Trying To Add Perspective To Recent Changes In Hotel Loyalty

I’m a bit behind reporting on the recent changes to the Hilton program that broke yesterday.  I saw the e-mail when it came out but a crazy schedule pulled me away from banging out a quick post on the info.  And, I wasn’t a big fan of the Hilton program before the devaluation.  But, I do think it’s worth considering the industry as a whole and take some educated guesses on where we’re heading.

But first, the Hilton changes. View from the Wing has a ton of detail about the changes, so I’ll only offer a brief summary. It’s worth noting that while there were pockets of value in the Hilton program, the number of points needed to redeem for a room in most of the mid-tier categories was less than spectacular. Hilton has lots of opportunities to amass points but for someone who likes to travel to the nicer properties (yup, that’s me) it wasn’t cost effective to work towards those awards.

The biggest changes were spreading the current chart from 7 categories to 10. That means the properties that used to be 50,000 points a night are now as much as 95,000 for high season awards. Gulp!

Wandering Aramean did a great job digging deeper into the comparison between Hilton’s changes yesterday and Marriott’s recent changes. And, that’s what got me thinking about the overall picture.

Where are we?  Hilton, Marriott and Priority Club have all seen what I would consider to be significant negative changes over the last couple of months. All of these programs had sweet spots and some still do. But, suffice it to say I’m pretty happy being a Hyatt Homer^TM right now.

Some have decried Starwood’s recent changes to their cash and points awards but I think they’re relatively minor in comparison to some of the recently announced changes at other programs. I also think it’s important to consider the improvements Starwood made last year, adding tiers to the program so they can reward people who stay more than the minimum nights/stays required to achieve Platinum.

I’d call those two a wash, which makes Starwood’s announcement of category changes today the deciding factor.  First, let me say I always applaud a program for letting people know ahead of time.  Hyatt did this recently with their changes.  There’s nothing more frustrating than working hard towards an award or benefits only to have them change before you can take advantage of them (yes, I’m looking at you, United).  I’m going to break down the changes to the SPG program in more detail in a separate post, but suffice it to say I wasn’t appalled by the changes.  But, given the changes to award categories along with Cash & Points, I’d view SPG as a slightly less valuable program in 2013 thus far.

That leads us to Hyatt.  They had their own category adjustments, but it amounted to a grand total of 17 properties, of which only 7 went up in category.

They did eliminate a few awards earlier in the year and I was a little bit critical of how they handled it over the long-term, but I actually do believe them when they say they have improvements coming.  And, I think they’re spring promo is at least as strong as the competition.

That’s why I was a bit surprised to see some fellow mileage junkies heaping criticism on Hyatt for what they termed complacency on the part of the Gold Passport folks.  Here’s the way I see it (from a biased perspective, no doubt).  All Hyatt did for me lately was:

Keep the price of redemptions reasonable for 2013.

Give me ample notification of those changes.

Awesome implementation of benefits. In mid-2011 Hyatt gave all Diamond members a confirmed 4pm check-out benefit, not subject to availability.  Not like Starwood, where more often than not it’s class warfare to get a property to honor a 4pm check-out, Hyatt asks me if I need the late check-out pretty much every time I check-in.

Solve a nagging problem with the posting of points by awarding me a 50% bonus when they don’t post regularly.

Add some great properties to give me more places to burn those Gold Passport points.  Here and here and here and here. Oh, and here.

Increase the value of their co-branded Visa card.

They awarded some of their loyal customers 50,000 airline miles, just because.

And, for that, some people are upset.  I feel like I’m a pretty good Hyatt customer, with almost 100 paid nights last year.  I didn’t get the 50,000 points and I feel just fine because I wasn’t entitled to them.

The consistent delivery of benefits by Hyatt makes them top of the heap in my book.  Am I hoping for more?  Absolutely.  I wouldn’t be a mile junkie if I didn’t.  But, I’ll take firm delivery of benefits over broken promises every day.

The loyalty landscape has changed quite a bit over the last 5 years.  The economy has gotten progressively better, room rates have risen as have occupancy.  Everyone always wants more, and who can blame them?  But, the reality is that there’s less need for hotel chains to incent incremental business if hotels are full.

Now, don’t get me wrong, frequent guests are the life blood of the hotel industry.  But, I think the time is quickly coming where hotels will continue to reward the highest revenue customers more richly than someone that has 25 one-night stays at a limited service property.  If that limited service property had an occupancy or rate issue, then it makes sense for them to encourage customers to stay.  And, we’re seeing lots more local and regional promotions inside the major chains which I think support this approach.