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I respectfully disagree with that last sentiment. I think the changes will be very bad for a lot of World of Hyatt members, and the numbers would appear to back me up.
It has been a little under two weeks since Hyatt dropped the news that alongside it’s usual annual hotel category changes it will be revamping its award chart. Generally speaking, the news has been taken badly, but some have tried to argue that the changes “may not be so bad”.
I respectfully disagree with that last sentiment. I think the changes will be very bad for a lot of World of Hyatt members, and the numbers would appear to back me up.
A quick recap
In April, Hyatt will push through its usual yearly award category changes and the way Hyatt’s public announcement has been phrased, it’s clear that we should expect considerably more properties to move up one or more categories than to move down.
That, however, is not the really bad news.
The really bad news is that at some point in May (no date has been given), the World of Hyatt award chart will change from offering three price points per hotel category to a rather incredible five price points per hotel category.
Instead of being offered off-peak, standard, and peak season pricing, World of Hyatt members will be offered “lowest“, “low“, “moderate“, “upper“, and “top” tier pricing and this will apply across all World of Hyatt hotel redemptions (standard rooms, club rooms, standard suites, and premium suites) and redemptions across the all-inclusive resorts as well.
On top of all this, the number of points needed for most bookings will also be changing. The number of points needed will be going up.
No new hotel categories will be introduced, but as you’ll see in a moment, that’s not really important because of how Hyatt is changing the pricing.
The numbers
When it comes to award chart changes, the numbers almost always tell us most of the story, so let’s take look at what’s on the way.
Let’s start off with the midpoint in both the old and new award chart.
If we compare the middle price point of the current award chart (standard season pricing) with the middle price point of the new award chart (moderate season pricing), this is what we get:
On average, the cost of an award night booked during the standard/moderate season will increase by 25.3% and the cost of a top-tier redemption will increase by 37.5%.
If we compare the top price point of the current award chart (peak season pricing) with the second-from-top price point of the new award chart (upper season pricing), this is what we get:
On average, there’s an increase of 25.9% here and the cost of a redemption at a top-tier property will increase by 44.4%.
And remember, this is a comparison between the highest cost possible under the old/current award chart with the second-highest cost possible in the new award chart.
The new award chart can get yet more expensive.
Speaking of more expensive …
Here’s what you get when you compare the top price point of the old/current award chart (peak season pricing) with the top price point of the new award chart (top season pricing):
On average, here we have an increase of 47.8% with the top-tier properties costing 66.7% more and the cost of redemptions in three other categories increasing by over 50%.
Ok. Some of you may now be thinking but what about the cheaper seasons? Well, let’s take a look at how pricing in those seasons is set to change.
If we compare the lowest price point of the current award chart (off-peak season pricing) with the second-from-bottom price point of the new award chart (low season pricing), this is what we get:
In this comparison, the average increase in the cost of an award night is 23.4% with properties in categories 1, 3, and 8 all seeing increases of over 28%.
Sure, you could say that this isn’t an entirely fair comparison as we’re looking at the cheapest pricing under the old award chart and only the second-cheapest pricing under the new award chart, so let’s see what we get when we compare cheapest with cheapest.
This what you get when you compare the bottom price point of the current award chart (off-peak season pricing) with the cheapest price point of the new award chart (lowest season pricing):
In this comparison, the news is a lot better, as we have five categories showing price decreases and three categories not changing at all.
The average decrease is 6.2% while it’s possible that we’ll see the cost of redemptions in three categories drop by over 11%.
Other things to note
Hyatt has said that these changes are being introduced to continue giving members a clear idea of how much redemptions will cost (i.e. they’re not phasing out the award charts) and it has said that because under the new award chart structure hotels will have a broader spectrum of award prices to use, there won’t have to be as many award category changes in future years.
Hyatt has also implied that while award pricing has, up until now, been set centrally, hotels will have a lot more control over award pricing going forward.
More importantly, pricing will not be set in stone 12-13 months in advance as they (mostly) have been so far. Going forward, properties will be able to change pricing if/when demand surges.
Thoughts
If you’re a fan of redeeming Hyatt points, these numbers don’t make pleasant viewing, but I’ve read some people saying that we can’t be sure how good or bad the changes will really be until we see on how many dates properties are priced at the lower and the higher price points.
That’s very true. At this point we can’t be 100% certain of very much. But we can use a bit of common sense to see what’s coming.
Firstly, it’s unlikely that properties which have been charging standard season pricing for large parts of previous years are suddenly going to start charging low/lowest prices for the same dates in coming years (where’s the incentive for them to do so?), so even if these properties map their current standard season dates to the new award chart’s moderate season dates, we’re going to see awards costing between 16.7% and 37.5% more.
Secondly, even the biggest optimist among us cannot possibly believe that on most dates where properties have been charging peak pricing (under the old chart) that they will charge anything less than upper pricing in the new chart (that’s the second highest level of pricing).
That means that during popular times, we should expect to see award prices costing, on average, at least 25.9% more than they do now, and at least 44.4% more than they do now at the more aspirational properties.
Sure, there may be a few properties at which one or two dates which were previously designated as peak season may now fall into moderate season, but the number of such dates is almost certainly going to be so insignificant as to be meaningless.
Thirdly, I know that some people are hoping that the introduction of “lowest season” pricing will mean that they’ll see the cost of some of their stays go down (see the “old off-peak season prices v new lowest season prices” table above), and yes, that may happen.
But how much of a “glass half full” person do you have to be to believe that the number of such nights will be significant?
At a very large number of Hyatt properties, the dates on which properties have historically offered the very cheapest pricing possible have been scarce, and there’s absolutely no reason to believe that this is going to change under the new award charts.
I have no doubt that there will be a few nights here and there priced at “lowest season” pricing, but history tells us to expect most of the cheapest nights to fall into “low season” pricing and that those nights won’t be easy to find at a lot of properties and at some, they won’t appear at all.
What does this mean?
Well, it means that even on some of the cheaper dates we should expect prices to increase, on average, by 23.4%.
These are all very significant increases, and while some will argue that this is offset (at least in part) by the fact that World of Hyatt members are now earning more points from their stays thanks to hotel price inflation, that misses the point.
Sure, if you’re playing the miles and points game with someone else’s money, you may not be as badly affected by these changes as the rest of us (because you’re raking in more points per night than you were 4 of 5 years ago and it’s not your money paying for the points), but you’re still not earning enough points to make up for a lot of these increases.
Does anyone really believe that they’re earning 50% -70% more points now than they were a few years ago on the same number (and type) of nights?
Those of us playing the game with our own money are facing significantly increased costs when we’re paying with cash (which means that our travel budgets no longer buy as as many nights away), and we’re now seeing significant increases in the cost of awards (which means that we’ll be able to afford fewer “free” nights), and none of that is good news.
Yes, as I suggested earlier, there may be one or two bright spots in the new award charts, but I fully expect to have to strain my eyes to find them and there’s simply no getting away from the fact that a lot of the properties in the World of Hyatt program have just been given the licence to significantly increase the cost of award nights, and you’d have to be quite naive not to think that most properties will grab this opportunity with both hands … especially as they are now being given more control over the cost of awards than ever before.
Bottom line
I’ve been digesting the news out of the World of Hyatt for a couple of weeks and reading what a lot of people have had to say about the changes that are coming, but whichever way I look at things, the realist in me sees a very big devaluation coming in May.
Sure, if you like living life as an eternal optimist you may want to believe that things won’t be too bad and that most properties won’t be using the leeway they’ve been given to spike the cost of award nights, but for your own sanity I suggest that you prepare to be disappointed.
Sure it means fewer bookings but Hyatt is just playing catch up to Hilton and Marriott. With increased room rates, higher travel demand and points inflation (due to large SUBs) this is to be expected. May not like it but it is reality. The Hyatt gravy train is over.