I hinted at the possibility of some good news when I wrote about Hyatt Gold Passport’s devaluation last week, but unfortunately I couldn’t say anything more at the time. You already know I’m not too disappointed about the award chart changes. Most were necessary and represent modest increases. If I took a soft approach, it’s because I already knew about Hyatt’s good news, which was announced last night. Like the new award chart, these rates will apply to stays for check-in on or after January 7, 2014.
Points + Cash Awards Offer Great Value
Hyatt has mimicked at least one aspect of the Starwood Preferred Guest award chart by introducing Points + Cash awards. In their defense, Starwood is not the only program with such a chart, but I do view Starwood as Hyatt’s most direct competitor. The ability to save some points by paying part of the rate in cash is a great way to offset last week’s increases to the cost of free award nights for the upper categories.
Since part of the rate is paid in cash, it makes sense that this cash portion will still earn Hyatt Gold Passport points. But I also confirmed with Hyatt that Points + Cash rates will be eligible to earn stay and night credit toward elite status! My biggest issue with Gold Passport has been that if I redeem points I’m not making progress toward status, so my account balance builds up and I end up paying some ridiculous rates when I approach the end of the year. Now, I can earn status on both paid and award nights.
Three features differentiate Points + Cash awards from traditional free night awards (all points). Points + Cash awards are capacity controlled, much like a saver-level award flight. Free night awards are not capacity controlled so long as a standard room is available, much like a standard-level award flight. So to save points, you may give up some flexibility in choosing your dates. The second difference is that traditional free night awards will still be ineligible for earning elite status. And the final difference is that you must call in to request availability and book these nights. It’s a major inconvenience, but hopefully a short-term problem as the website continues to improve.
Update: Jeff Zidell has confirmed that Points + Cash awards will qualify toward the Diamond trial (12 nights in 60 days for a fast track to Diamond status) and will be eligible for Diamond suite upgrades and promotional credit. As an existing Diamond member, this is great, and it is also good news for people like Amol who are thinking of applying for the trial.
How to Evaluate Points + Cash Awards
Hyatt’s Points + Cash award chart effectively values points at up to 2 cents each — you are “buying” points at up to 2 cents each to save those points already in your account. To save 15,000 points on a Category 7 booking, for example, you must pay $300. But as most people don’t value Hyatt’s points so richly, I think this is a bad deal. You should probably pay the full points amount if you think you can obtain more points later at a cost of less than 2 cents. Your desire for elite status will play a role in this decision.
|Hotel Category||Free Night Award||Points + Cash||Cost per Point Saved|
|1||5,000||2,500 + $50||2 cents|
|2||8,000||4,000 + $55||1.375 cents|
|3||12,000||6,000 + $75||1.25 cents|
|4||15,000||7,500 + $100||1.33 cents|
|5||20,000||10,000 + $125||1.25 cents|
|6||25,000||12,500 + $150||1.2 cents|
|7||30,000||15,000 + $300||2 cents|
Where Hyatt assigns a lower value to its points, I think Points + Cash can make good sense. Category 6 hotels like the Andaz Maui are normally 25,000 points as a free night award but only 12,500 points and $150 as a Points + Cash award. Work out the math, and this says Hyatt values the points at 1.2 cents each, less than my valuation of 1.5 cents. I would love to keep my own points in my account and pay only 1.2 cents each to cover half of my award.
Another way to look at it is that Hyatt’s math implies that the all-cash rate should be $300. In fact, many of these hotels cost $500 or more. Points redeemed for a Points + Cash award are inherently more valuable because they are elite qualifying and may be better compared to the cash rate than the traditional free night award. Assuming elite status is my goal (it is), I would much rather pay 12,500 points + $150 than all $500. Assuming I don’t care about status and want to preserve the value of my points at a level greater than 1.2 cents, then it might make more sense to pay 25,000 points.
Platinum and Diamond Members Get 20% Off
The second major change is that elite members of Hyatt Gold Passport will have access to special “My Elite” rates that offer a 20% discount off the daily rate for standard rooms. Like Cash + Points award nights, these will be capacity controlled.
I’m not sure how much this will affect my booking strategy. It’s nice to see that elites will receive some additional recognition for their loyalty. I actually think this alone goes a long way toward making up for last week’s changes. If award nights are going up 0-37% (depending on the category), surely it helps to give customers 20% off paid rates? Paying fewer dollars does mean you earn less points, but I’m not too concerned about that.
If I have any reservations about the My Elite rates, it’s that these are likely to be non-refundable rates. I dislike booking prepaid rates since my plans seem to be changing more and more often. AAA and Costco discounts allow me to save 10-20% already and often come with penalty-free cancellations 24 hours before arrival. And — so far — I have not faced many capacity issues with booking a AAA or Costco rate.
I think these program enhancements largely make up for the increased award chart levels. It’s nice to see discounts on paid rates. My Elite rates are an obvious effort to provide that, and because Points + Cash awards earn elite credit, the points are effectively another means of obtaining a cash discount.
The people who really lose here are those who earn most of their points not by staying at a Hyatt hotel but by earning those points through other means, principally credit card spend and transfers from other programs. They suffer from the higher award levels and don’t benefit from lower prices. Although they could pay the cash portion of a Points + Cash award to retain the value of their points, it probably isn’t worth it for all categories. Only a few, such as Categories 5 and 6, deserve some careful attention depending on the alternative daily rate.
Full details of the changes can be found in the FAQs posted on Hyatt’s website. On an unrelated note, but because some of you may be posting questions on Twitter, @HyattPR is officially changing its account to @HyattTweets today. (@HyattConcierge remains unchanged and is primarily concerned with addressing guests’ needs during a stay.)