The hotel industry is not the same as the airline industry. Hotel brands need to keep properties participating at all levels. The lower end hotel properties will not participate in a program where their frequent guests do not gain top elite status and they have to give top status to guests who spend a lot at full service properties. Property participation is key for hotel brands. Airlines buy and lease their own planes, but hotel brands do not control hotel properties to that same extent. Hyatt's attractiveness as a brand would drop if they lose most of the limited service properties because there would be fewer places with a Hyatt property. This would reduce Hyatt's ability to land corporate contracts.
Status will be based on stay frequency or revenue, and individual properties will continue to give extra incentives to their best customers.