Update: This is a reminder that World of Hyatt category changes kick in as of March 22, 2022, so this is your last chance to book at the old rates. It may make sense to lock in some award stays today. You can find the original post from February 14 below.

The changes to the hotel category will affect which hotels are in which categories and how many points are required for free night redemptions. These changes are terrible for people who like aspirational redemptions.

146 Hyatt hotels changing categories on March 22

The changes to the hotel category of the World of Hyatt will kick in on Tuesday, March 22, 2022.

As of that date, 146 hotels will be changing categories, with 70 hotels going to a higher category and 76 going to a lower category. The Hyatt Place Moab is going up two categories, but all hotels will be going up or down. There is a full list of hotels changing here.

Alila Marea Encinitas will become a Category 7 World of Hyatt property

Booking logistics:

  • All reservations made prior to March 22 will follow the current award chart, even if you stay on a subsequent date
  • Members who have stays booked at hotels that go down a category will receive an automatic one-time refund of the points difference; these points will be returned starting March 23
  • Any adjustments made to bookings after the changes go into effect will follow the new pricing

The standard World of Hyatt award chart reflects peak and off-peak pricing, which kicks in for stays as of March 1, 2022.

World of Hyatt New Peak & Off-Peak Pricing

Ugh: Hyatt properties move to Category 8

Since more hotels are moving down in category than up in category, the changes might not be that bad. The properties that are most popular and most redeemed at are also the ones that go up in price.

The development here is worse than the category changes we have seen in the past. Small Luxury Hotels of the World have been reserved for Hyatt properties at Category 8. The economics of redemptions are different because those hotels aren't managed by Hyatt.

That will be changing. The Hyatt properties will move to Category 8 on March 22, 2022.

  • Alila Napa Valley
  • Alila Ventana Big Sur
  • Andaz Maui at Wailea
  • Park Hyatt Kyoto
  • Park Hyatt Milan
  • Park Hyatt New York
  • Park Hyatt Niseko
  • Park Hyatt Paris
  • Park Hyatt Sydney

This is a huge devaluation. Prior to these changes, the most expensive hotels were the World of Hyatt points per night. Peak award pricing is being introduced for stays at these hotels as of March. As of late March, these hotels could cost you up to 45,000 points per night, which is a cost increase of up to 50%.

Andaz Maui will become a Category 8 World of Hyatt property

The economics of World of Hyatt awards

Understanding how the economics of hotel loyalty programs work is worth the effort. Hyatt's loyalty program has to compensate individual hotels for each redemption because most Hyatt hotels are independently owned. Here is how it works, as a general rule of thumb.

  • When the hotel isn’t full, the loyalty program compensates the hotel at some reimbursement rate that’s slightly above the marginal cost of servicing a room, etc.
  • When the hotel is full (think 90-95%+ occupancy), the loyalty program compensates the hotel close to the average daily rate, in recognition of the fact that the room may have otherwise been sold

If a hotel has high rates but lowOccupancy, it might be in a disproportionately low category. If a hotel has lower rates but highOccupancy, it might be in a high category. The redemption costs of the World of Hyatt are the focus.

The high end of the market is being devalued because of the huge demand for luxury travel. Room rates at many luxury properties are through the roof, and they are packed. The Andaz Maui rooms are more expensive than they were before. The World of Hyatt's costs for redemptions increase with highOccupancy.

It probably doesn't make most of us feel any better, but it's worth knowing where these changes are coming from.

Alila Ventana Big Sur will become a Category 8 World of Hyatt property

Bottom line

The changes to the hotel category are brutal for those looking for redemption. Many of Hyatt's top properties are moving from Category 7 to Category 8 even though Category 8 hasn't been used for Hyatt properties.

Hyatt's most expensive properties will go from 30,000 points per night to up to 45,000 points per night, a price increase of up to 50%.

This will cause me to change my valuation of World of Hyatt points. We shouldn't be too surprised to see a devaluation of aspirational properties, given the amount of demand right now. Marriott Bonvoy is moving to dynamic award pricing and eliminating the cap on how many points a stay can cost, but these changes come around the same time.

What do you think about the World of Hyatt?