The Hyatt Gold Passport Devaluation is Really Just a 4% Hit to the Cost of Award Nights

The Hyatt Gold Passport award chart devaluation was big news this week.

Coming after a huge devaluation from United and an interim devaluation from Delta, because they couldn’t wait for their June 1 and onward devaluation to take full effect, and in the context of this year’s total gutting of Hilton HHonors, I was prepared to hate — though possibly overreact — to what Hyatt has done.

My major reaction was likely because the biggest increases in award nights, while centered on only 13 hotels, are increasing the costs of the precise hotels that I want to redeem for. And of course they’re increasing the cost of upgrades on paid nights as well.

But if we’re going to understand what Hyatt has actually done, I think it also makes sense to look at the overall effect on their award chart.

So I built a spreadsheet. I took the number of hotels that Hyatt lists as being in each category, and came up with an average number of points to redeem for an award night under the current award chart. Then I plugged in the category changes to compare what award nights, on average across all Hyatt properties, cost under their new chart which goes into effect in early January.

I admit, I was surprised. This is an across-the-board 4% increase.

How it affects you depends on how you use your points. I focus on the higher-end properties when using my points, so this impacts me much more. But for standard award night redemption, the program as a whole only suffers a 4% devaluation. Most of us don’t get excised over that when the federal reserve does that to our cash savings.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. That might be true, but the biggest hit in this devaluation, IMO, is losing the ability to upgrades on paid stays so affordably from 3K-6K points per up to 4-nights stay to 3K-6K points per night.

  2. This is misleading; you obviously can’t treat each hotel equally. Demand across all gold passport redemptions is focused on the higher end hotels (as is the case for you). To understand the true devaluation to the program, you need to know the distribution of demand. Maybe Hyatt can provide this by tier?

  3. @Bill I am not at all trying to be misleading! I’ve been pretty hard on the changes in multiple posts. I just thought I’d run some numbers and say “on average, how much have redemption costs gone up?” And I caveat this by saying what matters most for each member is how they want to use their points. But I also don’t think taking a static # of redemptions at each property makes sense either (if we could get those numbers, which we can’t) since that’s largely dependent on the price of the award, you can’t separate the two.

  4. the 4% reduction assumes equal rates of redemption in each category, even aside from # hotels, which isn’t necessarily true. redemptions in certain categories (separate of # hotels) would presumably be more common than cat 1 or cat 7 redemptions.

    just be a statistical nerd about the weighting 😉

  5. Use so many posts to prove UR points still retain good value and promote people to apply using your links? Man this is pathetic

  6. Sorry, but this methodology is wrong. By analogy you could make a spreadsheet of every city pair offered by an airline and compare award prices before and after a devaluation. That would tell you almost nothing useful, because people just don’t redeem awards for travel between, say, LAX and Las Vegas. (Other than on Southwest, which has revenue-based redemption.)

    You need to measure a devaluation by the effect on awards people actually redeem. As you say, we don’t have those numbers, but we can surmise that redemption will be more frequent at properties where the value per point is higher. That’s also where the devaluations are larger.

  7. Eric FD is exactly right, and he’s not being a statistical nerd at all. This analysis is kinda like how you would expect Hyatt to try to spin the devaluation. It would be like if a pizza joint doubled the price of their pizzas, but lowered the price of all the various auxiliary items on the menu and then tried to say that “on average” their meals are cheaper.

  8. @Eric FD – correct, I don’t have data about the redemption preferences of Hyatt’s members. I’m just trying to run some numbers and say “overall how much more expensive did the hotels get” even if the ones I want to redeem for increased the most.

    @Steve – I’ve had 3 previous posts complaining about these changes, and pointing out how much I don’t like them. What about the way I ran these numbers would you do differently? I’d be happy to highlight an alternative data set.

  9. @nsx – I make very clear in my post that what the changes mean to you are entirely dependent on how you tend to redeem your points!

  10. Hyatt did just provide the distribution of demand.

    Hyatt Place Cincinnati-Northeast is going from level 2 to level 1, that’s 32% down.

    Hyatt Place Cleveland and Hyatt Place Milwaukee Airport are staying at level 1. No change…

    6 of the top Park Hyatts are going up 36% for a standard, and 45% for a Suite.

    Suite upgrades on paid stays are going up 400%.

    There’s your distribution of demand right there…

  11. @Eric FD @Gary – I’m sure theres a correlation between redemption shares and the redemption value (average nightly rate/number of points), and data on redemption value is publicly available. If there’s no correlation, then weighting based on redemption value is still much more useful than this statistic.

  12. This is a bizarre method to calculate a devaluation. Wherever would someone come up with such a bizarre method of calculation and then represent it as reflective of what Hyatt has done to its points in customer accounts?

  13. Yeah Gary, why in the world would you attempt to quantify Hyatt’s devaluation in a useful, digestable manner without obtaining unobtainable data and customizing your analysis based upon the redemption preferences of each individual reader?

  14. I would be curious if you went back and calculated your Hyatt point spend for 2013 how many more point you would have been out had the new rates been in place all year?

  15. I’m sure there are people who primarily redeem their points to stay at category one and two Hyatt properties. I’d guess that less than 0.0001 of them read this blog.

    Probably some of the readers of this blog primarily redeem their points for cat one and two Hyatt properties. Again, I’m guessing much less than 1%.

    Like AdamH, I’d be curious to know how much more Gary’s last year or two of stays at Hyatts would have cost at the newly announced rates. I’m guessing way more than 4%.

    I don’t stay at Hyatts much, but I can tell you my 13 Hilton award nights in 2013, all booked before the devaluation deadline, would cost 65% more in 2014.

  16. @Robert Hanson “I’d be curious to know how much more Gary’s last year or two of stays at Hyatts would have cost at the newly announced rates. I’m guessing way more than 4%.” Yes I think I was quite clear that the biggest effect here is on my preferred properties.

  17. @AdamH – my only 2013 redemptions during 2013 were in categories 4, 5 and 6 and not at hotels changing categories… so each goes up either 0%, 11%, or 14%.

  18. @Robert Hanson – that’s a price change, not an indication of frequency or quantity of redemptions. Suite upgrades on paid stays for most go up 200% – 300% since most stays where they are used aren’t 4 nights. That’s a big increase. It’s still the best deal on suites offered by any hotel chain. But it’s not a ‘distribution of demand’ because suite upgrades on paid nights were almost certainly not the most frequently redeemed-for award.

  19. Get outta here guys.. sure, this isn’t “that” useful, but Gary made that clear. He said the properties he stayed at are the ones primarily going up. Also clearly stated that “on average” the deval made properties go up 4%.

    “My major reaction was likely because the biggest increases in award nights, while centered on only 13 hotels, are increasing the costs of the precise hotels that I want to redeem for. And of course they’re increasing the cost of upgrades on paid nights as well.”

    Not sure why everyone has a problem with the data. Sure he doesn’t want people to stop applying for Chase cards, but he’s also calling it how it is.

  20. I am part of the 1% that redeems at Cat 1 and 2 properties. I have 2 kids under age 3 and limited vacation days so redeeming a 239/night room on New Year’s Eve for 5000 points works for me. Sure I’ve redeemed in the past at the more aspirational properties in Asia and Europe but they are out of reach for this stage in life. Thanks for the analysis Gary.

  21. @baxterboy12 Same here

    I only redeem category 3-5 hotels with emphasis on 3-4. The devaluation does not hit me hard at all. But feel your pain.

    Nevertheless, I am upset that this year can be catalogued as the worst year in terms of devaluations. But as far as Hyatt, I think I dodged this bullet.

  22. From “Loyalty Traveler”s blog, 85% of all Hyatt hotels are in categories 1-4, so effectively have no increase. From the typical traveler’s perspective, 4% increase might even appear to be a little high.
    I think the analysis is simple but clear and the assumptions are well laid out. To weight it any other way than equally would require far more information not only about the current award stay pattern but what effect the changes have on that pattern and the utility (sorry, economist talk) lost from shifting stays from one hotel to another, which people will inevitably do. Who knows, people might even figure out that they like the lower category hotels that they have to “settle” for more than the higher category hotels!

  23. Category 2-4 also effectively had an increase in points for award stays in Regency Club-level rooms and Suites.

    In other words, the overwhelming majority of Hyatt hotels did not avoid an increase in points for award stays.

  24. @GUWonder – yes, premium rooms get more expensive, as do suite upgrades on paid stays, I think I’m clear I am looking at changes in standard room awards.

  25. This comes to a misleading conclusion. The question is how the increase in redemption rates will affect the customer. And as you seem to agree, most of us earn our points from everyday spend and from staying at Hyatts all throughout the year so that we can take an aspirational trip once or twice a year in someplace like NYC, Paris or Hawaii. Before the devaluation, Hyatt was clearly one of the best choices. It was my personal favorite, and I focused my spending there. After the change, the hotels I want to spend points at are not such a good value anymore. It is a huge 30-40% increase. I could understand half that. Hyatt is no longer the clear winner, and I have now joined Marriott, and am looking at switching my points earning activity to other programs. It just brings all the competition in on Hyatt.

  26. @Sue – the question for this post is explicitly not “how will people who like to take an aspirational trip” do. It is what is the overall devaluation across Hyatt’s portfolio of properties? I dealt with the former question in 3 earlier posts, so what several commenters here seem to have an issue with is that I was trying to answer a different question — while flagging it as being very much a different question.

    I believe that Hyatt still offers the best overall value proposition, just by less of a wide margin than before.

    Marriott won’t get you aspirational properties for less in-hotel spend than Hyatt will even after this devaluation. (Are there any Marriott aspirational properties? Not being snarky but I can’t actually think of any.)

    Starwood has great properties but their in-hotel spend is far less rewarding and their best properties cost more points than Hyatt’s even still.

    Hilton’s program gutting was much more dramatic at the top end than Hyatt’s.

    Priority Club is overall pretty weak, but for those Intercontinental hotels that honor full Royal Ambassador privileges on award nights they can be good value.

  27. I think your point seems to be that the devaluation was not that bad, and you cite the 4% number as evidence. My point is just that most of us aren’t going to redeem our points in the middle of Ohio, but instead in the middle of Paris. And for that, it’s a huge, out of character hit. Part of the reason Hyatt earning was so attractive was the differential between it and other programs. You could get a very good value for you money, making it worth your while to concentrate ALL your stays and spending on Hyatt. Now, not so much. From the outside it looks like of the revenue specialist from Marriott moved companies and is now hatting up Hyatt on being profit driven. Which, interestingly enough puts Marriott (and others) in the scope. The point here is that Hyatt had me (and many others) fully committed, but the magnitude of the increase discourages us, and MAKES us sit down and research the competition. Your headline about 4% not being so bad is just creative math that misses the point. It looks like their concern with profit has begun to outweigh their concern for maintaining the extremely loyal customer base they have cultivated. It’s tough to keep customers so committed, and yet before this they had done that. It was a very smart program. This is a tactical change, and is more than a 4% increase. Clearly.

  28. @Sue “Your headline about 4% not being so bad is just creative math that misses the point.”

    I make the point loud and clear, and made three separate posts emphasizing the significance of the award chart changes.

    I point out in this post that how these changes affect you depends on how you use your points.

    And I use the points the way you do, so this affects me substantially.

    There is no creative math. There’s a spreadsheet. What in the spreadsheet do you disagree with?

    I understand you’re frustrated with the changes. I am too. But there’s nothing inaccurate in the post as far as I can tell, I even flag here the very issues you are raising! 🙂

  29. What is loud and clear about your post is the headline. It give the idea that your post can prove that this devaluation isn’t so bad. What your spreadsheet proves is that there are seventy seven category one through four hotels for every category seven hotel. There are more than ten times the inexpensive hotels than the most expensive category six and seven. So the inexpensive hotels (where we pay cash) didn’t get hit so hard on points as the expensive hotels (where we use points). Using a headline that says one thing, and data in the text that says another is frustrating. I have always loved your blog for your insightful and intelligent analysis. You give great advice, and it comes from this great viewpoint that I find really, really helpful. But to say one thing in the headline, and another in your proof isn’t your normal, wonderful analysis. What your spreadsheet obscures is that just because there are more cheap hotels in the system doesn’t mean the price increase to the expensive hotels is any less biting. Honestly, this is a change in character for Hyatt, and you should say so.

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