Nick predicts: Hyatt & Marriott’s elite status plan for 2020

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Yesterday, we learned that Hilton will extend elite status to 2021 or even 2022 for some. Radisson announced the day before that they are extending elite status. IHG announced two weeks ago that they are reducing 2020 elite status requirements due to the current COVID-19 situation. What about Hyatt and Marriott? Will we see an extension of elite benefits? What are they waiting for in announcing it? We don’t yet know — and in my opinion, we probably won’t know for a while. This post is total conjecture, but as we get this question often I figured it was worth addressing it here.

Similar announcements, similar inaction so far

Both Marriott and Hyatt have addressed the fact that elite status requirements for 2020 will need to be adjusted. From their COVID-19 statements:

Marriott statement (link to statement):

We understand that earning status for 2021 may also be on your mind. As the current situation is still evolving, it is too early for us to make any changes. We will keep you updated on all loyalty program changes through our Marriott Bonvoy member benefits website.

Hyatt statement (link to statement):

Given the quickly evolving nature of the situation, it is simply too early to suggest revised elite tier qualifications and award expiration beyond members in Asia Pacific. However, we know that adjustments will need to be made, and we are committed to communicating these as soon as we can.

Both programs have recognized that changes to elite status qualification will need to happen, but unlike IHG, Radisson, and Hilton, we haven’t yet heard what those changes will be.

Why not just extend everyone’s status?

The easy and customer-friendly solution here would be to follow in Radisson and Hilton’s footsteps and extend status for all. The year 2020 is a total anomaly beyond anyone’s control with weeks to months of flight cancellations, hotel closures, and stay-at-home orders preventing most people from traveling in the near-term and making it difficult to plan for the long term. It’s certainly possible that we won’t see companies lifting their corporate travel bans before mid to late summer at the earliest, which would mean travel really getting back to “normal” in the fall — with just a few months left in the year. Can’t we just get a do-over on the year from loyalty programs? It’s not as though they have lost our loyalty — we’ve just lost our ability to travel for the time being.

Truthfully, that’s the solution I’d like to see. At this point, I still feel confident enough to make 2021 travel plans. I imagine that things will clear up at some point in 2020, but I can’t really predict when that will be, so it’s hard for me to commit to 2020 nights right now. I’d be happy to start committing 2021 nights to a loyalty program though. Surely I’m not alone.

However, I don’t necessarily expect that’s the solution we’ll see.

At the end of the day, the entire purpose of a loyalty program is to drive repeat business, so it’s not altogether unreasonable that brands would use their program as a tool to bring people back in the fold when travel returns to normal. Hotels (and travel providers in general) have essentially gone down to near $0 in revenue in many situations (quite a number of hotels are now closed for a couple of months because of this). When they reopen, their goal (obviously for their shareholders and hotel owners but also for their thousands of employees and those outside vendor employees that count on the hotels being open for their jobs, etc) will be to get as many heads in beds as possible. If they automatically extend status, they may assume they are selling themselves short by taking away the incentive to stay with them when travel returns to normal. We don’t know when life will be “normal” again, but if we imagine a scenario where things re-open in June and Hyatt/Marriott announce double elite night credit on all stays through the end of the year, people will still have six months to stay half the number of required stays ordinarily required. If the pandemic drags on and properties remain closed and international flights remain cancelled into August and/or companies continue to ban corporate travel before the fall, maybe these programs will reduce tier requirements by some percentage and also offer double or triple elite night credit or something like that. Maybe it will eventually get to the point where they’ll decide there is little they can do to encourage business this year and then they’ll call it a wash and extend status into next year. There are quite a few possibilities.

And that’s a predicament for those making decisions: Which of those scenarios will be the right path? To take a guess today about when travel will resume and announce some different qualification requirement that may end up being unreasonably difficult (because stuff stays closed longer) offers little upside for them. Further, taking the chance that their announcement gets misinterpreted as trying to encourage people to travel today rather than stay at home offers potential backlash. All things considered, it’s not like an announcement about updated elite status requirements is going to change a member’s choice of hotel next week or next month since in most cases their members aren’t traveling right now. Rushing an announcement while we have no end in sight to current restrictions probably isn’t prudent.

I don’t think we’ll see announcements on the reductions of elite status requirements from Hyatt or Marriott until we round the corner on the pandemic and start seeing a light at the end of the tunnel. It’s just too hard for them to predict what will be reasonable without knowing when hotels will be open and flights will be operating and people will be comfortable traveling. Personally, I wouldn’t expect an announcement on this front until mid-April at the earliest but more likely it won’t come until May.

That is unless they decide to extend status and give us that do-over on 2020. That kind of certainty would obviously be welcomed by customers and could be announced at any time. An elite stauts extension could still be combined with promotions that encourage stays later this year when travel is once again feasible and lead to a win-win. Hopefully Marriott and Hyatt will see that opportunity.

Will new requirements bring new opportunities?

Personally, I’m not terribly concerned with the timing of the Marriott and Hyatt announcements on elite night requirements for 2020. Whatever decisions they make, there are likely to be opportunities for us to find.

For example, if Hyatt reduces the number of elite nights required to earn Globalist status, the World of Hyatt credit card will increase in value since every $5K spent earns 2 elite nights. That could make it very easy to spend your way to status.

If Marriott offers double elite night credit and award stays count, I imagine there will be a nice opportunity for those with low-level Marriott properties in their vicinity. After all, it is likely we will see off-peak pricing available at near-empty hotels for months after things return to normal. A 5-night stay at an off-peak Category 1 property costs 20K points. Imagine if they offer double elite night credit and that 20K points actually scoops up 10 elite nights. It wouldn’t be surprising to see Marriott offer points on sale for a reduced price again, offering an opportunity to potentially buy cheap elite qualifying nights.

I think it is further likely that we’ll see some generous promotions in terms of point-earning from stays. Will it be like “the old days” where you could sometimes earn points that were worth more than the cost of the room? I don’t know, but it’s not impossible.

Those are a couple of small examples, but the point is that there will likely be enhanced opportunities with reduced requirements. Combined with automatic credit card elite nights and such, there could be opportunities to pick up status with little effort — and we’ll surely be keeping our eyes peeled for those opportunities.

While I would love to see a free extension of status for all members, I think it is more likely that we’ll see a multiple of elite status nights — at least double and perhaps triple. I imagine programs would rather keep the numbers consistent (i.e. Titanium requires 75 nights or Globalist requires 60 nights) if possible. I think they will likely give members the opportunity to earn those nights with fewer stays (by offering double or triple elite night credit for each night you stay). It essentially reduces the number of nights required to earn status without diluting the way people think about the requirements.

If this drags on into the summer, they may need to consider reducing those elite night requirements after all while also giving additional elite nights credit for new stays. That would represent opportunity for those who do travel later this year — if we’re able to qualify with fewer nights and get additional elite night credit, that could be a solid deal for those members who travel this year.

Unfortunately, changes that merely reduce the number of elite nights required or offer extra elite status credit would leave behind those who opt to wait a few extra months to plan unnecessary travel and/or those whose ability to plan leisure trips gets crunched with the back-to-school schedule and less appealing weather in many popular destinations in late fall and early winter. That’s to say nothing of the folks who will travel less in 2020 due to economic uncertainty but who will hopefully be back in position to travel regularly again in 2021. I think programs that don’t essentially offer a do-over of 2020 will lose some of those customers to Hilton given Hilton’s stance on status — both the extension and the fact that “free breakfast status” (i.e. Hilton Gold) can be easily bought with a credit card annual fee.

Bottom line

We haven’t yet heard about what the new elite status requirements will be from Hyatt and Marriott for 2020 earning (2021 elite status year), but we do know that they will very likely be reduced. It is doubtful that we’ll know exactly what that looks like for at least several more weeks and perhaps it will be a longer wait than that. However, if they do not intend to offer an extension to all members, I’m hopeful that it will mean generous promotions that give us opportunities to earn outsized value while also supporting those folks who will be looking forward to getting back to work at our favorite hotels.

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