An idea how to solve the GP2005 problem
 

I have a idea, how GP could reasonably handel the different types of reservations:
1. All paid reservation, which are not opaque have to be eligibeable (including hyatt.com, expedia, package rates, AAA, etc.)
2. All other rates (hotwire,PLN, awards) could be made eligiable by spending a minimum of let's say US$50 at the property in eligeable charges.

What do you think of this?

This would be SO nice. I always thought that the current system (whether intentional or not) was a great way to reward extra spending at the hotel, even when on an in-eligible rate. Even when on a PL rate, for instance, I've frequently ordered room service or ate at the restaurant in order to get stay/night/promo credit. Without this extra incentive, I would've gone out to eat, or not ordered this or that service from the hotel, itself.

That is what my suggestion is all about. I t seems, taht the changes come from the hotels, but they seem not to be aware, that many people only spend something additional there to get credit for the stay, so they really should be interested to keep it as it was.

This is a good idea, and $50 sounds nice to me, but it probably isn't enough. From Hyatt perspective, the minimum for incidentals would probably have to be an average room rate for that property PLUS the average incidentals charged, or around $200 per night.

In any case, I doubt we would see anything develop. I really can't think of anything we have discussed here on FT that has resulted in program changes that benefit us. But it is always worth throwing out ideas to see if one ctches their fancy.

It is a nice idea, but I would give 100 to 1 odds that any nice ideas that we came up with on this forum would be implemented by Hyatt.

At this point I would be happy if there was just definitive list on what rates are going to be eligible especially after 3/1/05. The one thing I definitely do not what to hear is “ It is up to the hotel if it is eligible or not”. Since this seems to be the way things are heading.

This idea makes very good business sense. Revenue is revenue. Great thought, and very unique approach. Hyatt, take notice!

Keep dreaming.

Let me play devil's advocate. Sure, revenue is revenue, but by the same token not enough revenue is not enough revenue. We have been clearly told that a $1 incidental is not enough revenue, so why would $50 be enough to score half of a $400 room with FFN's? We have been told that "enough revenue" is defined by an eligible rate.

Since FFN is outside of the realm of any other program in the industry, it would be fair for HGP to say you earn credit with an eligible rate PLUS $100 in qualified incidentals. I can tell you I would still earn my FFNs if this were the requirement!

$50 might not be the number, but at some number, it clearly makes great sense. That is, the concept to allow credit on an "ineligible" rate for $X of in-hotel expenditures.

Perhaps, but the "X" value might be higher than you think, and higher than an eligible room rate.

Room revenue above a certain rate is all profit. Incidentals carry an expense and labor charge, so the margin isn't as high.

Consider the value of a FFN in Paris at $400. One could argue that the "X" value would generate a profit of $400 to get the free room. Assuming 50% margin, that means the incidentals would have to be $400/night for two one night stays.

Your assumptions are not correct. The hotel are reimbursed for award stays and FFN by GP (I have seen the amounts a couple of times on the check in forms). This amount is probably around, what they need to cover the vairiable cost of you staying there.

Second wrong assumption is the margin of services, like telephone, room service or minibar charges in the hotel, this is more like 70-80%.

As to make my suggestion workable, it should be fixed around the normal hotel level, and there the reimbursement rate or even more a PLN rate plus 50-100$ will bring you easily in the range of normal rates, if not even higher.

Allow me to clarify and fine tune my assumptions with an example:

Any additional room revenue received above a PL or "free night compensated" rate is 100% margin.

A Hyatt.com rate at $175 provides an additional $100 per night over a typical PL rate of $75. To make up for this $100 in room revenue, even at a 75% margin (which I think is high), you would have to spend $133 per night on incidentals.

On a "GP free night" the hotel is compensated about $30, right? This produces a $145 "shortfall" in revenue, requiring $193 per night to be spent on incidentals to make up the difference.

Wow, is that it?!?!?!? I'd be shocked if it were that low. You'd think the hotel would treat people that were on award stays like crap. Especially the better properties like Maui/Kauai.

I saw it on my folio somewhere at less than $20. This is the general idea. This was discussed in some other thread about three months ago.

The amount the hotel gets from an award night has been mistakenly printed on my folio also (and sometimes it shows up when I look at my account on the TV. The high I've seen has been ~$120/night at the PH Philly. The low has been ~$25 at the Crystal City Hyatt.

It always amazes me when I discover that a very nice hotel was paid next to nothing for my stay. Two years ago I stayed at the Hilton Athens for 2 nights using points and saw that the hotel received about $16/night. The going rate at the time was around $350/night.

Anyway, my point is that yes, some hotels receive very little from an award night.

What the hotel gets is based on the type of award too, FFN is the lowest, points are next, Club at the Hyatt free nights are next.

PLN is seldom $100 off the lowest public available rate, except for resorts.