Hyatt’s CEO Says Experiences Now Matter, Not Points. He’s Missing… The Point

Skift says that Hyatt “is adjusting how it markets its loyalty program to reflect new realities” of reduced business travel and increased leisure travel. That’s what the chain itself suggests. But it isn’t really true in the most meaningful sense.

There’s a traditional way of thinking about points, whether it’s airline points or hotel points. And that’s that:

  • The company pays for travel
  • The traveler keeps the points
  • It’s the kickback to the traveler that keeps them loyal, spending other peoples’ money

But for leisure travelers it is different. The points are a rebate on your own spending. You’ll take a lower rate up front, versus a business traveler who might even stretch and spend more for a rate that includes bonus points, or who tries to maximize spending their per diem on property to earn points in the program.

So with leisure travel, the thinking goes, points matter less. But that’s an antiquated notion, because of the prominence that co-brand credit card partners (and other partners) have taken on – buying points from the travel business, and rewarding the customer for other activity outside of the hotel or plane.

Anyone who seeks to conclude that points no longer matter (“guests rarely say in focus groups that they opt for its brand because of the points”) miss the point.

  • Points may be table stakes
  • But de-emphasizing points makes you less rewarding than competitors and costs business

Hyatt’s CEO says that experiences now matter, with leisure, more than points.

“We’ve decided that a more enduring way to actually capture loyalty is through great experiences, and that starts with leisure,” Hoplamazian said. “So we’ve shifted the portfolio along a very deliberate position, which is we can drive true loyalty that’s experiential loyalty, more than it is the currency of the points and becoming a prisoner of the loyalty program. And that’s worked.”

This may be true in part. Hyatt has certainly acquired more leisure properties such as its deal for Apple Leisure Group giving them a big presence in all-inclusives. That taps the leisure market.

And nearly every loyalty has two components baked into one:

  • Reward: that’s the points or rebate
  • Recognition: better treatment for elite guests and sometimes even just for being a member

Different consumers are motivated more by one facet versus the other. Leisure customers may be less motivated by points as a rebate for hotel stays, but may be more motivated by points for credit card spend. Recognize – elite benefits – matter in differing amounts to different guests. Perhaps a club lounge matters for a business traveler while a free breakfast in restaurant is more valuable to a leisure traveler. A confirmed suite may matter more on a leisure stay (when it isn’t just you in the room!) but may also be what motivates the business stay.

Business travel is down, but it’s a mistake still to unbundle the customer as business versus leisure. Business travelers travel for leisure too, and it’s those leisure stays that are often most important to the business traveler – abuse them all you want, but not when it matters most when they’re traveling with their family.

So what is Hyatt doing differently, with more leisure travelers and fewer business travelers than pre-pandemic? They say they’ve shifted but they are really doing… the same things, other than adding leisure-focused hotels to their portfolio.

With roughly half of Hyatt’s business likely to come this year from leisure travelers, the company encourages guests to sign up for its loyalty program less for the points and more for perks, such as access to discounts on stays, “curated meditations” to help them relax, the ability to stream content from their favorite streaming services via Hyatt’s TVs, and so-called “milestone awards,” such as access to its “club lounges” at select properties that are separate from elite status and are available to everyone based on hitting certain targets for stays.

They try to get guests to sign up for he loyalty program, and then they offer guests better treatment for staying incrementally more nights. There hasn’t been as much of a shift as some people like to claim.

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. As I understand it, the “shift” alluded to here (beyond the leisure property acquisitions as mentioned in the post) is WoH’s extremely aggressive category inflation and peak night pricing over the past two years.

  2. I had breakfast with the Regional manager for South Africa in Cape Town in May (I am a lifetime Globalist). I complained about the lack of Regency Clubs. Got the same answer: we are focusing on younger people and they don’t want Regency Clubs they want “experiences.” I am a business traveler; I want a comfortable room with things that work (and a Regency Club if possible). I dont have time for “experiences” except when I travel on holiday. I still like Hyatt but I think they are ignoring their most loyal customers.

  3. It’s no secret that Hyatt has pivoted toward resorts and all-inclusives plus independent boutique hotels under JdV. There are few, if any, full-service Hyatt Regency or Grand Hyatt properties opening up. Especially in the United States, despite many markets having no full-service Hyatt-flagged property. But at the same time, Hyatt is kidding itself if it thinks the “experience” its existing properties in North America are offering a great, upscale experience. Has anyone stayed at the Hyatt Regency Clearwater Beach, the Hyatt Regency Wichita, the Hyatt Regency Houston airport, etc. Even one of flagship Hyatts, the Hyatt Regency SFO. You can’t even find an open club lounge!

  4. What’s the point of Hyatt when you can’t even use your points? There are entire markets where not a single hotel has a single room on points available even though the lowest category rooms are available. London and Paris are a great example.

  5. This sounds more like the CEO trying to downplay how little the amount of points earned per stay, even as a Golbalist are, versus Hyatt’s competitors like Hilton and Marriott. Didn’t Hyatt just re-adjust their property categories and move to a dynamic model for points stays? If points don’t matter, then why the re-adjustment? 2 things Hyatt gets right in my opinion, for Golbalists, are 4pm check-out and free breakfast. Nickel and diming loyal customers with points gimmicks is irritating.

  6. Side question – has anyone analyzed how hotel point behaviour differs from airline point behaviour? Maybe just my experience, but I usually choose hotels on location, not brand. But airline points definitely decide how I will fly based on award cost, not to mention what credit cards I use.

    Incidentally, I find the lounges make more of a difference as a leisure traveler. On business, I am on a schedule and price insensitive. On leisure travel, I have time to have breakfast and will drop by for an aperitivo.

  7. Sounds more like Hyatt has already decided to further devalue Hyatt points and this is Hyatt’s post-decision rationalization of its upcoming actions — that is being upcoming Hyatt point devaluations. Given what Marriott and Hilton and IHG have done to the value of the points for redemption purposes, Hyatt sees that and follows in its own way.

  8. Whew! Looks like I cancelled my Chase Hyatt card just in time after 12 years.

    Just like airlines, no point in being loyal to a hotel chain, not even Hyatt, any more after the devaluations, games with award rooms, letting hotels flout the loyalty tier benefits, etc.

    And while my Chase CSR did ask why I was canceling my card, she made clear, and her tone indicated, that she’s heard it all before and she said she couldn’t blame me.

  9. Hyatt has read the tea leaves and sees the future. The newer generations are in to experiences to post on social media.

  10. I strongly disagree, I prefer points over experiences. I stay at Hyatt’s throughout the year for work and leisure to bank the points for a week long vacation in Key West with the family.

    To think an ‘experience’ is the ability to stream content via the in room TV or meditate is short sighted or an excuse to hammer points earning soon. If you want to stream to a TV – Stay home. If you want to meditate, great. My meditation is two Woodfords in F on the way to the Hyatt I got on points!

    Maybe this is why the sign up bonuses on the two Hyatt cards are so lackluster.

    This will cause me to shift all spending to a fluid points currency, UR or MR. No more spend on my Hyatt card.

  11. This sounds like a prime example of what less imaginative executives are wont to do, which is selectively interpret data to justify what they were going to do anyway.

    Of course I want “experiences.” I want the experience of a 4-star stay where I would have stayed at a Hyatt place. I want the experience of free breakfast in a club lounge.

    Hotel chains want to provide marginal, less tangible benefits anyway so they do that and brand them as “experiences”…

    So far the chains’ adaptation to the shift to leisure has been to give members insignificant rewards like a bottle of water or access to what was previously the direct book rate. I don’t see any serious effort to replace the tangible “experiences” mentioned above with something I’d actually value.

  12. @GUWonder – while Hyatt points are undoubtedly worth more than the other chains on a cpp basis, it’s also significantly harder to acquire their points either via stays or cobrand spend than those other brands (arguably with the exception of Marriott). E.g., you could earn enough points for one night at most of Hilton’s top end properties through $30-35k unbonused cobrand spend; with Hyatt, that would take $40-45k. Hyatt has already imitated the bigger chains with massive devaluations in this regard.

    IMHO the only reason that it seems like Hyatt award nights are more achievable is that it’s the only hotel currency for which you can efficiently leverage transferrable bank reward currencies.

    All that said, I certainly wouldn’t bet against them devaluing even further and becoming even less competitive from a points redemption perspective.

  13. “Come for the experience! Experience the thrill of our complimentary reusable plastic bottle of hotel brand water! Experience how you can save our planet be refilling your bottle from our tap over and over because that’s the only bottle you’re going to get! Experience the “at home” feel of our hotel as, once a week, we drop off fresh sheets for you to change yourself—just like you do at home! Experience your good judgment as you try to figure out how use six Keurig coffee capsules when we only give two little caplets of cream that have turned brown due to age! Experience the feeling of security knowing that your car is also getting a good night’s sleep in our comfy, secured hotel garage for only $48 per night! At checkout, experience the trauma of remembering your elementary school math exams as you try to add up the mandatory fees and taxes added to the room rate that you thought was all-inclusive! Experience the one-on-one interactions with all of our friendly staff as each one personally asks you to mention them by name in a 5-star Trip Advisor review so that they don’t get cut in the downsizing that’s coming later in the week!”

  14. @InLA good one.

    Marriott pulled something similar years ago while selectively interpreting their “data” and forcing it upon us..

    Millennial do not want:

    Desks in rooms – Prefer to work in lobbies instead of rooms when necessary
    Luggage stands
    Daily housekeeping
    bottled water
    single use toiletries

    I’m sure their are others.

    Where is the money going to come from to fund all these hotel rooms and experiences when the gray train runs out? Young people also do not want to work or fetch their own food either.

  15. I smell a forthcoming change in the Chase UR to Hyatt transfer ratio. That would really hurt.

    @FNT Delta Diamond: I experienced the lack of points availability at LHR Hyatt Place this summer. It took me a month before I got lucky and was able to book a room. It was underpriced at 5k points per night, so I think this is just supply and demand.

  16. I’ve lived in hotels for almost 10 years, with over 300 paid nights a year on average just in hotels not counting Airbnbs or other misc nights and Hyatt has always been my 1st choice. Already at 118 Hyatt nights for the year…

    Why? Because I feel like their points earning and loyalty recognition are better than the competition. That’s it, that’s all. Change that and see my loyalty change as well.

    But please don’t! I love Hyatt. Don’t break my heart.

  17. Hyatt seems to be going in the right direction. I can’t wait for the experience of “the ability to stream content from their favorite streaming services via Hyatt’s TVs”! What a bunch of crap.

  18. Has Hyatt’s CEO had a stroke? Points are a form of currency. If points don’t matter neither does the money they charge. If Hyatt wants to eliminate points they should significantly reduce prices to offset the loss of value.

  19. I have enjoyed the years in which I have been Globalist (and Diamond before that). The 4pm checkout, and the complementary parking and lack of destination fees on award stays helps. And their network of 5000 point Cat1 HP/HH keeps me valuing their points at $0.02, which keeps me charging to my CSP.

    That said… I’m not going to make Globalist ever again now that I have retired (last year was a fluke due to my father’s illness and me accruing 60 nights by July 1). That means that the chain is basically HP/HH to me, plus the Hyatt Dulles and GH Tampa Bay. So moving to dynamic pricing would trash the relationship just as Hilton, Marriott, and most recently IHG have done.

  20. @ FNT Delta Diamond — A few weeks ago, I readily found availability for February 2024 at Hyatt Regency – London Churchill for the exact dates I wanted, plus suite upgrade availability. I’m not sure why everyone is always whining about availability at that hotel. I have always found it for the dates that I was travelling to London.

  21. The consolidation of the airline industry and devaluation of their loyalty programs was first. Then came the start of this trend with Starwood/BonVoy followed by Hilton.

    As a road warrior and almost reaching my second lifetime globalist milestone this concerns me. I already feel that my loyalty just over the past 12-15 months means less and less. Upgrades are never available unless pre booked, breakfast parity from property to property varies greatly, use of points at several category 6-8 is rare and never seem available on reasonable weekends.

    I am not sure what they mean by experiences. I want them to reach out to their most loyal customers at least with a survey to gather our opinion. Even OneWorld does that 🙂

    While I am still averaging 100 paid nights per year, I expect at least the recognition of nothing else and if the basics go away and I begin to get more from say an Amex booking a a different chain, likely may be more open to other branded properties and resorts.

  22. I’m more of a leisure traveler. I value points snd free night cents more than experiences.

    What bothers me with the whole point devaluation is the idea of ROI and how many nights would you need to stay to get a free night

    Better deals get my money.

  23. I honestly don’t understand the value of hotel loyalty programs unless you are playing an angle to use “loopholes” to get more out of the program than you deserve (mostly by gaming credit card opportunities).. Otherwise, there’s no point in being loyal. Be mercenary and get the best price for the best hotel you want for every stay.

  24. The comments seem silly, but maybe not terrible. I will say my treatment at Hyatt has been great, but I’ve only made the switch recently. But I made the move based on point value, not the experience. And I’m mostly a leisure traveler. The value to me is the Hyatt value makes it usable from transferable points (UR and Bilt). If they go the way of the other chains (a devalued currency with co-branded card points as the only way to make up the difference), that would be unfortunate. It will also require them to give away status on the cards to be competitive (nearly every other chain gives up a high status to card holders). I already picked up a co-branded IHG card to fill the gaps in places where Hyatt is limited (i.e. road stays). If I had to do the same with Hyatt, I would probably shift to a brand with a bigger footprint so I only had to use one co-branded card.

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