Some Hyatt hotels have recently started to issue prices above their Category award level by using some clever trickery. While increase prices are never good, this may not be all bad. You decide.
Standard Award Chart
Hyatt doesn’t offer a completely variable system based on cost like that of Hilton (sometimes) or in the airline space, Southwest. A standardized award chart with category levels allows guests to book the stay based on category and nightly availability.
Like anything else in the award space, there are good and bad deals. The Park Hyatt Mendoza is just 8,000 points per night or $144-160/nt during the Argentine summer months of December and onward. Or the absurdly overpriced Grand Hyatt Aruba, $300/nt or typically 25,000 points, though availability has been limited. For comparison, you can score a room at the Park Hyatt Maldives for 25,000 points or $800-1,000/nt.
A standard award chart keeps point prices consistent and allows travelers striving during the year (and sometimes over the course of many years) for that ideal redemption. Even though category shifts may occur, in fact, they do every year, most are up or down one category, keeping the property mostly in reach for guests that have been saving every point.
Like The Rest of the Industry
Most of the travel loyalty space has switched to variable rate awards even if they haven’t said so. Delta, reviled for the removal of their chart altogether, at least had the decency to be open and honest about the fact that they would charge approximately how many miles they felt replaced their cash price. Southwest does the same with a direct rate of 78 Rapid Rewards points per dollar.
Hilton made the move as well, and have become fully variable. On this example, I revert back to the Hilton hotel options during our spontaneous trip to Cartagena, Colombia. The prices range from $119-190/nt (USD) and the price in Honors points predictably follow the path.
When we booked the Conrad Cartagena, the price was $200/nt or 48,000 points placing Hilton’s valuation between $.00416 and $.00413/point. Anyone who says they are worth more is missing some brain cells.
American Airlines, for their part, have been perhaps more nefarious than Delta because they claim to still have an award chart but often price their awards variably. For example, the following are coach awards to Hong Kong from Pittsburgh (my favorite route). The price ranges from saver at 32,500 Advantage miles to 115,000 with prices at 35,000, 65,000, and 85,000 filling in the gaps.
In essence, while Hilton, Southwest, and JetBlue have been honest about variable pricing, American and Hyatt have been less forthcoming. They both claim to have standard award charts but then deviate from those through different means. Delta more or less reveals nothing accurate in statements, but their actions are clear. Oddly, it cropped up on multiple properties searching a variety of dates in two different countries. It seems to be more than a case of bad luck, but a growing trend.
Not Fully Variable
Hyatt is employing the American model more and more – it’s come up three times in the last two weeks for me personally. For example, the gorgeous, and frankly, under-priced Hyatt Regency Cartagena is listed at 8,000 points, a Category 2 property. However, they don’t necessarily sell rooms at that rate.
Though standard award rooms were available for booking and should have come in at 8,000 points as seen above, the app only offered Club Rooms at 12,000. Before you suggest it’s a technical glitch in the app, let me stop you right there, I called as well and the same result was reached.
Maybe it’s isolated – that property, that date, that time, you say.
Booking Denver for an upcoming weekend I found the same problem. This time the Grand Hyatt offered the three rate categories all within line with what they should have, the Hyatt Regency did not.
It’s not that the Hyatt Regency was sold out of standard rooms either. Both were available for cash, the property simply chose not to make the cheaper rooms available for points redemptions. The rate on those rooms were $229 for the selected night, still discounted from full rack rate. The hotel is essentially driving up the nightly award reimbursement rate by still selling those standard rooms but not making them available for redemption while keeping the low category for other times when they really need heads in beds.
Consider that the hotels engaging this method moves the property up more than a full category in the case of the Denver properties and a single category upgrade in the case of the Cartagena property. The easy argument for this is that they are not the same type room or that they have sold out the cheaper rooms, but rates were not commensurate with a full sellout or even within 10% of such. For example, sold out rates were in play for the Hyatt Place nearby at a staggering $389/nt for a standard room.
It’s a Bad Sign
If the hotel only has Club Level rooms and wants to charge in accordance with that, ok, no problem. I am good with the same thing for suites if that’s all that’s left. The hotel shouldn’t have to honor award rates for standard rooms while giving away Club or Suite rooms, even if they are going to give those rooms to elites anyway.
But when the hotel decides that they will still accept rates well below sold out prices or 95% of rooms occupied, then they are starting to become bad actors. Gary Leff has widely covered properties that toy with availability by re-classifying their rooms to avoid giving away award nights. He has specifically covered the Hyatt Regency San Francisco on a number of occasions and also outed the Grand Hyatt Aruba which had appeared to have changed their ways, but on my random searches looks like they have returned to bad habits.
Further, unlike truly variable award programs, a Hyatt hotel that should cost $120 but has very low occupancy will not have a mechanism by which to lower their award price. If a Southwest flight that costs $29 runs just 2,262 points or a Hilton room costs $10/night, the award price drops in conjunction with that discount. In some cases, there have been isolated incidents of Hyatt doing just that, but it hasn’t been entirely clear whether it was a glitch or a genuine sale.
If the chain will allow the cost in points to rise with an escalating cash equivalent, the award prices should fall respectively as well. There’s no easy way for the hotels to do that, though releasing award space only at higher level rooms is at their fingertips.
Quasi-Variable Pricing Has Its Benefits Too…
One benefit of this form of variable pricing is that when hotels really are full at their entry-level category, you can still secure a room in the property you want if you are willing to pay a premium. We did just that when we stayed at the Hyatt Regency Cartagena two weeks ago (review coming soon). While the hotel was a Category 2 property, they offered club rooms for 12,000 and at checkin, upgraded us to a standard suite. We would rather (in this case) have the opportunity to stay on points than pay with cash or not stay at all – especially since our trip to Colombia was impromptu (and thus not factored into our budget).
On another trip to Hawaii, standard room rates were not available at the Hilton Waikoloa, but we were able to pay a variable rate and burn points rather than dollars, leaving us more money to do fun things in Hawaii.
Without variable pricing, quasi or fully variable, these properties might be off-limits to World of Hyatt members who prefer to pay with points. However, offering rooms with more benefits at a higher rate, guests can decide if they want to pony up the extra points. In the most literal sense, it’s better than nothing at all because these properties may choose to avoid releasing any rooms if they could not command a higher price. But that’s a fatalistic view. In the same way that I was unwilling to warmly embrace Marriott and SPG after their loyalty program kumbaya this week, maybe I remain skeptical about most loyalty programs these days.
What do you think? Is this bad luck or are Hyatt properties employing quasi-variable award pricing? Is it a bad idea if that was the case?