Originally Posted by thbe

I think every loyalty program is its own side in the game. Its purpose is to make guests prefer one hotel group over another, accept higher rates, and stay more nights than they otherwise would. It is funded by the hotels, which in turn are funded by the guests.

Making guests prefer one group over another is simply a matter of competition. A loyalty program can be mediocre as long as the alternatives are worse. World of Hyatt still sits on the better side of that spectrum.

Getting guests to accept higher rates is about creating enough perceived added value while keeping the cost of providing that value below the rate premium. Since Hyatt often charges more than competing groups, World of Hyatt has to offset that by offering significant added value.

Encouraging guests to stay more nights than they otherwise would is about qualification requirements and aspirational spending. A new tier may attract more people, but higher parking fees and destination fees pull in the opposite direction.

My sense is that the potential changes would make World of Hyatt less attractive for many travel patterns. Perhaps Hyatt believes it can afford to do that. I am less convinced.