Hyatt changed their very popular loyalty program in 2017 and may have upset their best customers. Hyatt has made a series of changes to the program that walked back some of the restrictions keeping elites from qualifying for the program.
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From Diamond to Globalist
Late in 2016 changes were announced to the beloved Hyatt Gold Passport program (Matthew actually broke the story on PenAndPassport.com). The phoenix that rose from the ashes was the World of Hyatt program that in some ways was an improvement but for most seemed to fail to realize the limitations of its own brand.
The most egregious change for leisure travelers was likely imperceptible for Hyatt loyalists in control of their travel plans with no corporate oversight and convenient trips to Hyatt only cities. Diamond status was previously offered to Hyatt guests that completed either 25 stays or 50 nights in a year and for leisure travelers with some business trips to huge cities, they could just scrape by with 25 stays. Matthew has written about how he had trouble re-qualifying, I personally mattress ran to lock it in for two years because I was nearly certain I wouldn’t re-qualify. The new “Globalist” status requires 60 nights in the first year of the program then 55 to renew but removed the possibility to achieve status with stays.
This was met with uproar from many Hyatt Diamond guests who go out of their way to stay at Hyatts when Marriott/SPG, Hilton and IHG tend to be less expensive and more widely available. Hyatt hotels now number just over 700 properties worldwide but are sparse when compared to Marriott/SPG, Hilton and IHG which each offer 4,000-6,000 properties per brand. Some areas are completely barren for coverage. Do you have business in Lima, Barcelona, or Rome? Sorry you’re out of luck. Those aren’t small markets. There are just two hotels in Beijing, a handful of properties in Africa, one in Rio (opened for the Olympics), one in Mexico City – the most populous city in North America!
As you can see from my meandering rant, it was difficult for many long-time Hyatt loyalists to stay loyal before the new requirements went into effect. Considering that some were staying at as many Hyatt hotels (on single night stays) as they could, they scraped by with just 25 stays/nights due to lack of available properties and then paid a premium for the privilege.
In a nutshell, spending 60 nights in Hyatt hotels with the same limited footprint was about as attainable as eating Chick-Fil-A on Sundays unless market conditions were perfect.
Corrections to Requirements
As it turns out, market conditions were not often perfect and Hyatt clearly lost an awful lot of business. I have written before about how the brand has a tendency to swerve and overcorrect their mistakes. On the one hand, it’s great that they correct them at all, but on the other hand, is the brand afraid of polling their elites or doing a focus group?
After the changes were rolled out for elite night requirements in 2017, the brand quickly gave a number of exemptions to the requirement essentially lowering them by 17% from 60 nights unconditionally to generally 55 nights – a change in clear response to elites with pitchforks.
Hyatt announced new perks, which I personally loved, a pair of free night certificates and the ability to earn additional ones throughout the year. These certificates were good for (1) night at a category 1-4 hotel and (1) free night at any Hyatt in the world (category 1-7). But like any good backhanded compliment (“You hit pretty hard… for a girl”), they didn’t really shout from the rooftops about their expiration date which some people found out the hard way. At 120 days from earning (not from status renewal) the certificates would expire, and Hyatt recently walked this change back to 180 days, which was an improvement on the back-handed compliment (“You hit pretty hard… for a beautiful woman”) but still not the benefit it should be – just have them release at the beginning of the status year and expire at the end of it… like every other benefit.
Included in the same press release about the aforementioned change was another regarding award stays. Hyatt will now count nights spent purely on points as elite-qualifying. This groundbreaking development may be a huge improvement for Hyatt – it is – but it simply now puts the brand on par with every other major hotel chain that already allowed this. In fact the last major program to change from not allowing award stays to count, to then counting them was IHG which reached the conclusion in 2011.
This is clearly in response not to matching benefits of other programs to remain competitive; Hyatt Gold Passport was far superior (and World of Hyatt still is) to IHG’s Rewards Club for example. This came down to the loss of elites in the ranks. Hyatt overestimated the loyalty or flexibility of their top-tier elites (I had been one for a few years) and assumed that they would thin the ranks (after they were previously too generous with awarding status on challenges) and started to lose too many of them. By January 1st the verdict was already in on 2017 and the announcement was made regarding award stays counting. Clearly things had not gone as planned.
Adjustments Made in Retrospect
If it were not clear enough through all of these changes, Hyatt leadership found a way to qualify elites without them even knowing. The brand decided to retroactively allow award stays to count towards elite status in 2017. That’s a welcome adjustment, but it still keeps the requirements far too high for their footprint. It is starting to look like Hyatt is desperate for top-tier elites… because they are. Who would have thought that increasing elite qualification requirements by 20-240% in one year would have back fired?!?
What’s Next?
Keep your eyes peeled for ‘Double Elite-Qualifying Nights’ and ‘Welcome Back’ promotions to lure elites back. When I was just starting out as a manager in a local pizza chain the owner of the business gave me sage advice.
“Never let your customer taste the competition.”
You never let the customer try something else. It’s not because you believe your product is inferior, but perhaps the competition does something different, offers something more – perhaps your customer no longer wants to pay a premium for your product because it simply doesn’t differentiate enough from the competition. Once they have had a taste of what else is out there, you may never get them back.
I, for one, was an extreme Hyatt loyalist – once I experienced Diamond status I did everything I could to retain it. But over the last year, I have been able to try Hilton and SPG and found that sometimes the competition does things better. Hilton, SPG and Marriott properties are certainly more prevalent and often they don’t cost as much. I can’t fault a Hilton loyalist and snub my nose at them like I once would have because I genuinely get treated very well and they haven’t betrayed me in the way that Hyatt did.
With the latest walk back, Hyatt is openly acknowledging that they went too far and lost more elites than they expected to with the changes this year. They are retroactively qualifying guests simply to get them back and inflate their elite numbers again, but I am not sure that it is the answer. While I don’t think they will ever lower the requirements back to 25 stays or 50 nights, I would bet that they find a way to qualify members around the same level or close to it.
I am certainly not going to cheer Hyatt on for making changes to the program that cost me money to stay with them this year, and should have been there all along.
What do you think? Am I just sour grapes over the requirements? Do you agree that the verdict is in and loyalists are voting with the dollars?
I am going to personally give them 24 more months as a requalifying “diamond” , come end of March as I should hit 60 nights by then. If they don’t wow us by February 2020, I am into SPG / MARRIOTT . I will take a patient approach and wait and see as Hyatt actually works well for me in the cities I travel to for work and vacations in Asia and USA.
It is possible that they will walk back all of their changes or make it impossible to avoid them by adding even more benefits – but the fact remains that they broke a working program with an incredibly high satisfaction level. I understand your perspective, I did the same type thing quitting American Airlines and transitioning to United before I gave away status on AA. Hyatt coverage is improving, but for some a 240% increase in requirements is just a step way too far.
You are wrong. Only elites like you left Hyatt. You kind of people only game elite status and take advantage of that. The elite Hyatt really like is people with high spending. We are glad that Hyatt make that change. We only need spend 20k to renew our status no matter how many nights. And if we do stay over 60 nights we get more incentive. That is fair. Last year I spent 37k and stay 72 nights just because of new policy. Simply we do not care how their elite program change. The only thing we care is tha amount of high end hotels in big cities in the world like NYC, Tokyo, Beijing, Shanghai, Paris…
Your kind of people never imagine the real elite people’s life. The only thing you cares is just I got 2000 more points. That is pessimistic…
please find me a Hyatt in Munich
… or unless you think Munich, the European HQ of automobile manufacturing, is considered a small city
And I’m sure the 1 single Hyatt place next to Frankfurt Airport will satisfy all the bankers needs when they head towards conducting business at the ECB
Max, while I appreciate your comments and reading the blog, you are incorrect on a few items in your response. I didn’t leave Hyatt and neither did Matthew, we both re-qualified. In addition I qualified for top-tier status at Hilton, SPG/Marriott, IHG, and Best Western so I am having a hard time understanding how I can’t imagine “the real elite people’s life” when I spent three times the days in hotels last year that you did.
Be honest with me, are you autistic? “Real elite people” yet you have time to read and comment on a blog about points…
You also left off Rome in your “big cities” list… how can they justify not having a presence there?
You’re not even a good troll.
They lost me because I had a stay booked over NYE’s and was told the nights would count in 2017. They didn’t. So I closed the year at 58. When I complained. Sorry that’s too bad you got bad information. Really? I already was booked in for 35 night for 2018. Ok I guess we are done then Hyatt. No need for to go pass 30.
I called and sent another email. I was met with a better response. No problem, we will correct this, we value you. And then I got an email saying I actually stayed over 70 nights, including awards so I qualified for a bonus.
Hmmm
You hit it on the head. You shouldn’t have let me get mad in the first place and seek alternatives. Because I did. So who knows what will happen this year.
I just completed 2 stays and the properties went out of their way to treat me well as a globalist. Including an upgrade to the presidential suite.
It’s committing the offense and then begging for forgiveness later that upsets me. Obviously, other elites – lots of them – have decided to focus their energy elsewhere.
The one thing you missed that made requlaifying even harder was the ability to earn night/stay credits from credit card spend.
Noted. Thanks.
New Hyatt opening in Lima. Should be a great property at Cat 4 I have a room booked in October.
@Max. I think you’re wrong. While a focus on the sixty nighter elite market was undoubtedly key to the changes, I believe they may have underestimated the willingness of those with fewer nights to stay in the program, given the dramatically reduced benefits. The discussion among those in that group on various travel sites goes way beyond the usual huffing and puffing and hyperbole usually heard when changes are announced.
I guess I would be considered a medium value guest at Hyatt. Member for 15 or 20 years, 60% the way to lifetime status, requalify through 25 stays most years ( usually around 40 nights, sometimes more). I only stay at Hyatts in Europe, Asia and Australia ( and they are GH, PH, HR, not the cheap places found in the US). So, I’m not a high value guest but not a low value either because I don’t requalify on the basis of credit card promo, double stay credits or nights in the ‘cheap and cheerful’ Hyatts .
I suspect there are thousands and thousands of people in my situation for whom there is now ZERO incentive to stay at Hyatt. For me it’s not a great loss as I have LTP in SPG and top tier in another. Doubt that I’ll return to Hyatt as there is a good alternative in every city.
Hyatt might now be realising that perhaps it wasn’t the smartest move to alienate that medium value group.
Yes, finally – a Hyatt Centric in Lima. But considering that this is Hyatt’s only property in Lima, a city of eight million people, (for comparison Hyatt’s home base of Chicago has a similar population but 19 properties). Two hotels in Buenos Aires, a new one coming to Santiago (because the current one should be leveled) one in Rio that just opened, one in Sao Paolo – these are pathetic numbers for massive cities.
Your article is spot-on. I have about 60 nights per year to allocate over all brands. No Hyatts in many cities I visit mean no chance of top tier status. I get it – Hyatt doesn’t want me anymore. It’s a free country! After many years as a diamond, I am done. I tasted SPG platinum and I like it. Adios, Hyatt!
Maybe I will see you at a W or the St. Regis.
You hit the nail of your complaint on the head in the first sentence of your 2nd paragraph. This change mostly hit leisure travelers or business travelers with limited visits to areas with a high concentration of Hyatts.
Unfortunately you are mostly guessing, trying to tie the recent change around award nights counting as a desire to increase the number of Hyatt elites under the supposition that all elites are created equal and the ones who are now less motivated to stay at Hyatts are going to drive an income decrease.
Let’s look at the numbers though, while 4th quarter results have not been posted, if you look at the first 3 quarters of the year, Hyatt income increased by 11 Million from 162 Million to 173 Million. The PWC forecast was a growth of around 3%, Hyatt exceeded that by quite a bit so it kind of harpoons your basic argument. Since elite benefits represent a cost, less elites mean less costs, based on financial results it would actually make sense for Hyatt to tighten up on elites even more.
Another thought is the huge push that Hyatt has been doing with Hyatt Place and in some cases Hyatt House. You are now finding Hyatts in cities you wouldn’t normally expect and at very reasonable rates. In general I would rather stay at an HP vs a Hampton or HGI. The upside for elite benefits aren’t as important for guests at those places either.
Personally at least for hotels, I think the importance of elites is overstated by many of the bloggers (maybe because of some self-interest) compared to a well executed strategy.
I appreciate your perspective and assessment, but there is one glaring issue with the financials you have mentioned. Hyatt opened a brand record-setting 47 “Select Service” hotels (Hyatt Place/Hyatt House) in 2017 and almost 100 in total across the business (including acquisitions) in the last year – http://bit.ly/2FomgwE. They increased their overall footprint by 15% but their net income by just 6.7% so I would counter that while they made more money and beat the estimates you included in your comment, they should have blown it out of the water.
Further, if they were more successful with program changes rather than struggling to keep numbers, why would they make any changes at all? Delta (the market leader in program cuts) would go deeper and deeper until they see a drop off in elite numbers, then start to curtail their actions. It appears Hyatt has done the same and is now trying to roll back their expansive requirements to get more heads in beds.
The one portion where we will unequivocally agree is that Hyatt Place/Hyatt House are now much more prevalent than ever before, and per the above attached press release, those two brands now make up more than 52% of the overall Hyatt product. Whether that’s good news for traveling loyalists that used to have to choose a Hampton Inn because of the lack of footprint, or it’s a bad thing because Hyatt now competes in Panama with a Hyatt Place against an Intercontinental, Le Meridien, and Waldorf-Astoria – is in the eyes of the beholder.
Count me among the Diamond/Globalist masses who fled Hyatt after these changes. I went from a multi-year Diamond to precisely zero stays completed or planned this year. Cold turkey.
So far SPG has treated me well as a Platinum, and I don’t foresee going back to Hyatt unless they make compelling changes for requalification. Even then, it may not be enough having experienced what it’s like to be in a program where the hotel footprint is so much larger and more convenient.
Amen BigTex.
U should seriously consider Marriott-SPG. On top of the large total footprint, they also have a far larger PREMIUM footprint than Hyatt –
Ritz Carlton, St Regis, W, Luxury Collection, JW Marriott, Design Hotels, Autograph Collection, Edition, Bulgari …..
I status challenged to Marriott/SPG last year (http://bit.ly/2eWEePl), hit Platinum and have since stayed at a Ritz-Carlton (http://bit.ly/2FR2b2X), St. Regis (http://bit.ly/2hUfNQv), JW Marriott (http://bit.ly/2vhxkuP) among others. I have a review of a W Hotel coming out this afternoon and will stay in Tribute properties later this week. In all I am 24% towards Platinum re-qualification with SPG before the end of January and just 5% with Hyatt.
I have loved SPG which is why Hyatt should never have let me try something else.
ps : I’m speaking as someone who has Hyatt Explorist status who doesn’t care one bit about Globalist
It would be nice to have some statistics on ” elites are leaving”.
Jo – Unfortunately, they just won’t state in a public fashion that their efforts to revamp a program they thought was too rewarding have indeed failed so we have to look to their actions and not their words. However, you could look to Gary Leff’s analysis based on their third quarter earnings call where the chain disclosed that earnings were down 70% year-on-year (http://bit.ly/2DSHOUT) and the CEO’s claim that newly acquired leadership from SPG will make changes going forward. “You can expect to see some changes over the next year as [new leadership] spool up their efforts.” Leff adds, “t’s clear Hyatt’s CEO doesn’t see World of Hyatt as it stands today as being where they want the program to be.”
“Since elite benefits represent a cost, less elites mean less costs, based on financial results it would actually make sense for Hyatt to tighten up on elites even more.”
Elite benefits are a cost that is smaller than the revenues and profits of actually having elites. You are fundamentally misunderstanding an aspect of business: trading a smaller profit (but still a profit) for a steady, continuous stream of profits. Hyatt has far bigger problems than their elite requirements if their analysts are pricing benefits as costing more than revenues.
I agree with your rebuttal to the previous commenter.
Kyle if you did like others have and knocked off 25 stays last Jan before the new terms took hold, Congradulations you are exactly who Hyatt wants to be rid of. Did you do as many did and do 25 C&P at a Cat 1?
Hilton is now giving away Diamond with a new credit card, watch as they curtail their program once again due to Millions of new Diamonds. Why do I get the feeling you wont be doing 75 nights to remain plat with Marriott
Personally I was thinking of doing what you did but after working it out decided against it and Im walking from Hyatt. Sitting in a beautiful suite at a Park Hyatt as I type his, used my last ever DSU and used up my pts before being a reg member. Hyatt will be much better off being rid of the likes of you an dme
Isaac – I did mattress run to secure the status but that wouldn’t represent me very well. For example, in 2016 I logged 26 stays and 44 nights with the brand, pretty close to their 25/50 targets – which of course did not count any award stays. This year (despite my re-qualification through 2018 by completing 25 stays in the first two months of 2017) I ended at 61 nights (without including any award nights). In addition to those I also qualified outright for Hilton Diamond, Best Western Diamond, Marriott/SPG via challenge (25 nights combined), and 110 nights at IHG properties. I would argue, I am an ideal customer if they can get my business, which they had for most of last year. But I no longer go out of my way to stay at Hyatt hotels. My first priority this year is SPG (Hilton is already re-qaulified) then Hyatt and finally IHG (out of necessity, not preference).
Am I the only person who caught “sage” advice in the pizza business, which was baked into this article?
Good work on spicing up this article, Kyle.
I would loved to have taken credit for cooking that up Brian, but sadly, it was a happy accident not a slice of brilliance.
I suspect that statement is only parsley true, Kyle…
Confirmed Suite Upgrades.
That is all. Until someone else can guarantee my family a suite for the price of a normal room for 4-8 days. It’s all Hyatt. That is the differentiator for so many of us with families who stuck with Hyatt.
I frankly don’t care about the rest. I can easily do 60 nights and I get suite upgrades which I’ve used at all but 2 of their category 7 hotels and several of the 6s as well.
I agree to a certain extent, but if SPG or Hilton (who has been making positive changes and is also in a leadership switch over) added the benefit, would there be any reason to pay more for Hyatt properties over SPG or Hilton?
I read 11% of this since it was 89% too long. Why should Hyatt give out so many benfits to those who stay 25 nights. 60 is the correct number for be benfits you get. Greedy f-faces on this forum
Ryan, since you seem to like statistics, let’s try out a story problem. If Hyatt believes their brand of 739 hotels are on par with Hilton (5,000+ properties), IHG (5,000+), Marriott/SPG (6,000+) then relatively speaking it should only take 10 nights to qualify for top tier status 10.39 nights/year to qualify for top-tier status. If you say their benefits are better, that’s fair enough, but they aren’t 6x times better, nor… oh why do I bother, you’ve already stopped reading.
Best reply ever lol
“This was met with uproar from many Hyatt Diamond guests who go out of their way to stay at Hyatts when Marriott/SPG, Hilton and IHG tend to be less expensive and more widely available.”
I have no real dog in this fight, as someone who mostly sticks to Hilton but doesn’t travel enough to ever get top tier status anyway. But this statement really hits the nail on the head. In pretty much every market I’ve stayed in, full-service Hyatts demand a premium price over the competition. Some markets are more egregious than others (don’t get me started on the larceny Hyatt tries to get away with in Bangkok for example). Yet, as a prospective customer, I really can’t find a reason to justify throwing thousands of extra dollars a year to the brand based on what WOH currently offers. That’s a problem.
To quote you sir, “Yet, as a prospective customer, I really can’t find a reason to justify throwing thousands of extra dollars a year to the brand based on what WOH currently offers. That’s a problem.” It looks like the elites have reached the same conclusion and Hyatt is trying to do something about it, but it still feels like too little too late to me.
I think it’s clear Hyatt screwed up on a number of levels but to me the largest by far is the near-total lack of mid-tier benefits. I only re-qualified as Explorist after the changes, and it is worthless to me, frankly, to even attempt another year of qualifying at that level. Anecdotally, I have had conversations with a number of people who used to be Hyatt loyalists who feel the same.
I already get SPG/Ritz Carlton/Hilton gold through Amex, and my experience with SPG recently in particular has been more noticeably positive than any benefits I have seen from Explorist with World of Hyatt. Their footprint is also far more useful to me (coincidentally just came back from Peru where Starwood has a number of fantastic properties and as you point out Hyatt has none!) Hyatt should have made their program generally more attractive that their larger competitors, not less. I can’t see them getting back the the kind of loyalty they used to have.
They seemed to have taken a program that everyone was perfectly happy with, gave the top-tier status away for free in anger (after losing out on the Starwood deal) then had to reverse the explosion in number of elites by punishing their long time best customers and adjusting the earn rates. Consider that even Hilton (who require 60 nights for Diamonds) still allows earning of 30 stays or 60 nights and have 8x the coverage.
Please don’t tell me that anyone at Hyatt is surprised that the elite members have fled. The changes in the program seemed explicitly designed to drastically reduce the number of Diamond members. I was perhaps a 10-year Diamond and when the changes were announced I basically quit staying at Hyatt properties. Then they got me with the credit card renewal offer of 20 nights in four months, when I had already requalified for SPG Platinum (and Marriott and Hilton.)
The current Diamond qualifying criteria seem optimized for two groups of customers: People who buy a lot of suites and very expensive stays (100,000 base points=$20,000 in spend). And people like consultants, accountants and certain construction workers who spend 12 weeks a year on the road in cities with a Hyatt House or Hyatt Place.
What they miss is people who travel sporadically for a day or two in a variety of cities – which can be a mix of business and leisure travel. With Hyatt’s footprint it is pretty darn hard to give 60 nights to Hyatt. The mid-tier is hardly worth it. Frankly SPG or SPG plus Hilton Gold is simply a better set of elite status to have for such travelers.
I also miss the benefit cutbacks to Diamond. No more 1000 welcome point bonus or bonus if the lounge is closed. For stays at HH and HP, there doesn’t seem to be anything I get beyond a bottle of water (some places are explicit – one bottle!) I have about 25 stays since the new program rolled out and I have received exactly zero suite upgrades. I get them far more often at SPG and even Hilton. I haven’t pushed the issue at Hyatt at check-in, but I expected some surprise and delight, and it has not happened, so the delivery of the suite benefit, in my experience, is non-existent.
Diamond was a great program and I don’t know why they had to break it. I think whoever manages loyalty must be totally tone deaf. I don’t put this on Jeff Zidell because I think he was forced into it.
If the problem was too many status matched elites, that would have sorted itself out within a year.
I think Hyatt needs to return to something like 30 stays/50 nights as the Diamond criterion in order to be attractive to the sporadic, itinerant business traveler, and not just to the traveling consultant and suite-staying sheik.
I think you hit the nail on the head. I covered their erratic behavior in this post (http://bit.ly/2vBGcYm) and I agree that it seems like people were making decisions about the loyalty program above Zidell’s head and maybe that explains his departure. When you consider the issue of the SPG knee jerk status match that was opened to everyone, and then instead of letting those temporary elites die off (as you suggest and I concur) they radically dismantle aspects of the program that didn’t need an adjustment. I do think that the confirmed suite upgrades are the best hotel benefit in the business and SPG has not had as much success and requires many more nights to achieve it. But to say that someone who travels for work and pays the Hyatt premium on 25 individual stays doesn’t deserve the same status level as someone doing the same at an SPG property or (slightly more) at Hilton is absurd. To go to 30 stays or 60 nights would be absolutely fair given the benefits they offer and the limited footprint, but making exceptions to allow everyone in that should one anyway doesn’t foster loyalty.
Maybe Hyatt wanted to drop leisure based elites, but I’m sure they will be second guessing the decision. I qualified on stays last year. I had a small number of business trips and many one night stays near the airport to qualify. The major cost to them was 3 or 4 free breakfast at higher end hotels. I’m guessing my 30 nights might not be a high priority to them, but really it didn’t cost them too much to earn my business. When they do the cost benefit analysis on their new program, I imagine they wont like the results.
I’m sure they wanted to weed out what they felt were unnecessary or unearned elites, but they they threw a lot babies out with the bath water. I discussed in another meandering post about elite benefits that suggesting breakfast was too expensive was a short sighted reason to justify expulsion. While it may say $30 for the breakfast buffet on the menu, there is between $3 and $5 in true cost for a few eggs, some bacon, toast, pancakes and fruit. And that’s at retail prices. But of course if you didn’t feel like you were getting a $30 breakfast maybe you would have stayed somewhere else, and that room would then have gone empty. Their $3 in cost could cost them (at minimum) $50-100 in revenue) so becareful how cheap you get with guests that have disposable income and the power to choose any hotel they want.