Seeing the World in Hotel Tiers

Seeing the World in Hotel Tiers

2014 hotel award category reassignments give insight to the global state of the hotel industry.
Nine major hotel loyalty programs use hotel award categories to set the cost of one hotel award night using points. These programs are Best Western Rewards, Choice Privileges, Club Carlson, Hilton HHonors, Hyatt Gold Passport, IHG Rewards Club, Marriott Rewards, Starwood Preferred Guest and Wyndham Rewards.

Hyatt Gold Passport, Club Carlson and Wyndham Rewards added a new top tier hotel award category this year. Hyatt raised award prices for upgrades and Category 5 and 6 hotels. Hyatt added Category 7 and introduced Points + Cash awards. Club Carlson created a Category 7 hotel award at 70,000 points and now counts award nights as elite qualifying. Wyndham Rewards created Tier 9 hotel awards at 50,000 points per night, 67 percent more points than Tier 8 at 30,000 points, and placed Wyndham Poipu Beach Kauai in the new tier.

These 2014 changes follow extensive hotel award program changes in 2013. Hilton established 10 award categories and seasonal pricing, resulting in some hotels rising from 50,000 to 95,000 points per night. IHG Rewards Club shifted to nine award categories. Starwood raised the cost of Cash & Points by about 20 percent. Marriott Rewards introduced Category 9 and raised the award category for 36 percent of its hotels globally while lowering only one percent.

Trends in 2014 hotel award category changes
Analysis of Hyatt, Carlson and Starwood 2014 hotel award category changes reveal trends. Award night rates take a big jump at select high-end hotels. New Category 7 awards at Hyatt Gold Passport and Club Carlson are 36-40 percent more in award cost. Both of these programs had more hotels go up in award category than down. Starwood bucked that trend with more hotels going down than up in 2014. At the regional level, there are similarities in category reassignment between all three programs.

Hyatt Gold Passport raised the award category for 27 hotels (five percent) and lowered 17 hotels (three percent) out of 548 hotels globally. Six Park Hyatt hotels populate the new Category 7 at 30,000 points. Fifteen hotels in the U.S. account for 56 percent of hotel category increases. Hyatt raised the category at seven high-end hotels in Asia Pacific, including Park Hyatt hotels in Melbourne (Category 5), Sydney and Tokyo (both Category 7).

Of 17 Hyatt brand hotels that dropped category, 11 are in the U.S. including some high-end hotels in Maui, Huntington Beach and Lake Tahoe. Five hotels in Asia, including three Park Hyatt hotels, dropped in category in China, Korea and India. Overall, we saw balanced changes in Hyatt with hotels going up and down.

Starwood reassigned about 20 percent of their hotels globally to a new award category, raising 111 hotels and lowering 139 hotels. A good global trend, except regional analysis shows 73 U.S. hotels comprise 66 percent of the hotels going up. Only 21 hotels in U.S. went down a category level. Two countries, China at 48 hotels and India at 21 hotels, account for 50 percent of the hotels dropping to lower SPG award categories. Japan saw 10 hotels drop. Only five hotels in Asia went up. Fifteen hotels in Europe increased with St. Regis Rome and Schloss Fuschl Salzburg rising to the exalted Category 7. Greece saw three hotels rise to Category 6. The main SPG trend is a Europe and U.S. rise in award category and an Asia fall.

Club Carlson made major adjustments in its loyalty program by reducing elite member bonus points, eliminating online booking bonus points and introducing Category 7 hotel awards at 70,000 points per night, a 40 percent premium over Category 6 hotels at 50,000 points. Going up were 114 hotels and 67 went down in award category reassignment for 1,300 hotels. Nine hotels occupying Category 7 are all in Europe and Middle East in Paris (3), London (2), Moscow, Amsterdam, Cannes and Dubai. Club Carlson Visa card members maintain one free night on award stays of two or more nights. Free nights at 9,000 points are harder to find as Category 1 hotels decline by 20 percent to 35 hotels globally.

Club Carlson saw 64 of 114 hotels going up (56 percent) located in the U.S. Europe and the U.S. account for 91 percent of the hotels moving to higher award categories. Twenty-seven hotels in the U.S. and 12 in Europe are also the majority of 67 hotels moving to lower award categories. India has 20 hotels moving lower and only four hotels in Asia rising to a higher award category.
Prevailing trends in the 2014 hotel award changes show U.S. hotels rising to higher award levels across all categories. European cities trend higher. India and China are where hotel points buy more nights.

Marriott and Hilton hotel award category reassignment in 2014 will likely reveal more of these same trends, although I don’t expect new hotel award categories to follow last year’s changes.

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