Why Hyatt’s New Points + Cash is Practically Irrelevant

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Indulge me for a minute, as I take another look at Hyatt’s recent changes, and do some maths to boot.  A few days ago, Hyatt announced some changes to its World of Hyatt programme – you can read about them by clicking here.

As soon as I saw them, my analytical mind immediately thought “this doesn’t make sense”, but I wanted to show why… But first I need to tell you about the latest Hyatt buy points promo; it comes around 2 or 3 times per year.

Buy Points and Receive a 40% Bonus

Between now and 27 November, 2018, you can receive a 40% bonus when buying at least 10,000 points.

If you buy at least 10,000 points, you will pay 1.71 US cents per point. (roughly 1.3p).  You can buy a maximum of 55,000 points (77,000 after bonus) per calendar year.

This is going to be our baseline for my subsequent analysis. If you want to jump to buying points, you can click here and log in to your Hyatt account.

The New Points + Cash

This is the new award chart for Points + Cash.

Let’s take a hypothetical hotel in Category 1 (it would work for all categories though) and look at various possible ways to book a room. It’s useful to remember that award nights now count for promos, elite status, etc.

  1. Cash Rate – £100 (after-tax)
  2. Full Points Award (but buy points) – 5000 x 1.3p = £65
  3. Points + Cash – £50 + 2500 x 1.3p = £82.50

Therefore, the optimal outcome is to just buy points and book an award night. What if the hotel has lower rates?

  1. Cash Rate – £50
  2. Full Points Award – 5000 x 1.3p = £65
  3. Points + Cash – £25 + 2500 x 1.3p = £57.50

The optimal result is to pay the cash rate. One last attempt…

  1. Cash Rate – £65
  2. Full Points Award – 5000 x 1.3p = £65
  3. Points + Cash – £32.50 + 2500 x 1.3p = £65

Even now, there’s simply no way for Points + Cash to provide a better value than simply paying the cash rate or buying points.

I do recognise that you EARN points on the cash rate, and on the cash portion of a Points + Cash rate, but trust me when I say that this is only relevant when comparing P+C to the 100% points award.

The Bottom Line

Who might be interested in using Points + Cash therefore? It won’t be a savvy travel hacker, but it might be somebody who:

  • Doesn’t pay too much attention to miles and points, but has a few thousand Hyatt points to get rid of
  • Has already bought their annual maximum of points
  • Is stuck with an urgent need for an expensive hotel during a period when Hyatt isn’t running their 40% bonus promo (and they don’t have enough points)

One of the things that I really HATE is when travel companies offer reward options that are completely aimed at members who don’t know any better. One of the worst examples is IHG‘s Points & Cash option where the cash portion varies depending on the hotel or level of room rates at a specific hotel, even though all you are doing is buying non-refundable points from IHG!

 

So… I can’t think of a scenario where I will EVER make use of the new Points + Cash from Hyatt, because I am comfortable buying Hyatt points during promos. What do you think? Am I missing something?

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