FlyerTalk members wilma, hailstorm, and others shared details yesterday of a new Hyatt survey describing benefits of a potential Hyatt credit card offer. Most significant among these was the chance to earn Gold Passport Diamond status after spending $50,000.
Contrast this with the current offer to receive 5 nights and 2 stays of credit toward elite status when you spend $20,000. You can earn an additional 5 nights and 3 stays when you reach $40,000 — up to 10 nights and 5 stays total.
In other words, this new offer would say that spending $10,000 more gets you a further 40 nights and 20 stays. Really? I’m not saying the current offer is actually that good — although it isn’t awful — but the suggested change would be extremely generous. The only good reasons why I can think Hyatt would want to offer something like this are either: (1) High-value customers probably have their own stays at a Hyatt property and won’t actually need this much help to earn Diamond status, or (2) If you aren’t earning that status the normal way, then you may use it infrequently and the actual costs of honoring the benefit are not as great.
But I don’t think Hyatt is doing it because of the huge financial renumeration they get for encouraging cardholders to spend $50,000. Card processing fees are typically about 2-2.5%. Break it down and you’ll see that distributed between the payments processor (e.g., Visa gets 0.5%), the issuing bank (e.g., Chase gets 1%), and the co-branding partner (e.g., Hyatt gets 1%). These numbers are all subject to change when a contract is negotiated between these partners, so my numbers are very, very rough. But my point is, I don’t see Hyatt making more than $500 off a person who spends $50,000.
There are other reasons why Hyatt might throw in this new detail to a survey. For example, many other benefits of the card remain unchanged, so it could be a way of measuring the value people place on Diamond status and if it makes them more receptive to this version of the card with a higher annual fee. Believe it or not, not everyone is obsessed with elite status or finds it useful. There might be variations of this offer in different surveys with higher annual spend thresholds to see just how much people would be willing to put on their cards to earn Diamond status. Hyatt might even have expected people to share the details online so it can monitor the public response.
But for now, I remain skeptical that we would actually see a card like this materialize. The benefits of Diamond status are too great relative to Hyatt’s benefit in such a scenario, and recent history indicates that Hyatt is restricting access in the form of more targeted status matches — not making it easier for those who just happen to have a piece of plastic.