That is bizarre logic. Every repeat guest starts out as a first time guest. The hospitality during the initial impression creates the repeat. You may get better treatment on your sixth stay as opposed to your first, but all my favorite hotel/resorts treated me well from the first stay.

That's too bad if they don't give a nicer room if available. Where is the thank you for the continued loyalty and business to the Hyatt brand? Isn't that what all these loyalty programs are about?