Hyatt Confirms New Category 8 & Why I Think This Will Lead to a Long Term Devaluation

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Hyatt Category 8 Long Term Devaluation
View from Park Hyatt Tokyo. This category 7 property no doubt would be one of the first they would consider if increasing prices.

Hyatt Category 8 Long Term Devaluation

Yesterday Hyatt accidentally leaked the existence of a new 40,000 point per night Category 8 on their website. After it was discovered, the company immediately removed any mention of the new tier. They also issued the following statement confirming it: (HT: Pizza in Motion)

Rest assured that we have no plans for any Hyatt-branded hotels or resorts to move to a new Category 8.

As you know, we have been working toward launching an alliance with Small Luxury Hotels of the World that will allow members to earn and redeem World of Hyatt points at participating SLH properties in the future. Given the diversity and caliber of the SLH portfolio, we anticipate that some SLH properties will fall into a new eighth category on our award chart. We look forward to sharing more details when the alliance officially launches.

As I had theorized in my post yesterday, this new category is being implemented due to their new partnerships. SLH does have many amazing looking properties and some of them are a step up from anything Hyatt currently offers, but let’s be clear. This is a long term devaluation.

Park Hyatt Tokyo

This Is A Long Term Devaluation

Any time a program adds in a more expensive option, pricing will slip up in the long term. While Hyatt says they don’t have any plans to add current properties to this new tier, I can assure you current properties will eventually make their way on to the list. Additionally, new higher-end properties no doubt will be considered for this new 33% higher cost tier.

The biggest red flag of all though is the fact that Hyatt can already charge more than 30,000 points per night on a case by case basis. Last year they added this language in order to explain Miraval pricing. If they were eyeing one or two SLH properties that they felt needed to be priced higher I suspect they would have priced them individually. In my opinion the addition of a new category means that we will see many properties occupy this 40,000 point per night level before long.

No Pitchforks

With all of that said, Hyatt hasn’t increased their award pricing tiers since 2014 and overall has maintained their rewards program value more than most other hotel chains. While I do think this new tier will both lower the value of Hyatt points and lead to higher prices across the board in time, their competitors have done the same thing. Gutting of points + cash aside, even with these changes Hyatt offers a great value for many people.

Conclusion

I’m glad that Hyatt is growing their brand and personally I am happy to see some incredible new high-end hotel options come under their umbrella. While I do think Category 8 will mean higher prices at existing properties in the long term, the price of everything goes up over time so……….I guess I’ll just get to earnin’.

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3 COMMENTS

  1. Agree – the top Hyatts will go to CAT8. Real problem (for me) is the trickle down effect where current CAT1/2/3/4 will go to 2/3/4/5

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