Via Travel with Grant, I saw the other day that World of Hyatt is planning to partner with a luxury home rental company called Oasis (and that you can use discount code "UnboundxHyatt" for a $100 discount if you book before October 31). Apparently at some point in the near future you'll be able to earn and redeem World of Hyatt points on these stays.
When I first saw this tie-up described, I thought there was no way it could possibly work. After doing a bit of digging, I've actually come around to the idea that it's possible, if well-executed, for the partnership to make sense for customers.
Let's take a look.
World of Hyatt points are very valuable because of the low maximum points redemption
Setting aside for the moment the value of the World of Hyatt program (it's comparable to the other major programs for paid stays, contingent on your elite status and credit card) and focusing on the value of World of Hyatt points, you see that World of Hyatt points are uniquely valuable because of the very low maximum number of points you need to redeem: the most expensive Park Hyatt properties in the world cost no more than 30,000 World of Hyatt points.
Since Chase Ultimate Rewards points can be transferred to World of Hyatt, that puts a hard cap of $300 per night in cash value on the cost of your hotel stays in destinations with Hyatt properties, subject of course to award availability.
Across all redemptions Hyatt presumably turns a profit
While an award redemption during a particularly busy or expensive weekend may require World of Hyatt to pay properties close to retail, most of the time Hyatt pays just a small fraction of the retail cost of your stay (properties sometimes accidentally print on your folio the amount they're paid by Hyatt so it's worth taking a look at your folio on award stays if you're interested).
I don't have any special insight into the economics behind this process, but across all award stays I think it's safe to assume Hyatt makes a modest profit: Chase pays them more for World of Hyatt points than Hyatt pays out on award stays, and Hyatt properties pay more in licensing fees than they get paid for award redemptions (hopefully making up the difference by being able to charge more and attracting customers loyal to the program).
How could World of Hyatt redemptions work with Oasis?
I did some clicking around Oasis to get a feel for the prices these properties typically charge, and they span a pretty wide range. I searched for the 6 US cities on Oasis, for a 3-night weekend stay in November. Here are the rates I found:
- In Austin, prices range from $110 for a one-bedroom to $1,200 for a 4-bedroom;
- In New York City, from $222 for a one-bedroom to $1,350 for a 5-bedroom;
- In Chicago, from $140 for a one-bedroom to $2,160 for a 5-bedroom;
- In Los Angeles, from $144 for a studio to $6,000 for a 6-bedroom;
- In San Francisco, from $152 for a one-bedroom to $519 for a 2-bedroom;
- In Miami, from $180 for a one-bedroom to $4,995 for a 7-bedroom.
To synthesize these rates, in the US market Oasis charges between $110 and $222 per bedroom on the low end, and between $259 and $713 per bedroom on the high end.
My mistake when I first glanced at the Oasis website was to think that there's no way Hyatt could square the circle of paying $4,995 per night to an apartment's owner while charging a low enough number of World of Hyatt points to make the redemption reasonable to their members (who only pay 30,000 points at the most luxurious properties in the Hyatt portfolio, remember).
The answer, of course, is that they'll charge per bedroom per night, as Wyndham Rewards currently does for redemptions at their vacation properties.
If I had to guess I'd say redemptions will start at 12,000 or 15,000 points for the cheapest apartments, and top out at 30,000 points for the most expensive, on a per-bedroom, per-night basis. Redeeming 210,000 World of Hyatt points per night for a 7-bedroom house in Miami obviously isn't something you'd do for a weekend getaway, but for a wedding, bachelor party, or other special occasion it would offer 2 cents per point compared to paying cash. There's no question there would be some takers at that rate (and since each property can only accommodate one reservation per night you only need to book a maximum of 365 nights per year).
I could see this working for family trips
Right now Oasis doesn't have very many participating cities or properties, but presumably they're intent on rapid expansion to new cities and signing on more properties within their existing footprint. Once World of Hyatt redemptions are live, we'll see what kind of value redemptions ultimately offer. The obvious value of these redemptions will be for folks traveling as a family who want additional living, kitchen, and dining space compared to what they'd get at a hotel.
If the alternative is booking multiple hotel rooms and eating out for every meal, or having to spend a lot of time driving between your hotel and your destination, then being able to stay in a single unit, in a good location, with a kitchen and other amenities could be very valuable.
The devil will be in the details
Obviously since the partnership hasn't launched yet, it's impossible to say whether it will "really" be a good deal or a bad deal. There are a lot of ways it could go wrong:
- World of Hyatt awards include all taxes and fees. Will taxes and fees be included on Oasis awards? If not, they'll become a significant co-pay on award stays, since in addition to taxes Oasis reservations also charge a cleaning fee.
- Will award availability match paid stay availability? Most (all?) Oasis properties have minimum stay requirements, but will they be longer for award stays than for paid stays? Will there be blackout dates for award stays, or will you be able to book with points any nights available with cash?
- Will award rates be too high? You can imagine Hyatt investing nothing in this partnership and simply allowing you to redeem World of Hyatt points for one cent each towards Oasis stays. That's an extreme case, but if they set redemption rates too high on a per-bedroom, per-night basis, the whole thing will be a meaningless embarrassment.
While I doubt I'll ever book an Oasis stay with World of Hyatt points, over the course of writing this post I slowly came around to the idea that, if well-executed, the Hyatt-Oasis partnership might provide good value to families under certain circumstances.
But until redemption details are announced, all we can do is speculate.