Originally Posted by
JackE
What is your basis for that claim?
Common sense.
Points don't expire (as long as one uses the account).
Free nights expire. Therefore, the cost to Chase is less than if they awarded points. If this were not the case, Chase would give points as the sign up bonus.
The cost is only less if not all the free nights are redeemed. Put another way, Hyatt knows that some free nights will expire unused, so they are willing to discount the cost that Chase pays.
Therefore, both Chase and Hyatt plan that x% of awards expire unused. If more awards are redeemed, then Hyatt's costs go up, and Hyatt will pass those costs to Chase during the next contract negotiation.
This is the same reason that Hyatt (and other programs) prefer to award free (expiring) nights than run generous point promotions.
Common sense can answer many questions.