My recent stay at the Park Hyatt Vendome in Paris — where I had one of the absolute very best breakfasts of my life (that segment of the trip report is coming) — really crystalized in my mind the value of hotel elite status.
I still love my lemon poppyseed pancakes at the Andaz 5th Avenue but the American breakfast at the Park Hyatt runs to 49 euros per person. And the amazing thing is that it wasn’t just expensive, it was probably actually worth that.
So I sat in my hotel, one of the better properties in one of the more expensive cities in the world. And I ate my 49 euro breakfast, of course a Hyatt Diamond is entitled to full breakfast for up to 4 registered guests in the room. And on the 3 nights where the hotel was actually sold out Gold Passport was reimbursing the property 800 euros per night for my room.
And I said to myself that hotel elite status can be really valuable.
But just how valuable, and at what cost?
So I played with a little spreadsheet this afternoon to try to answer that question for myself. Everyone’s numbers are going to be different, based on their travel patterns and their redemption behavior — and what they actually subjectively value things at (a hotel breakfast might cost $20, but you might not be willing to pay $20 for it — if it wasn’t free you’d go down the street — so you shouldn’t value it at $20).
Nonetheless, I’ve made a few assumptions that I don’t think are entirely unreasonable. And I’ve even left out some of the benefits of status entirely, on purpose, to keep the estimates fairly conservative.
I used Hyatt Gold Passport for this illustration, since it’s the program whosse points I was using at that Paris hotel. But we can substitute other programs and come up with answers as well in a similar fashion (I suspect the value will be lower in some programs — the benefits of Starwood are great but in-hotel earn is weaker, the benefits of Priority Club and Marriott Rewards aren’t as generous). See what you think.
I’m assuming that a top tier elite makes that status on 50 nights at an average room rate of $135 per night, which for a top tier elite is probably low. The rate and number of stays matter of course for how many points are earned.
I assume that the stays all earn a points check-in amenity, and that a quarter of the time they have to be posted manually (earning 500 more points each of those 4 tiems). But that isn’t necessary, those manual postings and two of the Diamond amenities could be foregone and still generate the same 3 night category 6 redemption at a property like the Park Hyatt Vendome.
I value internet and breakfast, I think, conservatively. For instance I assume that breakfast is taken only 60% of the time on paid stays, and for one person only, and never at a value above $20. I also place what I believe is a very modest value on suite upgrades.
And here’s what I leave out entirely:
- Points earned via credit card for the hotel spend
- Any value for 4pm late checkout
- Any value non-confirmed upgrades (better room at check-in when not confirming a suite)
- Any value for club lounge/evening appetizers and cocktails
That’s why I think my estimates are subjectively reasonable, though different folks will value these things differently.
And I come out with $6750 in hotel spending for the year generating $5271 or a 78% rebate in Diamond benefits.
You can make your own spreadsheet based on how you value the points. You might never pay for a hotel like the Park Hyatt Paris and thus should discount the redemption value of the room. But even if you dropped the value of the redemptions in half, you’d still be getting an effective 60% rebate on your hotel stays — while still leaving out the value of several benefits received during the year.
My takeaway is simply this: loyalty has real value for folks that are able to concentrate on a chain and stay frequently enough to earn top tier status. It’s probably more valuable than you thought.
A good approach but I would apply a much lower subjective value (as you rightly pointed out for breakfast) to free reward nights.
@Jason you can build your own spreadsheet, maybe add back in some of the things I’ve excluded that you value, and figure out the right number given your own valuations.
I think this is helpful when considering loyalty vs booking whatever via an OTA or compare against Priceline/Hotwire.
You did not value the earned points which would enhance your “Diamond Rebate” further.
Thank you for the great analysis.
My problem with your calculations is that you mention that you’re only including things you’d have paid for anyway. I don’t know about you, but if I didn’t get free internet and breakfast through status, I’d make a much higher percentage of my personal stays at Hyatt Places, Hampton Inns and Springhill Suites to make sure I still get those things. The rooms in a newly built or renovated limited service can often be nicer than a few-years-old Hyatt, Marriott or Hilton.
This is an interesting analysis. I think it’s worth pointing out that since the value you compute includes benefits from your stays (e.g. free internet), that the value would be reduced if you do mattress runs to get status. During a mattress run you’re unlikely to need or want breakfast, internet, etc. Also, for those who get reimbursed for most of their travel, some of these benefits slightly subtract value (you get fewer points when you don’t pay for internet, breakfast, etc).
Gary, is there any way to earn Hyatt Diamond vs. actual on-sight stays/nights? I’m using the Hyatt credit card two-night voucher later this year at Park Hyatt Tokyo and really, really want that Diamond breakfast!
@Jeff spending on the Hyatt credit card can generate stays and nights — although it’s pricey. $20k spend gets 2 stays and 5 nights towards status; $40k spend gets 5 stays and 10 nights towards status. (That means an incremental 3 stays and 5 nights with the second $20k spend)
@Kalboz – I valued the free nights generated from the earned points
Great analysis. Tight post. Valued added….your core competency. Bravo.
The only flaw I see with the above is that the average Hyatt member doesn’t have 70,000 points in their account. I’d love you to do a poll to find the answer to this question.
Your analysis is aimed at the very high-end Hyatt customer. It’s also aimed at those of us that are living large thanks to your post!
I’ll agree, very interesting analysis.
I’d calculate the “rebate” differently. Instead of subtracting the value from the spend, I’d *add* the value to the spend, and calculate from there. That is, you get $6750 worth of hotel rooms plus $5271 worth of extras, for total value received of $12,021. You paid $6750, so the rate paid is $6750 divided by $12,021, or 56%, reflecting a 44% discount.
The overall point reflected in your post title is valid either way.
I’d be interested in seeing a comparison analysis for top tier elites in SPG, Marriott, and Hilton, and how those benefits stack up, dollar-wise.
@Dan- I am not high end but thanks to Gary and others my wife and I experienced th Vendome last Feb. Being diamond got us the fabulous breakfast and Internet….we didn’t have to go to McDonald’s to get coffee and free Internet……BRT 13 yet???
I agree the avg Hyatt customer doesnt have 70k pts in their acct but I wonder if the avg Ink or Ink Plus customer has 70k pts in their acct?
To me, the value of hotel elite status is the ability to enjoy pleasurable add-ons at a nice hotel which otherwise make no economic sense to purchase. Like the good 49 euro breakfast; very enjoyable, but my wife and I aren’t going to buy a $130 hotel breakfast for 2.
I actually tend to avoid the 4-star int’l hotel chains for personal travel UNLESS I can get some of these valuable perks; club access, breakfast, etc. I find it unpleasant to stay at a fancy hotel where my personal “value meter” tells me I should buy nothing at the hotel and have to stick to “room only.” And to get the valuable perks thrown in — which makes staying at these hotels worthwhile — you usually need elite status. Without the perks, the major upscale chains generally provide poor value for money and you are better off staying at independent hotels which are more like to include these additional services.
Too bad airline status isnt as valuable.
I don’t value suites much at all. Just a bigger room. You should be out exploring Paris! Huatt diamond challenge is worth it. 12 nights for 60 days. I would not say 50 nights would be worth it unless somebody is paying for it.
How did you find out that hotel was being reimbursed 800 Euros per award night when the hotel was sold out during your stay?
The ADR for most of that hotel’s sold out nights a few years ago were said to be well below 800EUR and that was when the Eurozone economies were doing better than now. If the figure is now up to 800EUR/room night, then: “Oh la la! Vive la France!”
@GUWonder I emailed the hotel for a copy of my folio and they mistakenly sent me the billing to gold passport.
I earned diamond Hyatt through a status match last year and then got the credit card to earn the 2 free nights. I used those to stay at the Park Hyatt in Sydney on a recent vacation and was upgraded to a room just below suite level (they do not allow suites as part of the deal at that hotel) with a perfect view of the opera house and double balcony, etc…
The point of this post is the breakfast – it was by far the best breakfast I have ever experienced, though admittedly I am not a foodie and don’t seek out luxury meals at hotels when I travel. The cost would have been $55 AUD per person for the full continental spread, which would have been amazing in itself with amazing dried fruit selections and breads along with a full selection of eggs, bacon, sausage, potatoes and all juices and coffees, etc…
However, as a diamond, my guest and I received all of that plus anything we wanted off the a la carte menu, all completely comped. I indulged both days on the eggs benedict and it was spectacular. Along with some sides the entire meal would have been approximately $100 AUD per person. This is something I would never consider paying for a breakfast, but it was spectacular sitting there for a few hours just taking in the view of the opera house and the boats going by, etc… To me, the value of that experience enjoying it with my dad is one I could never put a price on and I am so glad I worked to obtain diamond status and the two free nights in a $1,000+/night room on a great vacation.
@Gary, are you sure Diamond breakfast is for up to 4 “Registered” guests? I have always thought its registered or not, according to Hyatt GP rules. When I travelled with my family, I have never registered anyone but myself and never had issues with 2 or more guests for breakfast, domestic or international.
Great work on this article, really interesting. On one prior trip a friend was able to book me under her name and I ended up getting Diamond benefits in Tokyo. The free breakfast and items in room was worth it. That person was not able to make the trip but they honored the Diamond status.
@Pegasus
http://www.hyatt.com/hyatt/customer-service/gp-terms-conditions.jsp
“In Hyatt hotels that do not have a Regency Club or Grand Club lounge, daily complimentary full breakfast inclusive of one entrée (or standard breakfast buffet), juice and coffee (tax, gratuity and service charges included) will be provided to the member and each registered guest in the room, maximum four (4) people”
You usually don’t need to register folks but that’s the language of the T&C
$3600 for a few free nights and breakfasts?
“C’mon man!”
@Matt what did you do to get that status match. I have Starwood Plat. I wonder if I can get a status match with them.
@Jeff – your experience may differ, but last summer at the PH Vendome breakfast was included for my wife and I despite my only having the Platinum status conferred with the Hyatt Visa. Hopefully, the same thing happens for you in Tokyo!
We stayed in 2004 and loved every minute including the 84 euro breakfast, at the time.. Now that I only travel for vacations, I’ve lost all my Hyatt status and we’re returning using points from my banked 800k stash this spring. Not sure I would pay for it this time, but the savings from not having to qualify for diamond, from my own pocket, would pay for these perks. The economics and value of diamond are great when someone else pays the bill, but if you pay yourself is it still a value or better to just pay of out pocket?
I think you overstate the value of STATUS – 43,750 of the above points would have been earned with no status. And you presume that points get deployed to their highest ad best use, which may or may not apply in practice. Nevertheless an interesting analysis.
I agree with Swag (#11) on changing the calculation. In addition, would you have really been prepared to pay $900/night for your Paris stay out of pocket? if not, you should probably estimate what you would have been prepared to pay as a cash rate without the status benefits (which you capture separately) and use that instead. Personally, I’d be a little surprised if you prepared to pay even half that much for a standard room with no internet and no breakfast.
@robertw
I used my Hilton Diamond and IHG Platinum, but I think my Marriott gold also would have worked. I emailed Hyatt gold passport support and asked for a status match last year. I emailed over screen shots of my accounts for verification and then they started me on a program to stay 12 stays over 60 days. I was started as a diamond, which was awesome because I was treated as a diamond member from stay 1. I also earned 1000 bonus points on the first 6 stays. Once I achieved the 12 out of 60 I was made diamond until the end of February this year. Diamond also includes 4 suite upgrades you can confirm at time of booking on paid stays, and as mentioned, if you get the credit card as a diamond member you get two free rooms in a suite at 99% of the properties in the world.
@Gary: “I assume that the stays all earn a points check-in amenity.”
As a reminder, international (non-US) Hyatt properties do not offer a points check-in amenity, so unless 100% of your stays are in the US, this assumption is a bit off. I hate the fact that these points are omitted overseas because many properties have poor food and beverage Diamond amenities such as a piece of cake that can already be found in the club lounge. I hate when international properties do that! (Grand Hyatt Bali – I’m looking at you, among others…)
Strongly disagree with you on the breakast at the PH Paris. I stayed 4 nights on points as a Platinum but they gave us the breakfast for free. I did not see its value as anything close to 49€.
The people were nice but the buffet was vastly over priced and could not imagine paying that price or even half that for breakfast.
Makes sense on the assumption of an average nightly rate of of $135pn. However, if you live in Australia and travel in Australia and Asia, then the average night is likely to be closer to $350 per night – changes the equation significantly.
I split my stays between Starwood (Gold) and Hyatt (Plat), but would happily move all stays to Hyatt if the ave cost was lower. The only year in which I hit Diamond was when they had a promo for double stay credit.
Living in Oz, without cheaper hotel rooms and with no credit card deals of any significance, we’re really left out in the cold….
cheers
Personally, I think the sweet spot is having mid-tier status with Hyatt and Hilton. I have been delighted and frankly surprised at how well I’ve been treated by both chains as a Platinum member… quite often receiving noticeable upgrades (albeit not to suites) and also often receiving perks that aren’t officially granted at the Platinum level (such as free breakfasts).
Sure, getting suite upgrades might be nice, but as normally a solo traveler, that’s actually just overkill for me. Free internet + free breakfasts + nicer rooms (quieter, better views, etc.) = hotel happiness in my book :).
We just finished a SPG trip. 7am checkin to the W Hong Kong, free breakfast for 2 for 3 days, free suite upgrade. St. Regis Bali, 9am checking (which really is like a free day at this resort), free breakfast and room upgrade. W Singapore Sentosa Cove, free suite upgrade(and it was the penthouse), free breakfast for two. Like you mentioned the breakfast in all 3 resorts was truly worth $50 per person. The suite upgrades were worth $300-800/night. Early checkin to me is an enormous value when you are flying in to a foreign country early in the am. We used late checkout @ each property as well. Not to mention the other welcome gifts at the St. Regis. I would say in 8 days I was consistantly getting a 200-500 dollars a day worth of value. Ill take my SPG75 thank you!