Hyatt Introducing Peak and Off-Peak Award Pricing

There are certain trends that move through the travel industry.  Revenue-based earning and award charts were the trend over the past few years in the airline industry.  Now, it seems the introduction of peak and off-peak award charts is en vogue in the hotel industry.

Marriott made this plunge recently, to much chagrin.  Part of the teeth gnashing there for me has been the unpredictable nature of Marriott’s award chart.  They rebalance hotels on a monthly basis, so I find myself frequently checking to see if the price of a reservation has gone up or down.

Hyatt Announces Peak and Off-Peak Award Pricing

Hyatt sent me notification of a substantial change.  It’s along the same lines as Marriott’s move to peak and off-peak pricing.  This is not a full move to dynamic pricing.  But, it does add complexity.  Here’s the announcement from Hyatt:

Starting in March 2020, World of Hyatt will introduce Off-peak and Peak point redemption for free night awards. Under this new structure there will be three point redemption values, which will allow members more flexibility when it comes to getting the most out of their points for free nights at more than 1,000 hotels worldwide.

• Off-peak: Fewer points will be required during Off-peak times – starting at 3,500 points per night (the best value when hotels are less busy)
• Standard: Points required during standard redemption periods will follow today’s point requirements – starting at 5,000 points per night
• Peak – When hotels are the busiest, more points will be required for a free night – starting at 6,500 points per night and will be no more than 5,000 points above the Standard point requirement

More to Know

• This new structure will be true for all types of award nights, including free nights in a standard room, club-access room, standard and premium suites.
• Points + Cash awards will also offer Off-peak and Peak rates and will still require 50% of the standard cash rate and 50% of the points required for a free night.
• If a member has an existing award booking for a night that changes to Off-peak in March 2020, they will receive an automatic one-time refund on the point difference. Members will not be charged more if their existing award booking changes to Peak.
• Free night point redemptions will be identified as Peak, Standard or Off-peak as soon as nights are available for reservations (usually 13 months in advance) and will not change once posted.
• Our hotel award categories are not changing and will remain 1-8.

First Impressions

I plan to dig into this a bit deeper.  I have some initial observations and I plan to follow-up with more later:

1. We won’t really know what to think of this change until March when Hyatt implements the changes.
2. It’s highly likely these changes will be bad for families.  I would expect that desirable locations will require more points during popular school breaks, like summer, winter holidays and spring break.
3. It’s also likely that these changes will be a net positive for folks with flexibility.  Hyatt points already stretch further than Marriott Bonvoy points.  Off-Peak pricing could make some popular spots more accessible for folks on a tighter points budget.
4. I can’t even begin to tell you how happy I am that Hyatt will set these prices once, when the dates are open for booking.  I don’t want to be in the business of checking award pricing every….single…month.
5. Hyatt is automatically refunding points for reservations that get cheaper in March.  That saves us the step of calling to re-price an award stay.
6. I’m guessing most bloggers will say these changes are horrible.

The Final Two Pennies

On my last point above, most changes loyalty programs make nowadays are net negative for customers.  There’s almost no doubt in my mind that these changes will be bad for me.  I frequently redeem my points for family vacations during peak demand periods.  However, it really is too early to say this change is horrible.

Are we likely to see higher prices for awards at hotels we want to stay at?  I would expect so.  But, we really have no idea how many properties will be in peak or off-peak pricing, and how often we’ll see them implement higher pricing overall.  Marriott made the claim that the number of properties moving into peak pricing would be balanced by the hotels falling into off-peak pricing.  That claim fell largely on deaf ears based on Marriott’s history of corporate speak and backtracking on promises.

Hyatt has a better track record than that.  I’m not saying we should give them the benefit of the doubt and that these are all going to be positive changes, with a new car in every driveway and a fridge full of fresh groceries.  But, I am saying that you probably have enough time to finish your holiday shopping before the hand wringing begins.

And, I suspect that Gary of View From the Wing and I will be debating this on my podcast soon.  Stay tuned….

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