An anonymous Reddit user shares what are reportedly some upcoming changes to the World of Hyatt program. Usually I wouldn’t give this much attention to rumors, but this is very detailed, and quite frankly, none of these changes are particularly surprising. So I’m inclined to believe that they’re correct, but who knows.

In this post I’d like to cover the rumored changes to award pricing, and then in a separate post, I’d like to cover the rumored details of a new premium credit card.

Rumors of World of Hyatt award pricing changes

World of Hyatt may be planning significant changes in the near future, particularly impacting award redemption rates. Let me share what’s being rumored, though I’d like to emphasize that I have no inside knowledge here, and this hasn’t yet been confirmed.

Obviously the intent behind these changes is to improve the economics of the loyalty program for Hyatt. This includes creating pricing elasticity at the very top end of the portfolio without abandoning the award chart, and also to limit the cost of award redemptions at limited service properties during major events.

World of Hyatt plans Category 9 & 10 hotels

World of Hyatt has an award chart, and currently, properties top out at Category 8. The plan is reportedly for Category 9 and Category 10 hotels to be introduced:

• Category 9 hotels will cost 50,000 points per night over standard dates (45,000 and 55,000 points over off-peak and peak dates), and Category 10 hotels will cost 60,000 points per night over standard dates (55,000 and 65,000 points over off-peak and peak dates)
• There will be a meaningful reshuffling across what is currently Category 6-8 properties, with many major metro Park Hyatt properties that are already Category 8 moving up to Category 9 (Milan, Paris, Tokyo, etc.)
• Category 10 isn’t intended to be used broadly, but instead, will be for a very small number of high demand properties, like the Park Hyatt Kyoto
• The expectation is that Category 9-10 will almost exclusively have Park Hyatt properties, and “there is a strong internal push to further elevate Park Hyatt as the true super premium flag within the portfolio,” and “the upper tier award bands are being used in part to reinforce that positioning”

World of Hyatt plans super peak award pricing

World of Hyatt is the only major hotel loyalty program to have an award chart at this point, though it sounds like there will be a new type of award pricing introduced. The idea is that there will be a new “super peak” redemption rate for select service brands, including Hyatt Place, Hyatt House, Caption by Hyatt, etc., during very high demand event periods. Each property will be capped to 10 nights per year where this super peak pricing applies.

Currently, World of Hyatt redemptions fall into off-peak, standard, and peak. So instead of being capped at the traditional peak pricing, during these periods, points will be worth a fixed 1.5 cents each, until they reach the peak pricing of two categories higher than the hotel’s assigned category.

For example, a Category 3 Hyatt Place property that’s retailing for $450 during a major event could cost up to 23,000 points per night, which reflects Category 5 peak pricing, and that remains below what a strict 1.5 cents per point calculation would otherwise produce (30,000 points per night).

World of Hyatt plans free night award improvements

Currently, World of Hyatt issue free night awards (both through credit cards and the Milestone Rewards program), most commonly for Category 1-4 and Category 1-7 properties. Changes are planned to these:

• Category 1-4 free night awards will become Category 1-5 free night awards
• Category 1-7 free night awards will become Category 1-8 free night awards

We’re also expected to finally see a top-off functionality for these awards:

• Explorist members will be able to top off a Category 1-5 free night award up to a Category 7 free night award
• Globalist members will be able to top off a Category 1-5 free night award up to a Category 8 free night award

Interestingly, the cost of a top-off is going to be based on the difference between the number of points required and the standard pricing band for the category of the certificate.

My take on these rumored World of Hyatt changes

Again, let me emphasize that these are all just rumors, so we’ll see how this plays out. However, given how specific they are, I’m inclined to believe that they’re true (I’m just curious who has access to this info and is leaking it!).

So, what’s my take on these changes? I’ve gotta say, I’m not surprised if these changes end up being true, as they’re quite rational in the overall context of the economics of hotel loyalty programs. When Chase and Hyatt recently expanded their partnership, Hyatt highlighted how it intends to maintain a fixed award chart.

That’s good news, though of course from a business standpoint, the key is figuring out how to limit costs associated with the most costly redemptions. The most costly types of award redemptions for hotel groups are when properties would otherwise be full, in which case hotels are reimbursed at close to the average daily rate.

So these changes very much address that, both at limited service properties during peak periods, and also at luxury properties during busy periods, which are the two most expensive types of redemptions for the program.

Make no mistake, I’d consider these to be negative changes. I am at least happy to see that Hyatt finally plans to “inflate” the free night awards a bit, and also add a top-off functionality. Those are both things that are long overdue, in my opinion, given how the landscape has evolved.

The silver lining is at least that Category 10 is expected to be limited to very few hotels, possibly only one or two at the beginning. Then again, the same thing was initially said about Category 8 when that was introduced years back, so…

Bottom line

While this is just a rumor as of now, it appears that World of Hyatt is planning major changes to award pricing. If these details are to be believed, we’re going to see the introduction of Category 9-10 hotels, which will top out at 65,000 points per night. We’ll also see the introduction of super peak pricing at limited service properties, for periods with very high demand.

While the above is bad news, the good news is that free night awards will be getting a bit of a category boost in light of these changes, and we’ll also finally see the ability to top-off awards.

We’ll see if this all ends up looking as expected, but these are definitely some major changes.

What do you make of these rumored World of Hyatt changes?