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Hyatt Loses Tax Court Ruling With Huge Implications For Loyalty Programs, IRS Sought To Tax $250 Million

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Oct 03 2023

The IRS audited Hyatt for the tax years 2009 – 2011 and found that it wasn’t paying tax on loyalty program revenue. It didn’t include the revenue received for what was then Gold Passport (now World of Hyatt) in income, and didn’t include payments from the program as expenses. It just ignored the program, even though it collected money and invested it earning a return.

The IRS wanted Hyatt to not only pay up for those years but to go all the way back to the beginning of the program in 1987, with a quarter of a billion dollars of income at issue and a tax deficiency of $65 million.

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More Hyatt Hotels Are Ignoring Elite Breakfast Benefit Rules, And Getting Away With It

Oct 01 2023

A chain’s most valuable customers are its elite members, who deliver an outsized portion of room nights to hotels. To entice them, they’re promised benefits like upgrades and free breakfast.

Knowing that hotels are going to try to cheat, Hyatt spells out in its terms and conditions what the breakfast benefit is for Globalist members when no club lounge breakfast is offered.

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Hyatt Hotels Increasingly Getting Away With Not Cleaning Rooms

Sep 17 2023

Hotels are ignoring chain rules. Guests book properties assuming they’ll get what the brand promises, and then the individual property doesn’t deliver, choosing to cut costs instead. That devalues the brand, while helping the bottom line of the individual hotel.

This often manifests in properties skimping on or ignoring elite benefits like breakfast. But it also covers housekeeping. And it’s certainly not limited to the best-known offender, Marriott.

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Hyatt Faces New Class Action Lawsuit Over Resort Fee Fraud

Aug 22 2023

A new private lawsuit has been filed against Hyatt over resort fees. Consumer group Travelers United has filed a class action in Washington, D.C. against the chain. Especially highlighted in the complaint is the Grand Hyatt Washington and its ‘destination fee’.

Travelers United is suing under the District’s Consumer Protection Procedures Act requires businesses to sell products at their advertised prices. But Hyatt advertises prices for this hotel at rates consumers cannot pay, since the hotel adds on a fixed amount to its prices in the form of destination fees.

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