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UPDATED:  Rumor Mill: Hyatt Residence Club could be converting to a strict points based system called Hyatt Pure Points

8/31/2016

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UPDATED as of February 14, 2017
This post was originally posted in August but there has been some further activity concerning the Hyatt Pure Points program.  

The program was suppose to officially launch as of February 21, 2017 but new rumors indicate that this date has been pushed back. 

Basically, based on my sources, it appears that Hyatt is in fact moving to a points only system instead of having a specific deeded property attached to your point allocation. This system essentially mimics what Marriott has done with its land trust.  

As of now, the details are still scarce but the likely result may actually create a situation where the value of existing weeks will increase on the secondary market.  With the current system, owners can choose the resorts with the lowest maintenance fees and pick a week with the highest point allocation.  This way you could own a 2,200 value point week and pay the same maintenance fee as someone with a 1,300 value point week. 

With the new program, you will likely purchase points and the maintenance fee will be based on a per point ownership.  Essentially, the arbitrage that was available with deeded weeks will be gone. 

With the roleout of the new program, Hyatt may be aggresively pursuing its right of first refusal options on resale.  This allows Hyatt to have the option to purchase the units for the sale price before they allow any transfer. 

If you were interested in becoming a Hyatt owner, it likely will be beneficial to purchase a unit now before the rollout of the new program.  With the information leaked, there may be a limited opportunity to get in to the program prior to new program being implemented.  

Details will be provided as soon as they emerge. 


There have been some chatter recently concerning a potential move by Interval Leisure Group Inc., the recent acquirer of all Hyatt Residence Club properties, to convert the Hyatt Residence Club into a strict points system instead of the current hybrid system currently in place. 

As detailed in my complete guide to the Hyatt Residence Club, Hyatt currently operates a hybrid system where owners generally own a deeded week at a specific resort that equates into a certain number of Hyatt points.  This system provides the best of both worlds in that owners can either elect to use their specific deeded week or convert it into points and exchange within the Hyatt system or through its exchange company Interval International. 

In 2010, Marriott's Vacation Club underwent a complete restructuring where it went from a deeded week program to a points based program.  As detailed in my guide to the Marriott Vacation Club, new Marriott owners purchase points and use those points to trade within the Marriott system.  New Marriott owners no longer have specific deeded weeks associated with their points. 

According to the ILG conference call at the beginning of August, Craig Nash, the President and CEO of Interval Leisure Group, Inc. responded to a question from an analyst concerning the conversion of Hyatt to a pure points club. He stated:

"Yes, there are a lot of legal and technical initiatives going on around it. We are on track right now to move forward with that. The closing with Vistana is helpful, their Sheraton Flex is very similar to what we are going to be doing with HVO. The thing about the transition we don't expect lots of issues with the transition obviously there are learning curves. But they've always sold a points-based system even though it might have been a preference product where you got (inaudible) specific product, a location. You were still getting a points-based program which was part of the sales.

So this just provides them with ownership at a group of properties as opposed to one but the movement around the system is very similar so I think that might be a difference between others that have had more difficulty."



 In addition, in response to the question concerning whether existing members will be allowed to stay with the existing hybrid product or being forced to convert, Craig Nash said the following:

"... the beauty of having the system already sold where you can go around the system through the exchange program -- and I mean the proprietary branded exchange program -- is that a new product can be sold and people that had bought the other do not have to convert in to move around the system. They already are moving around the system."

In addition to this conference call, there have been various tidbits of information being leaked regarding the new program.  The potential name will be Hyatt Pure Points. 

Based on this, the key takeaways appears as follows:

1. Hyatt will be moving to only points systems that will be similar to the Marriott system and the Sheraton Flex system.

2.  Existing members will likely be able to stay with their existing product but may be motivated or encouraged to migrate to the new system.

3. If Hyatt does move to this new system, it is possible that Hyatt will be aggressive in exercising its Right of First Refusal in order to increase its available inventory in the new points program.

While this is all preliminary information, the key questions that remain are as follows:

1. Will existing owners be penalized if they do not migrate to the new system?
2. Will there be a conversion fee or other fee to participate in the new program? 
3. ILG also owns the Aston properties, Vistana timeshares (formerly Starwood properties) and Sheraton timeshares.  Will these properties be included in the new Hyatt system as a complete re-branding or will this just affect Hyatt properties?

There is sparse information at there at the moment but it appears that change is underfoot.  As more information is available, I will update this post.  Stay tuned for new developments....


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