The Brancatelli File By Joe Brancatelli
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Note to Hyatt: Yours Is a Small World After All
November 3, 2016 -- We are in what can only be called the Brutalist Era of frequent travel plan design.
Led by the airlines, which have consolidated themselves to the edge of oligarchy, the contours of Brutalist frequency programs are easy to see:
+ You're nothing if you're not elite and you're very little if you are only entry-level or mid-scale elite. The world is full of travelers, the industry believes, so your marginal business doesn't make that much difference.
+ The only real benefits of elite status are at the tippy-top of the programs and travel providers make sure you know that they're doing you a favor by honoring the promises they make.
+ Every benefit, every perk, every grace note is transactional. You're only as good as the dollars you pour into the company coffers.
Hyatt entered the Brutalist Era of frequency plans last week when it unveiled World of Hyatt, next year's replacement for its soon-to-be-very-much-missed Gold Passport plan. World of Hyatt is rich if you reach its garishly named Globalist level, which requires 60 nights of stays a year or $20,000 in annual spending. The lower elite levels, oddly named Discoverist and Explorist, are much less valuable than you could have gotten in Gold Passport. Most of all, frequency doesn't matter much. The number of stays you ring up are meaningless in World of Hyatt. All that matters is the number of nights you give to Hyatt and the amount you spend.
But here's the problem with Hyatt going where virtually every U.S. airline has already gone. Hyatt doesn't have the clout to pull off the Brutalist design of World of Hyatt.
Hyatt is a flyspeck--about 600 properties worldwide--compared to its major competitors, behemoths like Marriott/Starwood (5,000 hotels), Hilton (4,700), InterContinental (5,000) and Accor (4,100). Even Carlson, at 1,400 oddly matched properties and a frequency program that too often echoes its distant history as Gold Bond Stamps, is twice Hyatt's size.
Hyatt needs you much more than you need Hyatt, but there's almost nothing in World of Hyatt that recognizes that reality. Instead of making World of Hyatt richer and more inviting to more business travelers than Gold Passport, Hyatt has pulled back. Instead of telling business travelers to come hither, World of Hyatt tells travelers you don't matter much if you can't stay very frequently or spend quite lavishly.
Business travelers who went out of their way to find Hyatts because Gold Passport, especially the Diamond level, was so robust and paid back their loyalty so quickly will find World of Hyatt nowhere near as accommodating. Unless you can give Hyatt the equivalent of a business week of stays a month to attain the Globalist level, you're likely to find it easier and just as rewarding to concentrate on a larger chain's program.
Before we proceed, let me make two interesting, if probably irrelevant, points.
World of Hyatt would have been a great scheme if Hyatt rather than Marriott snapped up Starwood and Starwood Preferred Guest. With 2,000 hotels worldwide from which to choose in a merged Hyatt-Starwood operation, World of Hyatt would have offered a fair payback for the effort you put into being loyal to a reasonably sized hotel company. Besides, Marriott itself would be 1,300 properties smaller, making for a more level lodging playing field.
Moreover, I like the folks at Hyatt. Jeff Zidell, the public face of Hyatt loyalty, will always take the tough question. He picks up the phone when you call, listens to dissenting views and, within the realities of corporate talk, does try to speak in real-world terms. Maybe that shouldn't matter when you're judging a frequency program, but it does to me. I've rooted for Hyatt because it is smaller, its lodging products more consistent and it has, generally speaking, tried harder.
Maybe that's what makes World of Hyatt such a disappointing exercise. It doesn't try harder. World of Hyatt isn't something I can recommend to most business travelers. It just isn't worth the work it takes to seek out Hyatt, which has yawning gaps in its geographic coverage when compared to Marriott or Hilton.
When it launches March 1, World of Hyatt will be the kind of program where you acquire the credit card for $75 a year, stick the card in the back of your wallet and know you have Hyatt entry-level (Discoverist) elite status when you need it. For that $75 investment, you'll get free premium Internet access, some room upgrades, a bottle of water when you check in and a guaranteed 2 p.m. check-out time.
And if you can get to the 60-night-a-year Globalist level, you will be treated extraordinarily well. Your resort fees will be waived, you'll automatically get the best room in the house or upgrades to standard suites and a 4 p.m. check-out time. Your breakfast will be free in the hotel club or a hotel restaurant. There'll be four guaranteed suite upgrades each year when you choose to use them and a personal concierge to help with reservations, awards and the like. There are other perks, too, and more rewards and recognition for each 10 additional nights you stay with Hyatt. If you can give such a small chain that many nights, I urge you to look at the new Globalist level.
But for business travelers below Globalist--and especially those who've been enjoying the perks of Gold Passport's Diamond level--World of Hyatt comes up short.
The mid-tier elite level, Explorist, requires too many nights (30) at too small a chain or too much spending ($10,000 annually or $333 a night) to make it a good payback. World of Hyatt even all but eliminates your ability to use Hyatt's credit card to help reach the Explorist level. In Gold Passport, $20,000 of credit card spending earned you credit for five nights of stays and $40,000 earned five more. World of Hyatt won't even consider your spending until you hit the $50,000 level, although that will elevate you automatically to Explorist.
Needless to say, Jeff Zidell, head of Gold Passport and World of Hyatt, begs to differ with most of my assessments. And he's been honest enough and transparent enough with travelers in the past that he deserves to have his dissent considered. You should look at Hyatt's geographic distribution, the hotels' standards and the benefits of World of Hyatt. You may agree with him more than me, especially if your travel pattern aligns with Hyatt's geographic distribution.
There is a short-term silver lining, too. If you've already earned Diamond status in Gold Passport for next year or will qualify before the end of the year, Zidell will put you in the Globalist level in 2017.
And to be absolutely fair, 2017 will be a transitional one for hotel programs. Marriott and Starwood won't move to a joint program until 2018, so SPG and Marriott Rewards will essentially remain unchanged. Hilton will have to up its game, especially if Marriott retains most of SPG's top-tier benefits in its 2018 plan.
That does give Hyatt time to rethink its new program and recognize it needs to be substantially richer, especially at the lower elite levels, than other competitors to justify business travelers going out of their way to stay at Hyatt. When you're about an eighth the size of your nearest rivals, you don't need only to try harder, you have to try a lot harder than World of Hyatt does.
This may be the Brutalist Era of frequency plans, but business travelers are brutal, too. If Hyatt makes us work harder to find their limited number of properties, we're going to judge what kind of return Hyatt offers for that extra work. If it's insufficient, as World of Hyatt is, we'll put our heads on beds elsewhere.
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