Dad's Hyatt Diamond Challenge

As I mentioned yesterday, there's a lot of compelling reasons to switch to Hyatt Hotels, including top tier free night redemptions at amazing properties like the Park Hyatt Sydney.

But some of the better perks of Hyatt loyalty (top tier Diamond status) are the "best room" upgrades and free breakfasts in addition to the regular perks like extra points and free internet.

However, to achieve Diamond status, you need to have 25 different stays or 50 nights at Hyatt hotels during a calendar year. 25 stays / 50 nights is slightly more than 2 weekend stays a month - probably not for most normal families and not even for this Lapchild frequent flyer.

In addition to being difficult to reach Hyatt Diamond status, it's even harder when you have to stray from elite status at Starwoods (where my father has permanent Gold Status from his job 10 years ago) or Hilton (where he has free Gold Status through March 2015) to go to a new hotel program where he has no status. That's a tough pill to swallow for an elitist like my father accustomed to getting VIP treatment at check-in.

But as my father constantly tells me, "Hotel Loyalty isn't about actually staying at hotels. It's about working the system."

Hyatt Diamond Status Challenge

So he discovered that Hyatt will offer a Diamond Status Challenge if you have top tier status at a competing hotel chain. If you call/email Hyatt and show proof of your hotel loyalty, they will give you temporary Diamond status for 60 days to check out Hyatt as you demonstrate you're a frequent traveler worth acquiring.

If you can stay 12 paid (cash) nights during those 60 days, then you'll keep Diamond status for the rest of the program year (usually through at least Feb 28 the following calendar year).

So knowing he had a few Park Hyatt stays (using Hyatt points transferred from his Chase Ultimate Rewards account) coming up later in 2013 in both Argentina and France, my father thought it made sense to try to get Diamond status to enhance those vacations.

Now, it was late February, and he had 2 ways to skin this cat. First, he could actually accept the challenge and pay to stay 12 nights in 60 days. Or, he could time his request so that the Diamond challenge period would cover the dates of his Hyatt award stays (early April and late May) but not even try to stay 12 paid nights.

Originally, he was leaning towards the latter as it was a significantly smaller investment of his time and money. But after doing some research and doing some math (my father loves math), he came to the conclusion that it was worth it for him to spend some money to get Diamond status and earn a lot of Hyatt points quickly.

Diamond Status Challenge Math
Here's the fact pattern he used to reach his conclusion

• We were already planning to stay at the Park Hyatt Mendoza in Argentina for 4 nights (March 29-April 2) and paying cash (because it was relatively cheaper to use cash than Hyatt points).
• We were already planning to stay at the Palacio Duhau Park Hyatt Buenos Aires on points (April 2-4)
• We had 3 nights (March 7, 8 and 9) where we potentially needed hotel (cash) stays.
• Hyatt was running their annual Spring Promotion (March 1-May 31) where they would give you 3,000 bonus points after every 3 paid nights.
• The Diamond Challenge gives you 1,000 additional bonus points for each of the first 6 paid nights during the 60 day period.
• Diamond status members earn a 30% point bonus on their Hyatt stays.

So my parents could reasonably get to 7 nights without much additional effort/cost. But was it worth it to "mattress run" for the remaining 5 nights?

Similar to a Mileage Run where a frequent flyer will take an unnecessary flight just to earn miles and achieve status, a Mattress Run is where you stay at unnecessary hotels for the same reason.

Based on my father's math, if he did the Diamond challenge now (March 1-April 30) but only paid for the 7 nights he needed ($175/night average), he would get the following:

• 30% Diamond Bonus = 1,800 points
• 500-1,000 point Diamond Welcome Amenity at check in (for US hotels) = 1,000 points
• 1,000 bonus points for first 6 stays = 6,000 points
• Spring Promotion bonus = 6,000 after 6 nights
• 4 Suite Upgrade Awards = 24,000 points equivalent
• 7 free breakfasts

Note that I didn't include the 5x base Hyatt points for the 7 stays (6,000 points), because I'm just focused on the incremental points generated by asking for the Diamond Status challenge.

So to earn an incremental 38,800 Hyatt points (conservatively valued at 1.5 cents/pt or $582 in total) and get 7 free breakfasts for 2 people (assuming value of $10/breakfast, that's an additional $70), it was clearly worth asking for the free Diamond challenge during the 7 paid stays he would have needed anyway.

But if he found another 5 nights at around $100/night, he would earn:

• 5x base Hyatt points per stay = 2,500 points
• 30% Diamond bonus = 750 points
• 500-1,000 point Diamond Welcome Amenity at check in (for US hotels) = 2,500 points
• Spring Promotion bonus = 6,000 after nights #9 and #12
• Diamond Status from May 1-Feb 28, 2014

So wasting investing an additional $500 USD, he would earn an additional 11,750 Hyatt points ($176 of value) and Diamond Status for the rest of 2013 including our Paris trip in late May.

But my father generally redeems his points at a higher value than 1.5 cents/pt. So the 11,750 points would be half a night at the Park Hyatt Paris Vendome (which goes for 22,000 points/night or $800 USD/night). You could say the points were getting him about $400 of value for this specific redemption. And since breakfast at the Park Hyatt Paris Vendome runs about 30 euro/person ($40 USD), we'd be getting 2 free breakfasts for 5 nights or about $400 total.

Now admittedly, my father would never PAY $800 a night for a hotel nor would he PAY $80 for a 2 person breakfast, so the marginal points and benefits aren't worth $800 to him, but he'd still be getting that value nonetheless.

Additionally, if he signed up for the Chase Hyatt Visa credit card right now after he was given Diamond status, he would receive:

• 2 free nights in a suite at any Hyatt property in the world = 66,000 points equivalent
• 20% bonus on the Hyatt Spring Promotion bonus x 12 nights = 2,400 points
• $100 statement credit (current promotion) to offset the $75 annual fee

In aggregate, for pulling off this scheme, he'd earn about 124,950 Hyatt points for a total cost of 12 paid nights (7 of which he was going to need anyway) or $1,900 total.

• 7 Normal Vacation Nights = $1,350 (including taxes)
• 5 Additional Mattress Run Nights = $550 (including taxes)

But 125k Hyatt points could be redeemed for 5 nights at a Category 6 Park Hyatt (that usually costs $500-800+/night) if you like redeeming for aspirational stays at exotic/international places you could otherwise not afford.

Or they can be used for 25 nights at a Category 1 Hyatt House ($75-100/night) if you're more focused on saving money when visiting friends/family across the country. 

Conclusion

Since my father is a finance guy, he likes to conclude with how great a deal it is when he can make up to 2x his investment in just 60 days (that's a 67% annualized return on investment). And it's all tax free!