I would certainly hope these upgrades couldn't be applied to any type of discounted rate. Even at the daily rate these constitute a tremendous discount at many properties.

Point upgrades are by far the single feature of the program I value most. I don't have access to a lot of corporate rates, so tend to pay the daily rate for most Hyatt stays anyway. In my view suite upgrades are a good deal for the properties as they often sway my business to high-end Hyatt properties when I would otherwise choose a different hotel.