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Hyatt has historically differed from most of the world’s larger hotel chains in that it actually owns a significant number of properties in its portfolio. Bigger chains such as Marriott and Hilton sold off most of their ownership interests some time ago choosing simply to maintain long-term management or franchise agreements at the properties instead.
As of last year, however, Hyatt has been changing tack and the corporation confirmed (back in November 2017) that it would be pursuing an “asset light” strategy more like its immediate competitors.
Last year Hyatt sold off the Hyatt Regency in Scottsdale and now the corporation has announced the sale of three more properties….and all are well known.
Hyatt Hotels Corporation (NYSE: H) today announced that Hyatt has reached a definitive agreement with Host Hotels & Resorts (NYSE: HST) for the sale of the 301-room Andaz Maui at Wailea Resort, the 668-room Grand Hyatt San Francisco, and the 454-room Hyatt Regency Coconut Point Resort and Spa for approximately $1.0 billion. The sale reflects a blended EBITDA multiple of approximately 16x based on Hyatt’s 2018 pro-forma estimates. Hyatt will continue to manage the three hotels under long-term management agreements. The transaction is expected to close near the end of March 2018.
Grand Hyatt San Francisco (reviewed here)
As the Hyatt release says, all three properties will remain under Hyatt management contracts and so will all remain within the Hyatt portfolio and the World of Hyatt program….but that’s not what interests me here.
What interests me is the fact that one of these properties is where we have often seen World of Hyatt benefits incorrectly applied (or not applied at all) and where a whole new room category was created to circumvent World of Hyatt policy – welcome to the Andaz Maui.
I’ve shied away from the Andaz Maui since it opened (very late) in 2013 because of the ridiculous resort fees ($47/night) and mandatory valet parking ($35/night + tips) the property charges…. but there have been other reasons not to visit too.
Award night availability is tough to come by at the Andaz Maui and there is a reason for this that has nothing to do with the resort’s popularity.
The management at the Andaz Maui came up with a devious way to circumvent the World of Hyatt policy which says that, if a ‘standard room’ is available for cash bookings it must be available for award bookings too.
Andaz Maui – Image courtesy of Hyatt
This is what was done:
- A new ‘standard room’ category was created using a small number of undesirable rooms at the property
- The Andaz prices these rooms only slightly under what is charged for the real standard rooms (which are far more appealing) so they don’t often get booked by those paying with cash.
- These are the rooms that the property makes available for award nights.
Because there are so few of these rooms they’re usually quickly snapped up by these looking to use their Hyatt points and, because the true ‘standard rooms’ are no longer classified as such, no more award availability needs to be released – the hotel can “honestly” say it has complied with the World of Hyatt terms.
Sneaky isn’t it?
As well as the fun and games the Andaz plays with room inventory I’ve also heard stories about top-tier elites being refused suite upgrades when suites were still available, late check-outs not being offered and quite a bit more too
Andaz Maui – Image courtesy of Hyatt
The Andaz Maui isn’t the only hotel that plays games like this (The Hyatt Regency Aruba has done something similar recently HT: View From The Wing) but what has always made these underhand practices most surprising is that it came from a property owned by Hyatt.
Hyatt corporate has known about these practice for some time but has either not been able to do anything about them or has chosen to turn a blind eye – whichever it is it hasn’t been good news for Hyatt loyalists.
Now that the Andaz Maui will no longer be owned by Hyatt (but will still be managed by the chain) it’s possible that this practice may come under closer scrutiny. Also, if Hyatt corporate has been trying to make the Andaz play ball fairly with WoH members (but failing) the new management contract may give it the extra leverage it needs.
It’s genuinely funny to think that Hyatt corporate may be able to exercise more control over the Andaz Maui now that it will no longer own the property, but this may actually turn out to be the case….let’s hope so for the sake of all World of Hyatt members tired of seeing their benefits ignored.