Do recent World of Hyatt changes signal the demise of the hotel loyalty program?

Over the last year, World of Hyatt has made several changes to its loyalty program and portfolio, making loyalists question whether the beloved program is no longer the darling of the hotel orbit.

Hyatt and MGM Resorts International announced the end of their strategic relationship in July 2023. (Marriott swooped in as the new partner a few days later.) Then, in February 2024, Hilton wooed away Hyatt's partnership with Small Luxury Hotels of the World.

Hyatt combated its SLH loss by rolling out its first batch of Mr & Mrs Smith properties in April 2024. However, this addition made Hyatt enthusiasts question if the hotel brand was moving toward dynamic pricing since the participating Mr & Mrs Smith properties do not follow the standard World of Hyatt award chart.

So, are the changes to World of Hyatt a sign of the hotel brand's decline? Furthermore, will World of Hyatt start pricing all its award nights dynamically, similar to Marriott Bonvoy and Hilton Honors? In our opinion: Not exactly. Here's why.

Hyatt's introduction of dynamic award pricing

Many award travelers are disappointed that Hyatt used dynamic award pricing for Mr & Mrs Smith. Certainly, we hoped Hyatt would fit the often-aspirational Mr & Mrs Smith properties into its award chart when it acquired the luxury and boutique hotel booking platform in 2023.

As TPG director of content Summer Hull noted in a discussion, "As more parts of their offerings are dynamic, that has to be acknowledged as a not-great trend that's a huge departure from how Hyatt has operated."

And she's right. We love that Hyatt still maintains an award chart and offers excellent World of Hyatt elite status perks on most stays. However, like Hyatt's previous partnership with SLH, loyalists won't get many of the Hyatt elite perks they love when staying at Mr & Mrs Smith properties.

Why Hyatt is using dynamic award pricing for Mr & Mrs Smith

There's a positive spin on why Hyatt uses dynamic award pricing for Mr & Mrs Smith properties: It unlocks the entire room inventory instead of just room categories designated for award redemptions.

"Transparently, members shared the challenges with lack of redemption availability at similar relationships — we've changed that with Mr & Mrs Smith," a Hyatt spokesperson told TPG. "While Mr & Mrs Smith hotels fall outside the standard award chart, this opens up an increased inventory and more flexibility for travelers looking to use points during specific dates. Now any room a member sees available for a cash rate, they can redeem for points — opening more room types and experiences to explore."

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This is a fair argument, especially considering how the Mr & Mrs Smith booking platform works. Still, it's disappointing to find relatively low redemption value at many of the Mr & Mrs Smith properties you can book with Hyatt points. At least one property we priced out gave a value of just 1 cent per Hyatt point, which is much lower than TPG's valuation of Hyatt points and definitely less than we strive for when redeeming Hyatt points.

Related: 5 easy ways to maximize Hyatt award redemptions

Is Hyatt moving toward removing award charts?

There's plenty of chatter in the award travel community that this is a case of a dynamic pricing canary down the coal mine. If travelers accept the award pricing strategy with Mr & Mrs Smith, won't Hyatt inevitably roll out dynamic award pricing within the rest of its portfolio?

We're a bit more optimistic than most. Although points and miles typically decrease in value over time, we believe Hyatt isn't rushing toward saying sayonara to its award chart. The World of Hyatt loyalty program is still significantly smaller than its primary competitors. Marriott Bonvoy has roughly 203 million members, and Hilton Honors has nearly 190 million. World of Hyatt only has 46 million members, so there's a motivation to make this smaller loyalty program more compelling to members with offerings unique to Hyatt.

"This is not a move toward dynamic pricing, and hotels in the Hyatt portfolio will continue to fall in either the standard or all-inclusive award charts," the Hyatt spokesperson said regarding the Mr & Mrs Smith award redemption strategy.

Several discussions with Hyatt spokespeople indicate that Hyatt understands and appreciates how having an award chart differentiates its loyalty program from its primary competitors, making us believe the Hyatt award charts aren't going anywhere soon.

Related: The 23 best Hyatt hotels in the world

Hyatt's replacement strategy

However, the threat of dynamic pricing isn't the only thing raising eyebrows among Hyatt's loyalty program critics. The double-punch loss of relationships with MGM Resorts and SLH reduced coveted opportunities to earn and redeem Hyatt points.

However, analysts on recent earnings calls noted that Hyatt pushes efforts to a replacement strategy when it loses a partnership. Of course, some of these replacement opportunities are more appealing than others.

Replacing MGM Resorts

Instead of booking MGM Resorts (Hyatt's strategic partnership concluded in September 2023), World of Hyatt loyalists can now earn and redeem points at the Rio Hotel & Casino in Las Vegas. This casino hotel, currently undergoing a $340 million renovation, is located off the Las Vegas Strip.

While the Rio isn't as centrally located as many Las Vegas properties in the MGM portfolio, it still provides Hyatt members with a casino hotel in Sin City. Best of all, weekday rates at the Rio start at just $31.51 or 9,000 points per night. There is a nightly $45.35 resort fee, but it is waived on award stays for all World of Hyatt members and eligible paid stays for Hyatt Globalist members.

That said, it's hard to imagine Hyatt is just resting on its laurels concerning Las Vegas. As such, we expect additional partnership opportunities down the line. Hard Rock International's chairman recently hinted to TPG that the company — which is about to transform The Mirage Hotel & Casino into a new Hard Rock Hotel & Casino — is in talks with major hotel groups about a loyalty partnership; however, no specific company names were mentioned. It's hard to imagine Hyatt isn't throwing its hat into the ring.

Related: 15 best hotels in Las Vegas for a Sin City getaway

Replacing SLH with Mr & Mrs Smith

Like many travelers, we're disappointed that Hyatt is using dynamic award pricing for Mr & Mrs Smith properties — especially since the resulting redemption rate is often lower than our valuation of Hyatt points.

But, if we can put aside the dynamic pricing disappointment and worries, some travelers might view Hyatt's acquisition of Mr & Mrs Smith as a net positive following the end of the SLH relationship.

For starters, you can earn and redeem Hyatt points at more than 700 boutique and luxury hotels participating in Mr & Mrs Smith. At its peak, the Hyatt and SLH partnership included around 350 hotels. Hyatt has said additional Mr & Mrs Smith hotels will be added to the World of Hyatt program quarterly.

"We are continuing to evaluate ways to enhance guest experiences and member experiences, especially for our most valued elite members," Laurie Blair, Hyatt's vice president of global marketing, said in April. "So, this is just the start of the relationship with Mr & Mrs Smith."

Plus, although points are a limited commodity for most vacationers, we've met travelers who earn far more points than they need. For these travelers, booking Mr & Mrs Smith properties with Hyatt points may be appealing, even if the redemption value is lower than you can get at many other Hyatt hotels.

Related: Your ultimate guide to Hyatt's hotel brands

Adding properties

Hyatt is adding an impressive number of properties to its footprint each month, as evidenced by the Hyatt promotion that lets you earn 500 extra points per night. Many of these are centrally located Category 1 Hyatt hotels or other low-category properties. So, even as travelers mourn each time Hyatt does its annual category changes, it's important to remember that many properties joining the World of Hyatt program are low-category properties.

Aside from one-off hotel additions, Hyatt has added properties from Lindner Hotels & Resorts, Me and All Hotels, Dream Hotel Group and Apple Leisure Group's all-inclusive resorts portfolio to the World of Hyatt program since late 2021. So, Hyatt isn't just trying to replace what it loses; it's also striving to expand its portfolio and footprint.

Related: How much value does World of Hyatt status provide when you book directly?

Bottom line

The very real fear is that World of Hyatt might look to its competitors as a reason to believe travelers will begrudgingly accept changes. Hilton Honors and Marriott Bonvoy haven't exactly bled loyalty members after both moved to dynamic award pricing and Hilton devalued its elite breakfast benefit.

We don't like losing the ability to book SLH properties that fit into Hyatt's eight-category award chart, and we don't like losing the opportunity to earn and redeem Hyatt points when staying on the Las Vegas Strip. We're also disappointed that Mr & Mrs Smith properties are much less affordable than SLH properties were when redeeming Hyatt points.

But we don't believe the demise of World of Hyatt is imminent or that Hyatt has any upcoming plans to remove its award charts. Instead, Hyatt will likely strive to maintain its small-but-mighty stance on the loyalty front and stick to its award charts while finding partnerships and experiences that attract members to the World of Hyatt program.

It's also important to remember that Wall Street appears fine with everything Hyatt is doing: As of the morning of May 22, the company's $151.26 per share stock price is up 36% from a year ago.