Loyalty programs are big businesses, and they can be lucrative both for travel brands and consumers. As you might expect, this also means that the loyalty industry has quite a bit of fraud from many parties. This is definitely more rampant and organized in some markets than others.
Along those lines, a FlyerTalk member wrote a fascinating post about how a Hyatt affiliated property in China was reportedly running a scam in order to sell elite status and points, and it has backfired for program members, who took advantage of it. Let’s examine the claims, and talk about this a bit.
In this post:
Hyatt UrCove property sells status without staying
Someone with the username Yaledan has just joined FlyerTalk, and wrote quite a post. Let me just share the claims in full, because they’re quite something:
Recently, over 2,000 Hyatt accounts were permanently closed in China, many belonging to top-tier Globalists, including Lifetime Globalists and corporate clients. This sweeping action was triggered by a unique hotel brand in China, UrCove, which officially sold packages that allowed customers to earn points and nights without actually staying. They even provided official invoices for these transactions.
Hyatt’s response has been extreme and, frankly, harsh. Instead of investigating the hotel’s practices, Hyatt decided to indiscriminately shut down the accounts of everyone who earned points at these properties. No matter if the points were earned legitimately or not, even members who actually stayed were banned without proper investigation or explanation. Hyatt instructed affected members to contact the hotels, but members were then redirected back to Hyatt, creating a frustrating cycle with no resolution.
What’s most concerning is that Hyatt has not allowed for any explanations or appeals. If your account had any points manually credited from an UrCove stay, your account was closed. This heavy-handed action has left members shocked, fearful, and uncertain about the future of the loyalty program.
Hyatt’s handling of this situation has been extremely unethical. The hotel violated the rules by selling these non-stay products, yet Hyatt Group failed to monitor or control the situation. Instead of holding the hotel accountable, they chose to punish the members—a rare and cruel response.
For members in other region, this should serve as a reminder that even practices like mattress runs could lead to sudden account closures, without transparency or fair warning.
Let’s hope Hyatt addresses this situation fairly, as it’s already causing significant unrest in China.
Let me just emphasize that while I’ve heard of some other specific loyalty scams in China, I have no firsthand knowledge of this one. So I’m opening this up to OMAAT readers, because I sure am curious. Does anyone have the details of this, like how expensive these packages were, how many elite nights they included, how the hotel marketed them, etc.?
For those who may be confused by the scam here, let me explain to the best of my knowledge. UrCove is one of Hyatt’s newest brands that’s specific to the China market. It seems that one “entrepreneurial” property found a creative way to generate some “bookings.”
The hotel sold packages to consumers that awarded points and elite qualifying nights, without guests actually staying, to give members a good value opportunity to earn status. The hotel even provided official invoices for these “stays.” So presumably in its internal system (for the purposes of World of Hyatt credit), the hotel tried to make it look as if guests were actually staying.
For those wondering why this is an issue:
- You’re only supposed to actually be credited for a stay if you stay (or at least check-in), as phantom stays aren’t supposed to be allowed
- I have to imagine that the hotel was selling incredibly low rates; hotels don’t pay Hyatt directly for crediting members elite nights, per se, but instead Hyatt takes a cut on revenue
If the hotel had done this on a small scale, everyone would’ve probably gotten away with this. I remember back in Hyatt’s Faster Free Nights days, there were some people who knew the sales manager at their local Hyatt Place, and they’d negotiate a cheap rate, and that sales manager would allow “phantom” stays, and manually check them in. I didn’t do this, for the record, since I was happy just staying at my local Grand Hyatt, which was cheap.
It wasn’t within the spirit of the program, but we’re talking about a few people doing it at a particular hotel, so it flew under the radar. But when a single hotel is literally selling packages to thousands of people, Hyatt will catch on.
My take on this alleged situation
The poster’s version of what happened is interesting on a few levels.
- They write it as if they’re just an independent observer with no skin in the game, when I suspect they may have been involved here
- They claim to have a suspicious amount of information, and I wonder how they reportedly have that? How do they know 2,000 people were involved? How do they know that Hyatt hasn’t punished the hotel, rather than just World of Hyatt members?
- They state that people have been banned even if they didn’t do anything wrong, and just had stays credited manually, which again, I wonder where that information comes from
- This version of events is just incredibly dramatized, like saying that this is “already causing significant unrest in China” (lol?) and calling Hyatt’s handling here “extremely unethical,” while not assigning any blame to the poor souls who who took advantage of this
This is purely speculation on my part, but my guess is that Hyatt is very much holding the hotel responsible here as well, if this is all as claimed.
With that in mind, is Hyatt acting unethically here, by banning those involved? Obviously we only have one side of the story, but I’m going to tentatively side with Hyatt here, and assume the hotel group is handling this the right way.
For one, those who took part in this presumably knew exactly what they were doing, as I imagine this was discussed widely in online communities in China. If they didn’t know, then they should have read the program’s terms & conditions more carefully. Saying that “Hyatt Group failed to monitor or control the situation” doesn’t mean that the other party doesn’t get any blame.
I will say that for the most part, airline and hotel fraud auditing departments are really, really good at what they do, and they almost always get things right (there are some programs that are exceptions, but World of Hyatt isn’t one of them).
The whole “there’s no appeal process” thing is kind of silly, because the appeal just typically consist of the person lying about what they did. I can’t count the number of times over the years I’ve received emails where people say “help, X program shut down my account, but I did nothing wrong.” And then a dozen emails later, the truth finally comes out.
With so many of World of Hyatt’s rewards being transferable nowadays, I commend the program for cracking down on those who aren’t following the rules. After all, some elite perks are a zero sum game, so these people earning rewards through these means are potentially taking away from other members.
Bottom line
There are some interesting claims online about how a UrCove property in China has been running a pretty profitable side hustle, at Hyatt’s expense. The hotel has reportedly sold packages for a certain number of elite nights and points, and would then presumably do “ghost” check-ins, while billing a low rate.
With Hyatt having caught on, thousands of people have reportedly been banned from World of Hyatt. While the claim here is that Hyatt is acting unfairly and unethically with how it’s handling this situation, I think it’s probably doing the right thing (in addition to hopefully holding the hotel responsible).
What do you make of this situation? And does anyone have more background on the which hotel is involved, and the cost of these packages?
Lifetime Globalist here who had a one night stay at urcove. Points didn’t automatically post (all stays checked in after 12am will not post automatically ). Had to get Hyatt to retro the stay. This was Q4 2023.
Account was banned late sept, with no explanation or communication from Hyatt. Wrote to consumer affairs with no avail. Account was recovered after 4 days, with no communication either…..I consider my case a good dp on Hyatt’s poor communication
Anyone who stays at a Hyatt in China should not give the hotel their loyalty number or create a parallel account in China. When there is one and there many. You never know by staying at a Hyatt in China, your account and points would be gone.
Is it really considered a backfire?
Innocent members are likely affected too. The implied excuse is if you stay at a corrupted chain, you are a supporter?
Just like claiming to attack terrorists but innocent children are labeled terrorist supporters.
I don't think it backfired, it's more like firing back randomly at a targeted area.
Collateral damage is minimal because they are all supporters.
I guess Pritzker family is running Hyatt like how "B"...
Is it really considered a backfire?
Innocent members are likely affected too. The implied excuse is if you stay at a corrupted chain, you are a supporter?
Just like claiming to attack terrorists but innocent children are labeled terrorist supporters.
I don't think it backfired, it's more like firing back randomly at a targeted area.
Collateral damage is minimal because they are all supporters.
I guess Pritzker family is running Hyatt like how "B" is running homeland.
Given how only 2000 members were affected. I doubt there are any innocent members targeted. If anything, I suspect there are still way more illicit, Chinese scammers out there that have not been banned.
It is too easy to differentiate between regular guests and those who got points and nights credited by those phantom packages. So I dont believe that the accounts that were closed included guests who did not participate in the scam.
Saddest part about UrCove for me is I was on a quest to visit every Hyatt brand (albeit it’s been getting a lot harder with the acquisition stint as I’m not a fan of cheap all inclusives) - but I refuse to visit china again post 2019 so so much for visiting every Hyatt brand lol
The harsh reality is that Hyatt should have avoided getting entangled in an unreconstructed genocidal and illegitimate nation like China (at least until the legitimate Taiwanese government deposes the CCP regime); and having made the mistake of getting involved in the first place, nuking everything from orbit as they've done here strikes me as the least-bad option.
Good that this is being cracked down on somewhere. Marriotts in Asia are having similar problems, to the extent that hotel operators are cutting back due to being over run with elites.
Anyone engaging with this should have known they were running the risk of shutdown
Unrelated to this article. Ben; I hope your family is OK and sheltering somewhere safe in the Tampa area.
Anybody paid attention to the post writer sometimes using singular and the other times plural version when referring to the involved UrCove hotel(s)? If what he really means is plural then it changes the optics of the core issue a lot.
A thought experiment about handling such situations properly: I've booked a hotel for a one night stay once that most likely happened to be an outlet of a money laundering scheme, and I didn't realize this until I was checking out and all sorts of weird shit suddenly happened. They insisted that I'd pay by card and they literally wanted to use my card to take money from 3 different terminals on several separate small...
A thought experiment about handling such situations properly: I've booked a hotel for a one night stay once that most likely happened to be an outlet of a money laundering scheme, and I didn't realize this until I was checking out and all sorts of weird shit suddenly happened. They insisted that I'd pay by card and they literally wanted to use my card to take money from 3 different terminals on several separate small transactions, a fourth terminal was used for deposits in and a fifth one for deposits out. Their explanation: one was for the fee of the stay, one for the service charges and one for the taxes. Having several small transactions to and from different accounts is actually one of the four signs of money laundering. I also noticed the complete lack of other guests and staff, despite the claim that they were fully booked and that I had the last room. That's another sign. And it's in the hospitality business, which handles big volumes of cash. A third box checked. Am I to blame then? Should I go to jail for this? I don't think so... but in case of the FT'er, I would, simply because I was there.
Because according to the FT member, even accounts of people who just happened to stay at the specific hotel were banned and closed. I somehow feel that goes against Lucky's claim of Hyatt handling this properly. If any of this is true to begin with, of course. I'm siding with Ben here on a few points: it's rather odd that some new rando starts with making such detailed and hefty claims on FT in the first place. Can this be a disgruntled (ex-)employee, can it be someone who has beef with Hyatt and tries to discredit them, knowing China does things the Chinese way? Could this be a Hyatt employee leaking a serious case trying to be a whistleblower? A customer who got caught and wants to vent? Or just some attention craving individual with a rich fantasy? We simply don't know. You can be anyone you want on the interwebz, right?
I actually started frowning when reading all these claims, and I can imagine there's more at play here. I think it would be good if a trusted source could confirm or deny any of this. Troublesome point 1: it's China. Troublesome point 2: it's an ugly case, if there even is a case. It'll most likely be covered up as much as possible. So I guess we'll never see or hear much of it, if it ever happened.
Regardless of who's right or wrong here, I do think major corporations should have an obligation for transparency, seeing as Hyatt actively sells points for cash. They shouldn't be allow to say "We deemed x is in breach, therefore all your points are forfeit" without evidence.
„ If your account had any points manually credited from an UrCove stay, your account was closed. ”
Stress on „manually”.
Hotels cheat Hyatt and the other chains all the time. Most of the cheating hotels never pay a price.
This is like Trump's fraud case. Who was hurt? The hotel got money; Hyatt got a percentage of the revenue based on its management, franchising or licensing contract; and the guest got something.
I imagine in some cases the hotel and Hyatt double-dipped because the hotel probably sold a phantom room twice. Maybe that's...
Hotels cheat Hyatt and the other chains all the time. Most of the cheating hotels never pay a price.
This is like Trump's fraud case. Who was hurt? The hotel got money; Hyatt got a percentage of the revenue based on its management, franchising or licensing contract; and the guest got something.
I imagine in some cases the hotel and Hyatt double-dipped because the hotel probably sold a phantom room twice. Maybe that's where they got caught. Selling more rooms on any given night than the number of rooms they had.
Got concrete examples?
Are you really so myopic you can't see how this creates damage?
This greatly increases costs for Hyatt and the hotels by having to dish out free benefits that they shouldn't be needing to.
Customers are the product with hotel loyalty programs. Hotels don't want a bunch of fake elites staying at their properties gorging on free breakfast and getting nonstop upgrades. It also dilutes the brand value for the legit customers because the service...
Are you really so myopic you can't see how this creates damage?
This greatly increases costs for Hyatt and the hotels by having to dish out free benefits that they shouldn't be needing to.
Customers are the product with hotel loyalty programs. Hotels don't want a bunch of fake elites staying at their properties gorging on free breakfast and getting nonstop upgrades. It also dilutes the brand value for the legit customers because the service quality will decrease for them.
It is unclear who you intended to insult, but it is unwarranted as a response either to the first comment or to mine, but feel free to elaborate.
Something about the story does not click. If there is any validity to the basic story, then I do not see how Hyatt does not cut all ties to the UrCove for what would be a major breach of contract, instead of seeming to let the hotel off the hook as alleged.
I also have a hard time wrapping my head around how the scam would work. Doing dummy check-ins would be the easy part...
Something about the story does not click. If there is any validity to the basic story, then I do not see how Hyatt does not cut all ties to the UrCove for what would be a major breach of contract, instead of seeming to let the hotel off the hook as alleged.
I also have a hard time wrapping my head around how the scam would work. Doing dummy check-ins would be the easy part to get away with. What is unclear is how the scammers would get away with awarding numbers of points that do not match the costs of stays actually sold, given that points for a stay should be awarded by World of Hyatt based on sales information that's hard coded in whatever computer system manages the hotel's activities. At least that is how things work at Hilton. Points for every stay are awarded by the Honors program based on sales information retrieved from a hotel's computer system. It is thus unclear how points can be fraudulently awarded unless a hotel also awards the points, which would be unusual.
Nightly rates for various rooms and packages offered by every hotel are hard coded and cannot be tempered with. So, when a booking is done, the total amount a guest will be charged is automatically set, with the only variable costs being the incidental charges that would be added at checkout. Because of that rigid billing structure, I see no way for members to earn points that would not be commensurate with whatever room rate or package they purchased. The scam may work if carried out by an independent scammer. I do not see how a Hyatt hotel would run it and still maintain its association with Hyatt...
What am I missing?
UrCove is a strategic investment agreement with the Chinese state-owned hotel operator Homeinn. I really don't think Hyatt will cut ties with this project and cause a lot of bad blood in China over a localized points scam.
You are assuming it's every UrCove that engaged in whatever happened, which is still full of holes. Hyatt would need to cut ties with one rogue hotel, not the Homeinn...
Lots of them were being sold on taobao (literally AliExpress, as in same company selling largely the same things, but in the Chinese domestic market), something like $20-30 a night. Like I mentioned in your other post about global promotions, the bought nights were stacked with global promotions, PLUS new hotel promos (many of them urCove).
I assume the hotel paid Hyatt a few dollars per night (if even that), while people who bought the...
Lots of them were being sold on taobao (literally AliExpress, as in same company selling largely the same things, but in the Chinese domestic market), something like $20-30 a night. Like I mentioned in your other post about global promotions, the bought nights were stacked with global promotions, PLUS new hotel promos (many of them urCove).
I assume the hotel paid Hyatt a few dollars per night (if even that), while people who bought the nights were given 500 points per night from the Hyatt new hotels promo, plus 3000 points for every 3 nights via the global promo, plus milestone awards and Globalist benefits. I believe they were also selling Globalist status challenges (20 nights to hit Globalist).
I do agree with one thing though, the UrCove clearly wasn't punished. They operated essentially separately, they were never removed from Hyatt's system, and good luck to Hyatt trying to get any favourable legal judgement against a domestic operation if they tried to go the legal route in China (see: Muji trying to enforce their trademark in China).
I doubt very much that it would be mission impossible for Hyatt or any western company to get a "favourable legal judgement against a domestic operation", especially if it is a private domestic company, because fraudsters would give the whole country...
I doubt very much that it would be mission impossible for Hyatt or any western company to get a "favourable legal judgement against a domestic operation", especially if it is a private domestic company, because fraudsters would give the whole country a bad name and dissuade investors. For that reason, the CCP government is much less lenient against fraudsters than western governments...
One doesn't develop properties in China without government connections.
Chinese jail cells are filled with local businessmen convicted of embezzlement or running fraudulent schemes...
UrCove is a Homeinn-Hyatt joint venture. Homeinn is one of the largest accomodation providers in mainland China and very well connected. They aren't going to bin the project because of this.
my guy, the whole country *already has* a bad name; for that matter it's the only sort of name the PRC has lol
That's it. It's clear that you cannot be taken seriously.
G'day.
Might be a repost but couldn't tell if it posted.
From FT : one of the sites found selling easy hotel and airline status
https://millionkm.com/product-category/hotels-membership/hyatt/
Consensus that it has to be an insidejob at certain hotels that allow for impersonation and accreditation. Or at least a system loophole that's exploited.
Well,
I have noted this ebay auction:
https://www.ebay.com/itm/226386911248?_skw=hyatt+mattress+run&itmmeta=01J9SS8GMWT8TW5GK7VK3X44JA&hash=item34b5b62010:g:LP8AAOSwkPNmsiYX&itmprp=enc%3AAQAJAAAA8HoV3kP08IDx%2BKZ9MfhVJKmuwOxZH7bleXJuGo%2FGgWwIRKdR4iBC1F%2FF2bBwgwRsN3cv0cGbiIOFxWuWTLW1ZAXqORBI7HLuAnUhhUlAJCcNgZ%2B0ALL%2BVTBEcFs7kXDpuWHjkjDOqarbSdgUJfmbXtyhRdnPKCNNrV0MDcO1H08iM2S0DYFvw1%2Bnj20VwgVPQnILI2s1tnbNDLjWi7w747d1PjWmu4GtGi071XCvCVdZlN8xJ1HziRohjhG49winzmrQHK6CU17yLa6SRr0rEbcLOFl%2Bl7IfQn0rzi6S7Zn8Fuog8dx04yOGyknhMn9YVA%3D%3D%7Ctkp%3ABFBMwIqiuc5k
I do NOT suggest that anyone buy. I expect that it is a front for phontom stays which vioate terms and conditions and might lead to unpleasantness. Rather, it apears to be a real thing.
It is concerning that member might be susended if they have a 2 or 3 night bona fide stay. I also have to wonder whether any particular property is involved here...
Well,
I have noted this ebay auction:
https://www.ebay.com/itm/226386911248?_skw=hyatt+mattress+run&itmmeta=01J9SS8GMWT8TW5GK7VK3X44JA&hash=item34b5b62010:g:LP8AAOSwkPNmsiYX&itmprp=enc%3AAQAJAAAA8HoV3kP08IDx%2BKZ9MfhVJKmuwOxZH7bleXJuGo%2FGgWwIRKdR4iBC1F%2FF2bBwgwRsN3cv0cGbiIOFxWuWTLW1ZAXqORBI7HLuAnUhhUlAJCcNgZ%2B0ALL%2BVTBEcFs7kXDpuWHjkjDOqarbSdgUJfmbXtyhRdnPKCNNrV0MDcO1H08iM2S0DYFvw1%2Bnj20VwgVPQnILI2s1tnbNDLjWi7w747d1PjWmu4GtGi071XCvCVdZlN8xJ1HziRohjhG49winzmrQHK6CU17yLa6SRr0rEbcLOFl%2Bl7IfQn0rzi6S7Zn8Fuog8dx04yOGyknhMn9YVA%3D%3D%7Ctkp%3ABFBMwIqiuc5k
I do NOT suggest that anyone buy. I expect that it is a front for phontom stays which vioate terms and conditions and might lead to unpleasantness. Rather, it apears to be a real thing.
It is concerning that member might be susended if they have a 2 or 3 night bona fide stay. I also have to wonder whether any particular property is involved here - is Hyatt sufficiently concerned to susoend a franchisee, or is that concern limited to WOH members?
I know back in April there were a lot of people selling hyatt elite nights on Ebay for like $30. I heard stories on facebook of people buying those nights to get Globalist during a 20 night challenge and then having their stays via UrCove, and then having their accounts banned.
How is this any different than certain Marriott franchisees and licensees selling rooms on Airbnb and not Marriott dot com to avoid paying Marriott a percentage of the revenue?
View from the Wing has extensively documented this.
No two words more synonymous than Chinese and scam.
Nah, Indians hold that crown.
That said, I know people who work in major airline loyalty programs, and the three most common nationality when it comes to scams are (in no particular order, depends on program): Chinese, Indians and Americans, almost as if the places with the largest travel markets have the most scammers ;)
From FT:
Someone showed how easy it is to google for Hyatt / Marriott / Hilton etc .elite .status shopping ... even offering airline FFP elite status.
The website
https://millionkm.com/product-category/hotels-membership/hyatt/
Ben - you gotta do something about these Comfort Keepers ads that block the entire screen on mobile and don't have anywhere to click out or close out of the ad. I'm really close to just not opening the site because they've stopped my comment twice now and kept me from reading at least three articles over the past few days. I love reading this site but these Comfort Keepers ads are so invasive as...
Ben - you gotta do something about these Comfort Keepers ads that block the entire screen on mobile and don't have anywhere to click out or close out of the ad. I'm really close to just not opening the site because they've stopped my comment twice now and kept me from reading at least three articles over the past few days. I love reading this site but these Comfort Keepers ads are so invasive as to keep me away. I took a screenshot this last time but unfortunately don't know how to include it in a comment.
I have to agree, the adds have gotten out of hand and are especially obtrusive for mobile users.
If you’re browsing on a desktop, use the AdBlock browser that’s based on Firefox and extremely effective. It’s also available for Android. iOS users should purchase Purify in the App Store. Problem solved, and not just here.
Regular ads? Sure I get it, gotta make money. This is Ben's livelihood and I get that. But if an ad blocks the entire site on mobile mode and there's no way to dismiss it? That's when I just stop visiting. I've only consistently been able to visit here in the past few days on desktop mode on Chrome mobile or with adblock on Firefox and neither is really something I wanna do long term.
"...left members shocked, fearful, and uncertain about the future of the loyalty program." hahaha
Anyways, good for Hyatt. Well done
Yeah, I lol’d at that part too, and the whining about how cruel and unusual Hyatt’s response was. If you read the small print in the conditions of the program it becomes evident that they can pretty-much close your account just because they don’t like the look of you, let alone if you willingly buy into a scam that is defrauding it, and there’s no right to appeal. I have zero sympathy. They took a risk, got busted, now consequences.
I agree - I’d bet $$ the author is a semi-frequent traveler who engaged in this and had their account shut down. They tried to appeal but to no avail as they did participate in the scheme.
Interesting.
I recently stayed at a URCove, and had to have Hyatt get the missing stay added. This process took 3 weeks... wonder if this issue factored into that.
Here's hoping my account remains active!