It’s not unusual to see hotel loyalty programs adjust which hotels belong in which categories every year. For example, just last week Marriott Bonvoy announced their 2020 hotel category changes, and now World of Hyatt has announced their 2020 category changes.
Keep in mind this isn’t the only change being made to World of Hyatt redemptions this year, as Hyatt is also introducing peak and off-peak redemptions as of March 22, 2020 (the exact date for that being implemented has just been announced).
World of Hyatt 2020 category changes
World of Hyatt has just announced their 2020 category changes, which kick in for bookings made as of Sunday, March 22, 2020 (specifically at 8:00AM CDT). Note that:
- Bookings made prior to the changes will be honored at the old rates, though if you make any changes to those bookings you’ll have to pay the new rates
- If you make a booking prior to the changes at a property going down in price, you’ll proactively be refunded the difference in points starting March 22, 2020
No new categories are being added, and the number of points required at each category remains unchanged (not accounting for the introduction of peak and off peak dates). All that’s changing is which hotels are in which categories.
As a reminder, here’s Hyatt’s award chart reflecting the new peak and off-peak pricing (which will go live the same time as these category changes):
How many Hyatt hotels are changing categories?
In 2019 we saw an unprecedented number of hotels changing award category. Last year 259 hotels changed categories, with 130 shifting to a higher category, and 129 shifting to a lower category.
With World of Hyatt’s 2020 category changes, we’re seeing 217 hotels shift category:
- 117 hotels are shifting to higher categories
- 100 hotels are shifting to lower categories
All things considered I guess that’s not quite as bad — we’re seeing fewer hotels shifting categories than last year, and that’s not even accounting for the huge number of hotels that World of Hyatt has added to their portfolio (both through Small Luxury Hotels of the World, and through their Two Roads Hospitality acquisition).
On the surface the changes don’t sound that bad, given that we’re only seeing a net increase in redemption costs at 17 properties.
However, you can bet that the properties going up in price are a lot more popular with those redeeming points than those going down in price. That’s the name of the game with these changes.
How does Hyatt decide on these category changes?
Hyatt says that these hotel category changes are based on “current market conditions.” In reality I think it’s safe to assume that the categories are based on how much redemptions are costing Hyatt at particular hotels.
Keep in mind that most Hyatt hotels are mostly independently owned, so Hyatt’s loyalty program has to compensate individual hotels for each redemption. As a general rule of thumb, here’s how it works:
- When the hotel isn’t full, the loyalty program compensates the hotel at some reimbursement rate that’s slightly above the marginal cost of servicing a room, etc.
- When the hotel is full (think 90-95%+ occupancy), the loyalty program compensates the hotel close to the average daily rate, in recognition of the fact that the room may have otherwise been sold
For example, if a hotel has high rates but low occupancy, it might be in a disproportionately low category. Meanwhile if a hotel has lower rates but consistently high occupancy, it might be in a disproportionately high category.
It’s all about World of Hyatt’s redemption costs.
Which Hyatt hotels are changing categories?
You can find all the World of Hyatt hotels changing categories as of March 22, 2020, at this link, sorted by region. Beyond that, I wanted to share some highlights below, as I see them:
Lots of SLH properties join Category 8
Hyatt has a partnership with Small Luxury Hotels of the world, and when this was introduced, Hyatt also added Category 8 award pricing. Fortunately this hasn’t spread to any Hyatt managed properties.
We are seeing a total of 13 SLH properties move to Category 8, though, including 10 in Europe and three in Asia.
The Nobu Marbella is becoming a Category 8 hotel
Five Hyatts join Category 7
Category 7 remains the highest category for Hyatt managed properties, and we’re seeing the following five hotels move to Category 7:
- Carmel Valley Ranch
- Hyatt Centric Key West Resort & Spa
- Andaz 5th Avenue
- Hyatt Centric Park City
- Grand Hyatt Tokyo
Ouch. That means the Park Hyatt New York and Andaz 5th Avenue are now priced the same, just as the Andaz Tokyo and Grand Hyatt Tokyo are now priced the same, even though paid rates are generally vastly different.
It looks like no Hyatt managed properties are moving from Category 7 to a lower category.
The Andaz 5th Avenue is becoming a Category 7 hotel
Some key Category 4 changes
Category 4 is a pretty important one for Hyatt, given that Hyatt issues Category 1-4 free night certificates.
- You can earn a second Category 1-4 free night certificate when you spend $15,000 on your card during your cardmember year
- You can earn an additional Category 1-4 free night certificate when you earn World of Hyatt Explorist status (which requires 30 elite qualifying nights or 50,000 base points in a calendar year)
- You can earn an additional Category 1-4 free night certificate when you stay at five different Hyatt brands; this is an ongoing promotion that launched on March 1, 2017, and it’s based on the cumulative brands you stay at, and isn’t tied to the calendar year
That’s why it’s worth highlighting a few of the hotels that are moving into and out of Category 4.
Here are some of the key hotels that are moving from Category 4 to Category 5:
- Park Hyatt Zanzibar
- Park Hyatt Saigon
- Grand Hyatt Doha
Here are some of the key hotels that are moving from Category 5 to Category 4:
- Hyatt Centric Brickell Miami
- Grand Hyatt Seattle
- Hyatt at Olive 8 Seattle
- Hyatt Regency Amsterdam
- Hyatt Regency Sydney
- Park Hyatt Melbourne
The Hyatt Olive 8 is becoming a Category 4 hotel
Hyatt is changing the categories of 217 hotels as of March 22, 2020. This also coincides with when they’ll introduce peak and off-peak pricing.
Obviously whether or not these changes are good depends on your specific redemption patterns, though on the whole you can expect that the properties that are most redeemed at are going up in price.
What do you make of the Hyatt 2020 category changes? Are there any hotels that stand out to you?