Like many readers, I am a tremendous points and miles fanatic. I have about 30 credit cards and am constantly earning and churning my points for free flights and hotel stays. I really enjoy our timeshare and use it for many trips but timeshares simply do not have the same footprint as hotels. Timeshares associated with the major brands know this and as a way to entice ownership, offer the ability to convert their timeshare points into hotel points for use at hotels. In this post, I will explore this option with a Hyatt timeshare. In other posts, I will go through a similar analysis with other timeshare brands including Marriott, Hilton and Vistana (Starwood). Stay tuned for more. Hyatt Residence Club Points to World of Hyatt Points – Major hurtle The significant issue with converting your timeshare week/points into hotel points is that Hyatt does not allow this conversion if you purchased your timeshare from someone other than Hyatt. As a result, this likely will not be a viable strategy for most since you need to purchase through the developer and therefore, are likely paying top dollar for your timeshare week. Most programs have a resale program where they will sell you a resale week that does not have the same penalties as buying outside of the developer but these resales are still generally much more expensive than purchasing from the individual owner. Despite this important limitation, I wanted to go through the economics and potential use of this feature of the Hyatt Residence Club. Hyatt Residence Club Points to World of Hyatt Points Chart Here is the current conversion chart: 
The chart is fairly simple to understand. Basically, the conversion values will be based on the size of the unit and the season which you own. As you can decipher from the chart above, be cautious about buying a Mountain time unit as they do not offer this feature for those weeks. I have talked about Mountain time here but definitely do not purchase one of those weeks if conversion is of any interest. As discussed above, Mountain time can be an awesome value but has major limitations. Economics of Conversion Let’s use my current Hyatt week as an example. I own a 2-bedroom unit in Platinum season. I purchased resale but, if I was eligible for the conversion feature by purchasing directly, I would be able to convert my week into 82,000 Hyatt World of Hyatt points each year that I can then use those points to book Hyatt hotels. The Hyatt Residence Club charges you a fee of $133.00 for this option. Let’s do some math based on my week:
Comparison to Purchasing with Hyatt For those of you who do not know, Hyatt offers the ability to purchase World of Hyatt points. They offer the ability to purchase a maximum of 55,000 per year. They usually run promotions that give you a bonus depending on the amount you purchase – either 10%, 20%, 30% or 40% more. For example, if I wanted to purchase the maximum amount of points (55,000) and their standard promotion is running, I would be able to purchase 55,000 plus a bonus of 22,000 for a total of 77,000 points for a purchase price of $1,320. $1320 divided by 77,000 = $0.017. Therefore, Hyatt offers you the ability to purchase points during a promotion period of about 1.7 cents per points. Absent the promotion, the math would be as follows: $1320 divided by 55,000 = $0.024. Without the promotion, the cost per point is 2.4 cents. If you are in the miles and points world, there are various subjective measures of how much points are worth. While this is very subjective, many people value Hyatt points around 1.8 cents. Breaking Down the Math There is a decent of amount of math is this post so let’s break down the final figures:
Is this a good option? With all the math, the question remains on whether this is a good option. Like most questions, the answer is “it depends”. The tremendous flaw in the above math is that it excludes the cost of purchasing directly from the developer as compared to the cost of purchasing resale. Unfortunately, the retail prices of timeshares are not very transparent as the general mantra is to get someone to purchase for the largest price possible. In all presentations that I have been to, they start out with one large number and continue to go downward to a price that could actually make sense to the purchaser. It is extremely difficult to say the developer price that you can obtain a similar 2-bedroom unit to the one discussed above but it will likely be many times the resale value. If this is something that could actually make sense based on your travel style, I would inquire about purchases / resales directly with the Hyatt Residence Club and do the math from there. If you simply ignore the initial price, and just base the math on the comparison from purchasing points, there is a decent discount ($0.16 as opposed to $0.24) to using this option. If you only purchase during a promotion period, the discount is much less ($0.16 as opposed to $0.17). Regardless of the cost of the points, the true value of the points is how you use them. 82,000 is not a tremendous amount of World of Hyatt points but can give you some good options to travel in Hyatt hotels around the globe and with much more flexibility than timeshares. Value in World of Hyatt Hyatt has category 1 through 7 hotels where category 1 hotels cost 5,000 points per night while category 7 costs 30,000. If you used all your points for a category 1 hotel, you would receive about 16 nights (82,000 divided by 5,000 = 16.4). Values can fluctuate but let’s assume that most category 1 hotels cost about $100 per night. This is an estimate – I have seen some less than this but I have also seen some much more. If that is the case, by converting your week, you would get about $1600 of value from $1333.00 – about a 20% increase in value. If you used all your points for a category 7 hotel (30,000 points per night), you would receive under 3 nights. Let’s assume that you have extra points so that you could get a full 3 nights. Category 7 hotels prices fluctuate wildly based on the hotel and timing. Let’s assume that the cost per night is 7x the amount of a category 1 hotel, therefore $700 per night. Therefore, if that is the case, by converting your week, you would get about $2100 of value from $1333.00 – about a 57% increase in value. Conclusion Overall, I get tremendous value out of my Hyatt Residence Club points so the conversion option is not very relevant to me. Even if it was available to me, I would likely never do it. I think that there are much better ways to get World of Hyatt points (i.e. Hyatt credit card, Chase Ultimate Rewards, etc.) so I would not run out to purchase a timeshare for this option. However, Hyatt’s hotel footprint is significantly larger than its timeshare footprint (though much smaller than the other major hotel brands), so I can see the potential value in giving timeshare owners this option and in many cases, the timeshare owner can actually come out way ahead in electing to convert their week depending on how and when to use those points. I have received close to 6 cents per point in value for some of my Hyatt redemptions so if I could replicate that year after year, I would happily pay $1333 to convert into 82,000 World of Hyatt points. The key question is the differential in the price to acquire an eligible Hyatt timeshare versus the resale cost. What do you think of this analysis? Would you convert with these prices? Do you think that the ability to convert is a worthwhile feature that would encourage you to purchase from the developer? Make sure to leave comments below! |
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