Big changes coming to World of Hyatt: Peak and off-peak pricing added in March 2020
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Editor’s note: In light of the coronavirus pandemic, the World of Hyatt program has postponed the implementation of peak and off-peak pricing until at least July 2021.
Hyatt has long been a fan favorite among award travelers thanks to reasonably low award rates and an unrivaled focus on the guest experience, especially for World of Hyatt elite members. Additionally, the Hyatt fixed-award chart is one of the last that tells you exactly how many points you’ll need for a free night at any of its hotels.
That’s going to change as of March 2020, as Hyatt becomes the latest hotel chain to join in on the industry trend of peak and off-peak pricing, a slightly more predictable form of the dynamic award pricing that’s sweeping across the broader travel rewards industry.
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What’s changing with World of Hyatt?
Beginning in March 2020, Hyatt will introduce three tiers of awards — off-peak, standard and peak — for all redemption types, including standard rooms, club-access rooms and premium rooms/suite awards. Points+Cash awards, which were significantly devalued late last year, will also utilize off-peak/standard/peak rates, and will continue to require 50% of the standard cash rate and 50% of the points required for a free night.
If you have an existing award booking for a hotel whose rate changes to off-peak in March 2020, Hyatt will offer a one-time refund of the difference in points. If your hotel goes up to peak pricing (but you have an existing reservation), you won’t be charged any additional points.
Unlike Marriott, which recalculates peak and off-peak prices on a monthly basis based on demand, Hyatt’s peak and off-peak pricing will be set in stone when the calendar opens for bookings 13 months in advance. This encourages customers to go ahead and complete their reservations instead of waiting around in hopes of a better deal.
Hyatt’s new award rates
With those details out of the way, let’s dive in and take a look at the new multi-tiered award charts, starting with standard awards:
|Off-peak (% change)||Standard||Peak (% change)|
|Category 1||3,500 (-30%)||5,000||6,500 (+30%)|
|Category 2||6,500 (-18.75%)||8,000||9,500 (+18.75%)|
|Category 3||9,000 (-25%)||12,000||15,000 (+25%)|
|Category 4||12,000 (-20%)||15,000||18,000 (+20%)|
|Category 5||17,000 (-15%)||20,000||23,000 (+15%)|
|Category 6||21,000 (-16%)||25,000||29,000 (+16%)|
|Category 7||25,000 (-16.67%)||30,000||35,000 (+16.67%)|
|Category 8||35,000 (-12.5%)||40,000||45,000 (+12.5%)|
While no one is happy about the arrival of peak and off-peak pricing (more on that later), these prices are pretty reasonable, all things considered. The price changes for peak and off-peak balance out perfectly, meaning that if you book one peak award and one off-peak award at the same category of hotel, you’ll end up breaking even.
Unfortunately, Hyatt’s Category 1 hotels will see the largest pricing change. “Awards starting at just 5,000 points a night” has always been one of Hyatt’s best selling points for budget travelers, and while the company can now technically advertise awards starting at just 3,500 points per night, the peak pricing of 6,500 points per night for a Category 1 hotel is a real jump.
Luxury travelers will be happy to note that the price changes generally get smaller as you reach higher categories, with Category 7 and 8 having some of the smallest price changes. This means that luxury properties like the Park Hyatt Sydney and Park Hyatt New York, two of the most iconic and aspirational hotels in Hyatt’s portfolio, are only seeing modest price changes under the new scheme. Interestingly enough, Category 8, which Hyatt had to add to accommodate some of the Small Luxury Hotels of the World properties that it now partners with, is seeing the smallest changes.
With the massive assumption that Hyatt is going to roughly balance out the number of peak and off-peak nights that are available, across individual properties and the entire portfolio, I’d say this is a pretty reasonable award chart.
As mentioned above, Hyatt is also adding peak and off-peak tiers to its multitude of other award charts, including for suites. For the most part these changes are the same or smaller than the corresponding changes for standard night awards, which open up some nice redemption options. If you’re able to find a night when the Park Hyatt Shanghai is off-peak, you can book a premium suite in the 12th tallest building in the world for only a few thousand more points than a standard room at the Park Hyatt New York.
If you don’t have Hyatt elite status that would normally entitle you to a free breakfast, booking a club room at a Hyatt Regency or Grand Hyatt can be a great value add for your award stay. While these rates are also getting the peak and off-peak treatment, the pricing range roughly matches what we’ve seen from the other award charts so far.
Hyatt technically has separate award charts for its all-inclusive properties, like the Hyatt Ziva Cancun and the Hyatt Zilara Cap Cana. In reality, these properties all line up as Category 5 or 6 hotels on the standard room award chart, so you only need to pay attention to these prices if you’re looking to book a standard suite at an all inclusive or add extra guests.
Last but not least, Points+Cash rates will continue to require 50% of the points for a standard room award and 50% of the standard cash rate. If you need a cheat sheet, here’s how many points that would be to book a standard room, a standard suite or a premium suite.
What Hyatt changes mean for award travelers
While it’s hardly surprising that Hyatt is following an industry-wide trend that’s already seen Marriott, Hilton, Delta, United and plenty of other travel providers switch to some form of variable or dynamic pricing, this is a painful devaluation no matter how you slice it. Even in the best-case scenario, peak and off-peak pricing is going to be a bitter pill for families who have to plan their travel around school calendars or anyone trying to go home and see family for the holidays, dates that almost universally qualify as “peak.”
The question isn’t whether this is bad news, it’s how bad it is, and whether Hyatt can continue to offer a uniquely valuable loyalty program after these changes take effect.
Hyatt has given us a good three months of warning before these changes take effect. As of now, there are no firm answers that will determine just how big of a devaluation this represents:
- Who gets to decide when a hotel is peak versus off-peak? While Hyatt wants to keep the World of Hyatt program valuable for its customers, individual properties have less of an incentive to be generous with the amount of off-peak availability they release. Whether it’s up to the individual hotels or Hyatt corporate to make that decision will have huge implications for award travelers.
- How will Hyatt balance peak and off-peak nights? When Marriott switched to peak pricing, it promised that across the entire portfolio, there would always be the same number of peak and off-peak nights available. Now obviously you shouldn’t expect to find off-peak space at the St. Regis Maldives in the middle of February, but knowing there was some kind of balancing mechanism in place was reassuring. When airlines switch to dynamic award pricing it’s almost universally seen as a devaluation, as they simply make less and less saver level award space available. Hyatt hasn’t indicated that they have any balancing mechanism in place, and until they do I’d be pretty concerned about how this is going to play out.
- What will happen to free night certificates? Hyatt currently ties its free night certificates, like those earned from the World of Hyatt Credit Card, to hotel categories rather than point values (i.e. “valid at a Category 1-4 hotel”). Hopefully this means that they’ll still be valid at Category 4 hotels that are under peak pricing, but if not then Hyatt hasn’t just devalued its loyalty program but also its credit cards.
- Will this lead to more award space? A common phrase we hear from corporate executives is that dynamic pricing will better match supply and demand, leading to more award availability for those customers willing to pay extra for it. While I’m not defending Marriott’s peak pricing by any means, it’s worth noting that all but two dates in February now have award availability at the St. Regis Maldives. If Hyatt plans on using this switch to open up more award space they should let us know as soon as possible to soften the blow.
While there’s no way to call this a positive development (especially for families or people with less flexible travel dates), it might not be that bad. Here is the absolute best we can hope for in terms of Hyatt’s switch to peak and off-peak pricing:
- Balance the number of peak and off-peak dates at a property level. While this makes sense for heavily seasonal destinations (no one wants to go to the Maldives during rainy season), it guarantees that big city hotels like the Park Hyatt New York will have plenty of off-peak availability for members.
- Balance the number of peak and off-peak dates at the portfolio level. More people travel around Thanksgiving, Christmas and New Years, that’s just a simple fact. If Hyatt, like Marriott, promised that there would always be an equal number of peak and off-peak properties across the entire portfolio, this would help some holiday travelers avoid the brunt of this devaluation.
- Keep free night certificates tied to categories. Marriott’s free-night certificates are now tied to a point value, meaning for example that a 35,000 point free night certificate won’t work at a Category 5 hotel under peak pricing. Hyatt could stay one step ahead of the competition by continuing to allow free night certificates to be redeemed based on category, regardless of whether the hotel was under peak pricing or not.
- Increase the amount of award space. There are plenty of people who’d be willing to pay 35,000 points a night for a stay at the Park Hyatt New York during the holiday season, and Hyatt could retain a lot of goodwill by increasing award availability to go along with these increased prices.
Next March, Hyatt will become the latest company to join the trend of variable pricing when it introduces peak and off-peak award rates. Only time will tell just how big of a devaluation this is, but it certainly isn’t good news. The rates themselves are fairly reasonable, but the big unanswered question mark is just how much peak vs. off-peak award space there will be.
Featured photo by Samantha Rosen/The Points Guy.
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