Is it a waste to use a Cat 1-4 certificate on a Cat 3 property?

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One reason to dislike free night certificates (or at least to prefer points) is the inherent pressure they present. If you’ve ever had a free night certificate nearing its expiration, you know what I mean: let’s say you paid $85 for this credit card, you don’t want to use the certificate at a hotel that only costs $110 per night. If it’s a Category 5 certificate, who wants to waste it on a hotel they could have had for Category 3 points? And so you wait…until you end up at that $110/nt hotel. In Albany, NY. In the winter. For no reason other than that the certificate is about to expire. Ugh. We probably all know that feeling! But how about when your certificate isn’t set to expire: does it ever make sense to choose a lower category redemption? My recent experience argues that it might be.

Hyatt Cat 1-4 free night certificates

Hyatt awards a couple of different types of free night certificates. Those who hold one of the World of Hyatt credit cards get a Category 1 to 4 free night certificate every year at anniversary and the newer World of Hyatt credit card that is available today offers a second such certificate after spending $15,000 in a year.

Another type of certificate issued is for being a “brand explorer”. When World of Hyatt debuted a couple of years ago, one of the new features was the ability to earn a free night certificate after staying at 5 brands. While I don’t quite believe that it took me until early 2019 to hit my 5th brand, Hyatt finally sent me a free night certificate earlier this year. This certificate can be used at hotels in categories 1-4. As a reminder, here are the eligible categories and their associated cost in terms of Hyatt points:

  • Category 1 = 5,000 points per night
  • Category 2 = 8,000 points per night
  • Category 3 = 12,000 points per night
  • Category 4 = 15,000 points per night

There are some great Category 4 properties at which to use your certificate, including several Park Hyatt hotels and a whole slew of newly-added Small Luxury Hotels of the World properties. I’ve stayed at more than a few great Category 4 hotels and many of them are in locations I’d love to visit again (or for the first time). The Andaz Papagayo has long been viewed as one of the best uses of these certificates, though that hotel will change categories in just a few days (get your reservations in now).

Am I right to “waste” mine at a Category 3 property?

Of course, using a free night certificate at anything other than the highest level possible feels like a waste. If I use my Cat 1-4 free night certificate at a property that ordinarily charges 12,000 points per night (rather than Cat 4’s 15K points per night), I’m essentially throwing away some value. At the very least, I could have saved myself 15,000 points for a night, but I’m only saving 12,000 points with the certificate. Right?

In a sense that’s true, but I’m not totally convinced. In my case, using it at a Category 3 property is going to save me points. Sort of.

I have an upcoming trip to Japan. Room rates in Tokyo are notoriously expensive. The last time I visited, I spent a night at the Park Hyatt and two at the Conrad Tokyo when room rates were well north of $1,000 per night.

This time around, I surveyed my options. I have Marriott Platinum status, but the cheapest of Marriott hotels are priced at 35K per night, with most falling in the 50K per night range. While I’ll be happy to have used 240K points for 5 nights at the St. Regis Bali later this year, I’m not really interested in spending 200K for 4 or 5 nights in Tokyo.

IHG only has InterContinental Properties in Tokyo. Fifty-five thousand points per night and no breakfast? No thanks. Not for multiple nights, anyway.

My Hilton points balance has taken a hard hit in recent months, and paid rates were out of the question.

Then there’s Hyatt, a 1:1 Chase transfer partner. Here were my Hyatt options:

Hyatt’s hotels in Tokyo look nice. Really nice. While the Park Hyatt is the stuff of legend thanks to the movie Lost in Translation, I actually didn’t love it when I stayed there. I’m not saying I wouldn’t give it another go. But at 30K per night, is it worth it? Every two nights of that could get me a nice business class flight somewhere. Traveling with a 1-year-old (which will turn into traveling with a 2-year-old before we know it), I just didn’t feel like that made sense.

So then I’m left with the Andaz, Centric, Grand, and Regency. My last few Andaz stays convinced me that I’m not much of an Andaz guy for whatever it’s worth.

That whittled the list down to the Grand Hyatt, the Centric, and the Regency.

Suggestion for Hyatt: Grand Hyatt needs a re-brand. I’ve stayed at a few really nice Grand Hyatt hotels, but the name itself doesn’t really differentiate it from Hyatt Regency or plain-old Hyatt. Furthermore, in my mind, Grand Hyatt means “large convention hotel that has a crowded club lounge”. Coincidentally, Hyatt Regency also means “large conventional hotel that has a crowded club lounge”. See what I mean about differentiation? Many of the Hyatt Regency hotels at which I’ve stayed overseas have been a lot nicer than many of those I’ve visited in the US. Are they as nice as a Grand Hyatt? Honestly, it’s hard for me to separate in many instances. I feel like they have more in common than they don’t, so it’s hard to justify more than double the cost of the Regency for the Grand. Further, if I’m going to spend 25K/nt on the Grand Hyatt, wouldn’t the Park Hyatt be more than 5K per night better?

I eliminated the Grand Hyatt and came down to the Hyatt Centric and the Hyatt Regency. The Hyatt Centric looks like a cool hotel with a funky vibe. I very seriously considered staying there. At a total price of 80K for 4 nights, the savings felt significant enough over the Park Hyatt to feel reasonable, especially since it’s a newer hotel and breakfast is probably still pretty good. Part of me wanted to stay at the Centric.

But then I kept looking at the Hyatt Regency. It’s clearly not as modern and won’t have that same “cool” vibe of the Centric. On the flip side, it has a club lounge where I can grab a free coffee and a snack when my son takes a nap and where I can probably substitute appetizers for dinner a night or two and thereby justify going out for a really nice lunch (which is much easier than dinner with a 1yr old). Four nights would cost me 36,000 points + my free Cat 1-4 certificate — saving me 44,000 Hyatt points over my next best option. That’s a healthy chunk of points saved. More importantly, staying at the Hyatt Regency Tokyo will save me enough for nearly three Category 4 nights in the future. Furthermore, I’ll get back the same 1K points per night at this 12K/nt property as I would at the 20K/nt Hyatt Centric via Hyatt’s current promotion.

Bottom line

Could I have held on to the certificate and looked for a weekend trip to use it on a 15K property? Sure, I probably could have looked for an opportunity to take another trip. Instead, I used it to convince myself that I’d rather use 36,000 points (net 33,000 after the promo) on 4 nights in a really expensive city (in terms of points or cash) than use 80,000 points (76K net) on the same 4 nights. I looked over the Hyatt Category 4 options and compared against my travel schedule for the remainder of 2018 and just didn’t see something else that fit, and in this case it helped tilt the scales towards a cheaper option that keeps more points on hand for the next trip — so that doesn’t feel like a waste at all.

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