Do all-inclusives make spending on Hyatt credit cards more valuable?
World of Hyatt has been busy lately, adding all-inclusive properties around North America and the Caribbean, expanding the Brand Explorer perk to include these new additions and working to add all-inclusive hotels and resorts in Europe to its growing portfolio. And now you can redeem your Category 1-7 free night award at a growing number of all-inclusive properties.
Given everything that's happening, is spending on Hyatt cobranded cards more valuable? Does the ability to earn a free night award and redeem it at these properties increase the value of spending on Hyatt credit cards? Let's take a look at the math.
Get the latest points, miles and travel news by signing up for TPG’s free daily newsletter.
Earning and redeeming free night awards
While World of Hyatt does offer two types of free night awards (Category 1-4 and Category 1-7), only the latter can be used at all-inclusive properties.
That's because there is a separate award chart for all-inclusive properties. The properties are listed in categories A to F, and a Category 1-7 free night award can be used at all-inclusive properties in categories A to D.
Related: World of Hyatt adds over 50 luxury all-inclusive properties, celebrates with a 5,000-point promotion
You can receive a Category 1-7 free night award as part of Hyatt's Milestone Rewards benefit by earning 60 tier-qualifying night credits each year with World of Hyatt. This would also qualify you for top-tier Globalist status. Unfortunately, each person can only earn a maximum of one Category 1-7 free night award per year, which means you can only earn one free night award toward all-inclusive stays per year.
It is possible to earn these 60 tier-qualifying nights via a mix of stays and credit card spending. Since the personal and small-business Hyatt credit cards do provide these elite night credits via credit card spending, how much would it cost to spend your way to this perk?
With the World of Hyatt Business Credit Card, you would need to spend $120,000 on the card in a calendar year to earn 60 tier-qualifying night credits. This would unlock top-tier Globalist status and the Milestone Reward of a Category 1-7 free night award.
By contrast, the spending requirement to unlock these same perks with the World of Hyatt Credit Card is $140,000 per year. Though the card offers five tier-qualifying night credits automatically each year (the business card doesn't offer this), the card earns night credits at a lower rate.
Is spending on Hyatt credit cards more valuable now?
Now that we understand how to earn a free night award that's valid at all-inclusive properties, let's look at whether spending on Hyatt's credit cards is more valuable now that Hyatt is increasing the number of all-inclusive properties available for free night redemptions. The costs below are based on two adults in a room. Additional people staying in the same room could skew the costs, so take that into consideration.
To be fair, the hotel prices were sampled across the exact same dates.
Sample all-inclusive property costs
From the five all-inclusive properties I sampled, the average nightly price for two adults is $713.40. This information is purely based on nightly room rates and doesn't take into consideration things like resort fees, any extras you choose to pay for or transportation to and from the property.
Related: Pro tip: Here’s how to avoid paying resort fees
| Property name | Average nightly rate |
|---|---|
| Zoetry Villa Rolandi Isla Mujeres Cancun. | $768. |
| Hyatt Ziva Cancun. | $654. |
| Breathless Montego Bay Resort & Spa. | $846. |
| Secrets Papagayo Costa Rica. | $595. |
| Hyatt Zilara Cap Cana. | $704. |
| Average from five sample properties: $713.40. |
Sample Category 7 property costs
When comparing five different properties, I selected a mix of popular destinations. The average nightly price is $754.60. Again, the figures are purely based on room rates.
| Property name | Average nightly rate |
|---|---|
| Small Luxury Hotels Las Alamandas Resort in Mexico. | $432. |
| Hyatt Centric Key West. | $988. |
| Alila Marea Beach Resort Encinitas. | $890. |
| Grand Hyatt Kauai Resort. | $778. |
| Hana-Maui Resort. | $685. |
| Average from five sample properties: $754.60. |
Adjusting for food and drink costs
I have to admit that I was surprised to see the average nightly cost is higher for hotels than all-inclusive properties. After all, these properties are offering "all you can eat and drink" while you're staying there.
So what happens if we adjust for this number? We're looking at a difference of $41.20 per night. That's the price difference between the average nightly rate at Category 7 properties and the average nightly rate at Category C and D all-inclusive properties. Is the typical couple going to spend more than $41.20 per day on food and drinks?
Let's assume that you'll get free breakfast wherever you're staying and take this out of the equation. Maybe you have elite status with World of Hyatt. Perhaps your hotel offers free breakfast for guests.
Now, we're left with this question: Is the average couple going to spend more than $41.20 on lunch and dinner each day? In touristy areas, absolutely. My wife and I have spent less than this on daily food on several trips, but those were not beachfront resorts in popular tourist destinations. Comparing a hotel in this setting to an all-inclusive property means you'll be in an area where food and drinks cost more -- especially if you dine at the hotel.
So are you "getting a deal" by booking an all-inclusive stay? From these numbers, yes. You'll likely come out ahead, unless you would really scrimp and save on food costs. For those who consume a lot of alcohol, you'll really be getting your money's worth.
What about earning and redeeming Hyatt points?
Unfortunately, each World of Hyatt member can only earn one Category 1-7 free night award each calendar year. After this, you'll need to pay cash or use your Hyatt points.
Luckily, Hyatt assures me that the option to Pay My Way with a mix of cash, points and free night awards is being rolled out for all-inclusive properties.
So, what's the best path to earning a lot of Hyatt points? The highest earning rate on either card comes from spending with Hyatt hotels and Lindblad Expeditions. Beyond this, I don't find the spending categories on either card overly impressive. Since Hyatt is a Chase transfer partner, what if we consider just earning a ton of Ultimate Rewards points?
You could earn more Hyatt points overall by using a credit card that earns Ultimate Rewards points and then transferring them to Hyatt. Consider the following with better earning rates than the Hyatt credit cards (and remember, cash-back earnings can be combined with Ultimate Rewards points):
| Spending category | Hyatt card earning rate | Hyatt Business card earning rate | Other Chase card(s) with better earning |
|---|---|---|---|
| Airline tickets. | 2 points per dollar. | 2 points per dollar (if it's one of your top three spending categories each quarter through Dec. 31, 2022, then your top two categories each quarter). | 3 points per dollar with the Chase Sapphire Reserve. |
| Car rentals. | 1 point per dollar. | 2 points per dollar (if it's one of your top three spending categories each quarter through Dec. 31, 2022, then your top two categories each quarter). | 3 points per dollar with the Chase Sapphire Reserve. |
| Drugstores. | 1 point per dollar. | 1 point per dollar. | 3% back with the Chase Freedom Flex. |
| Internet, cable and phone services. | 1 point per dollar. | 2 points per dollar (if it's one of your top three spending categories each quarter through Dec. 31, 2022, then your top two categories each quarter). | 3 points per dollar with the Ink Business Preferred Credit Card (on up to $150,000 across the card's bonus categories). |
| Office supply stores. | 1 point per dollar. | 1 point per dollar. | 5 points per dollar with the Ink Business Cash Credit Card (limited to the first $25,000 of bonus category spending per year). |
| Restaurants. | 2 points per dollar. | 2 points per dollar (if it's one of your top three spending categories each quarter through Dec. 31, 2022, then your top two categories each quarter). | 3 points per dollar or 3% back with the Chase Sapphire Reserve, Chase Sapphire Preferred Card, Chase Freedom Unlimited or Chase Freedom Flex. |
| Travel. | 1 point per dollar. | 1 point per dollar. | 3 points per dollar with the Chase Sapphire Reserve. |
Breaking it down -- does this provide more value?
Everyone has different spending habits, but the chart above shows that "how to get the most Hyatt points" may not necessarily include a lot of swipes on your Hyatt cobranded credit card. That's because other Chase credit cards offer better earning rates in many categories.
The key takeaways for consideration are:
- Earning a Category 1-7 free night award -- to be used at Category A-D all-inclusive properties -- should have a redemption value of around $700.
- You need to accumulate 60 tier-qualifying night credits to earn this free night award, which can be done via a mix of stays and credit card spending.
- Spending your way to World of Hyatt status without any hotel stays is possible but requires six figures of spending on your Hyatt credit card each year.
- If your interest revolves around free nights at Hyatt's growing list of all-inclusive properties, you can only earn one free night award per year valid on these stays.
- Thus, the best path to free stays here may be earning as many Hyatt points as possible, and this is likely via earning Ultimate Rewards -- rather than using your Hyatt credit card.
I won't pretend to speak for everyone. Before I started digging into the numbers, I thought the data would say "yes," that spending on Hyatt credit cards is more valuable now -- because you can redeem for all-inclusive properties. However, I don't think that hypothesis held up for me. That's because I can only earn one free night award for these properties using my Hyatt card. On the flip side, I can earn significantly more points for award redemptions by focusing on using the best card for each purchase and maximizing my Ultimate Rewards-earning.
Bottom line
If Category 1-4 free night awards could be redeemed at Hyatt's all-inclusive properties, this would absolutely increase the value of spending on Hyatt credit cards -- at least until you got to $15,000 in spending and 30 tier-qualifying nights. This would give you three free night awards per year, but those awards (Category 1-4 validity) cannot be used at all-inclusive properties.
Since you can only earn a single Category 1-7 free night award per year, this doesn't provide much help toward stays at Hyatt's inclusive properties. If you're trying to earn free stays at all-inclusive resorts, look at your habits for spending and stays with Hyatt. Are you really best served by aiming for 60 tier-qualifying nights simply because of the free night award? If that's all you care about, look at your spending to see whether shifting to an Ultimate Rewards-earning card would actually net you more points in the long run. Earning an extra point per dollar across thousands of dollars in spending per year could really add up, and this may help you get more free nights at all-inclusive properties in the end.