Is Hyatt Keeping Hotels Honest With Award Space?

I find myself frequently telling people who ask for advice that they should treat their miles and points like money.  They really aren’t miles or points, they’re just a different currency.  And, it’s a fiat currency at that, where you’re trusting the airlines and hotels to maintain some sort of relative value to those points.

Trust is a big key in the loyalty space.  These programs earn your business by promising you something in the future.  Don’t follow through on that promise?  They may lose your future business.  I think trust is the most valuable commodity a program offers, much more valuable than miles or points.  That’s why it was disappointing to see reports from some bloggers about hotels in the Hyatt system that had effectively found ways to offer no standard award rooms for redemption at all.

These were hotels that effectively had found ways to modify how many standard rooms they had in inventory to lower them to zero or virtually zero.  Hyatt (and their main competitors) offer standard award rooms with “no blackout dates”, something SPG pioneered many years ago.  But, unlike SPG, Hyatt doesn’t offer most of those other room types at variable point totals.  I think this is a big benefit for SPG, and the effects at Hyatt are exacerbated when a hotel doesn’t have many standard rooms for loyalty members to redeem their points (or artificially lowers how many they have).  I had to wonder just a bit, was Hyatt keeping hotels honest?

That’s why this post by View From the Wing a few days ago was so interesting to me.

I spoke with Jeff Zidell, Hyatt’s Senior Vice President for the Gold Passport program, about these issues.

He began by acknowledging the issue with awards at the Hyatt Regency San Francisco, where the hotel was making standard rooms available only as part of ‘packages’ (such as with breakfast or parking included) and not at the Hyatt Daily Rate — and thus not for points stays.

This isn’t the way it’s supposed to work, Jeff had already researched this issue and reached out to the person responsible for revenue at the hotel. In fact, he reached that individual in Dubai at 11pm local time there. He was committed to getting things fixed right away.

Frankly, I would have been surprised if the answer was anything but this.  While I’ve only been a hardcore Hyatt guy for about 5 years, they consistently strike me as delivering on what they promise (and, frequently delivering more than what they promised).  But, the actions of other programs in the past where they deliver less than expectations or change rules on the fly weighed in the back of my mind.

Some of these recent reports may be renegade hotels trying to squeeze some extra revenue out of their inventory.  I spent a number of years in the hotel industry and understand that revenue management is something hotels pour an incredible amount of time into.  In the face of higher occupancy, the levers a revenue manager would be pulling have a lot less to do with getting empty rooms filled and much more to do with squeezing every last dollar out of the people showing up to fill the hotel.  Award rooms take away from that to some degree, although I’m fairly certain Hyatt hotel owners get a higher rate for award rooms when they approach a sold-out situation, something SPG also pioneered.  I certainly don’t think the current issues at a few isolated Hyatt hotels rises to the level of the Parker Meridien scandal SPG had a couple of years ago.

I’m glad to hear Hyatt Gold Passport is aware of the issues and proactively working with properties to head off problems before members see them.  And, I even managed to find a non-standard room available for award redemption.  I had a Hyatt House stay two nights ago where I wanted a 2-bedroom unit since I was traveling with my family.  An agent on the Diamond reservations line was able to redeem a few more points to get me the 2-bedroom unit I requested.

No program is perfect, but I’ve been lucky enough to get to know the folks at Hyatt through various industry events like MegaDOs and Freddie Awards.  They’ve always struck me as honest operators and these latest comments by Jeff strike me as a continuation of their effort to deliver promised value to their members.

3 Comments

  1. While I trust Hyatt corporate, I think that this was not just one rogue hotel. The trend with Hyatt properties is to treat higher paying guests the best and do everything possible to eliminate award stays and lower rates. It’s shady and very customer unfriendly. My understanding of the SPG Parker Meridien was that they were not blocking award stays but inflating their numbers to increase the payments from SPG. It was fraud and false claims. This is VERY different than blocking award stays for consumers. In 5 years as an SPG Platinum I have never not been able to find a standard room using points (if the hotel is not sold out). I have been burned by many Hyatt properties because of the inventory tricks that they play.

    1. A, it’s certainly more than one hotel, I’ve seen a handful of reports. However, I’ve never had an issue redeeming points for a standard room. I think calling this a widespread problem isn’t an accurate statement. The SPG issue was LPM creating fake award reservations that the hotel got paid on in sold out or virtually sold out situations. It was definitely fraud, and it also took award rooms away from members on nights when they “sold out” the hotel and finished off the last few rooms with fake award rooms. While this might not be exactly the same thing, I had issues at LPM in Manhattan getting them to honor SPG benefits frequently, including award nights and upgrades.

  2. I’ve hit way to many hotels for it to be a few rogue hotels. I am not saying that Hyatt corporate is doing it, but I do believe that despite their words they are not enforcing or monitoring their hotels properly. The problem seems to be rampant, not a few isolated hotels.

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