Hyatt Raises, Lowers Prices for Free Nights

I got a call yesterday from Jeff Zidell, chief of Hyatt’s Gold Passport program.

The call was unexpected and Zidell is a busy guy, so I knew that there was bad news to be communicated, probably a policy change that Hyatt wanted to put into a more favorable perspective.

What’s changing is the Hyatt Gold Passport award chart.

Effective June 4, Hyatt will require more points for award nights at 89 properties, and fewer points for award stays at 65 properties.

Of the hotels being priced higher, 20 will be placed into an altogether new award tier, Category 6, which will cost 22,000 points per night.

The Hyatt portfolio includes around 424 hotels, so the change amounts to an award price increase in 21 percent of its properties, and a decrease in 15 percent of its hotels.

The net effect, obviously, is modestly negative.

I asked Zidell the same question I put to Hilton following its recent award-chart changes: With travel down across the board—and both occupancy rates and room rates depressed—is this the right time to be making changes that, on balance, negatively affect the value of Gold Passport points?

In response, Zidell pointed to the fact that Hyatt hadn’t modified its award chart in more than three years. Perhaps more importantly, he alluded to Hyatt’s long-term view of the program, arguing that such recent program enhancements as the elimination of award blackouts increased Gold Passport’s value.

The specifics of Hyatt’s changes aside, such “adjustments” are troubling to travel consumers. And they should be. The long-term trend is decidedly in the direction of charging more for award nights, which makes points less valuable.

And it’s not only points earned in the future that will have less value. With such award chart changes, points that loyalty program members may have spent years accumulating are suddenly stripped of some of their value—value that consumers assumed would be retained when they first signed up to participate in a program. So there’s a natural feeling that an implicit promise has been broken.

Of course, loyalty programs reserve for themselves the right to modify the schemes whenever and however they choose, so consumers have no legal basis for complaint. At the end of the day, the only constraint on travel suppliers’ ability to devalue their programs is pressure from their members.

These are, after all, loyalty programs. And if consumers don’t feel their loyalty is sufficiently appreciated in one program, they’re free to earn their points elsewhere.