from Hyatt Houses to Park Hyatts, I have to assume that the Hyatts I tend to frequent have made a business decision to “opt out” because they see it as cannibalizing sales to a greater extent than simply offering the other rate discounts.

    Does the elite rate influence my decision making process about which chain I’ll book all other things being equal – yes but only in the sense that it acts as a “tie-breaker”. Will Hyatt renew the rate? Probably – given that individual properties can opt in and out as they often as they desire, renewing the rate offering again has no real business downside at the corporate branding level. That said, absent a given property’s need to put “bodies in beds”, I still think seeing it offered often as a reservation option will continue to diminish over time.

  3. I think the introduction of the MY ELITE RATE, as well as POINTS PLUS CASH was likely the determining factor to move me from loyalty with another chain to Hyatt in 2014! Without meaning to sound threatening, removal or reduction of these will revert my behavior (likely).

    These programs made it difficult for me to simply say price was the bottom line and look at other chains, as well as the wholesale and name-your-price options. Hyatt is not the largest chain, and I hope they look at these innovative programs to build loyalty and fans to keep the momentum going. Like you stated or implied Lucky, I think the MY ELITE RATE likely caused me a few times to pay even MORE than other chains net price because of the special treatment offered to me through this benefit. In the end, I must have been happy to pay it. Call it “perceived savings.” Real or simply perceived it created a value proposition that changed my behavior.

  4. I’ve used it quite a bit. It’s always been lower than any special rate I can find anywhere else online.

  5. Lucky, speaking of devaluations, any thoughts on Air Canada rouge? I know that you’re more of a premium flyer, but thought you may have some comments on their change.

    If you try booking a flight on aircanada.com on one of the rouge routes (for example, San Diego, Orlando, etc), it shows you the rouge flights mixed in. Prices are the same as “normal” AC flights (or WestJet), but it lets you know to check a website for the differences between it and AC: http://www.aircanada.com/rouge/en/flying_with_us.html.

    Looks awesome doesn’t it?
    – Generous baggage allowance (zero. Unless you pay for it of course)
    – Entertainment. On your own device (zero. Unless you pay for it of course. No power at seats for your device)
    – “Stylish interior”. (29″ of seat pitch. No video)

    Massive case of bait and switch in my humble opinion. You pay the premium for AC and get stuck with a super budget airline where they nickel and dime you for everything.

  6. I’ve used it for every one of my stays at a Hyatt this year. I’m plat with Hyatt so I don’t see much in the way of benefits besides the wifi, so this elite rate is a big deal for me. The only times I’ve booked away from Hilton, where I’m Gold, is when the My Elite Rate was available and was a better deal. I would hesitate to book a Hyatt as a plat unless it was the absolute best overall offering.

  7. Given that I find Hyatt properties to be somewhat overpriced compared to SPG hotels (at least, based in my very limited experience), My Elite Rate makes a huge difference once you’ve reached a certain level/tier for the year and are no longer concerned about requalification*. Just like KahunnaTravel I’ve seen very spotty availability, so I believe they will keep it going for 2015 to trump as an incentive — since properties can opt-out, there’s no harm.

    * — this may also be an important factor if you are both Hyatt Diamond and SPG Platinum 25 stays. With SPG, you get extra perks for moving up to 25 stays->50 nights->75 nights->100 nights but with Hyatt there’s no extra incentive to give them business.

  8. They’ve gotten thousands of dollars they wouldn’t have otherwise gotten from me. Hoping it continues; would be win-win for us both.

  9. Before I became Diamond, I used AAA rate. AAA often includes breakfast, so it can be much better than the My Elite Rate for a Platinum. For the rest of the great un-status-ed masses, of which I am frequently a member, it’s the only hope.

    Just like Joe said, it’s a win-win. They have comped me a couple fried eggs and bacon or a $28 buffet breakfast and gotten thousands of dollars in bookings that used to go to another chain. Every so often, I slide into a Park Hyatt and reap the benefits of cash+points or suite upgrades, and vow that I will never sleep anywhere else.

    I really love the program and hope they don’t mess it up.

  10. They might have to debate on a final decision. The warming economy provides them with less incentive to continue while they seem to have overcharged the properties at the same time compared with Starwood.

  11. When I was booking a hotel in Napa, I got the Andaz at a My Elite rate which beat out the Westin. So I chose Andaz. Too bad they just sent me email today canceling my reservation (mid-Nov) because repairs are still on going due to the earthquake.

    I don’t see why they wouldn’t keep it if the hotels can control capacity.

  12. @ AdamH — Except they already have a best rate guarantee and in most cases don’t credit points if you book through an OTA.

  13. @ RS — Yep, that’s the norm in the industry nowadays. Cut benefits and justify it by telling people it’s an “a la carte” pricing model so they just pay for what they use. What they leave out is that they’re charging the same for the basic service that they charged for the premium service in the past.

  14. It’s definitely been helpful to me. I was just in Japan and one of the reasons Hyatt got so much of my business in Tokyo was because the elite rate made it extremely competitive, even with local non-chain hotels.

  15. The Hyatt elite rate makes a big difference for me in booking Hyatt as does the points plus cash which works for suite upgrades. I agree that not all hotels have the elite rate and you can’t book it with the Hyatt mobile app that is now being promoted.
    I was very happy with these changes made in January and would be very disappointed if they cancelled them.

  16. for me it is
    1) incentive to book on hyatt.com
    2) it is a incentive for me to book more hyatt nights. For instance I needed a hotel for 21 days in Tampa, and due to the $120 elite rate, I did book the Grand Hyatt. I may have booked a slightly cheaper hotel, but this rate was a no brainer.
    Would be nice if they continue in 2015.

  17. I maintain elite level in the HHonors program as well as Hyatt. I much prefer Hyatt, but need HHonors for the “footprint”. Many things to consider, but as a rule I’m willing to pay slightly more for Hyatt. Unfortunately, the price spread between the only Hyatt in town, compared with the choice of multiple (and closer to where I need to be) HHonors properties, has me choosing HHonors many times.

    But I know there have been many times where the My Elite Rate (MER) was closed the price gap to the point that Hyatt made the sale. As I come into the final quarter of 2014, I’m already requalified for Hyatt Diamond and will be breaking my 18 year stretch of HHonors Diamond. As I said, many factors at play here, but MER is definitely one of them.

    @Silver springer : the MER is bookable on the Hyatt app.

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