Hyatt Hotels Corp. waited longer than any other major hotel chain to launch a cobranded credit card, but the Hyatt Visa Card, introduced Sept. 1 with JPMorgan Chase & Co., underscores a few significant trends emerging in the rewards cards arena, analysts say.
Annual fees for rewards cards generally are inching higher, for example. The Hyatt Card carries a $75 annual fee, which is one of the highest among hotel rewards cards, whose fees typically range between $30 and $65. And unlike rivals Hilton Worldwide and Marriott International Inc., Hyatt offers no lower-cost rewards card options.
Hyatt’s new card also provides several unusual “soft” benefits, with caveats, forcing rewards card addicts to scrutinize the dollar value of cards and spending preferences more carefully before considering a switch.
“This card is an example of the more-strategic approach issuers like Chase are taking to differentiate and adapt products in order to capture specific audiences,” Brian Riley, research director with TowerGroup, tells PaymentsSource. “A $75 annual fee is a little rich for a hotel card, but if you do the math, it’s probably precisely calibrated to appeal to a certain high-end traveler, most likely a Hyatt loyalist.”
With its above-average annual fee and sophisticated perks, Chase’s higher-end rewards card is starting to compete more directly with American Express Co., “which is no surprise, given the history of the guy running Chase’s card programs, Riley says.
Chase’s card-services chief, Gordon Smith, joined the company in 2007 after serving for more than 25 years at AmEx in a variety of capacities.
Hyatt’s new card carries no foreign-transaction fee, an unusual feature compared with most credit cards that charge on average a 3% fee for overseas transactions. Another new Chase card, the Priority Club Select Visa card cobranded with Intercontinental Hotels introduced in July, also carries no foreign-transaction fee (see story).
That feature is relatively rare. Among 500 cards the credit card comparison Web site NerdWallet.com analyzed this month, only five carried no foreign-transaction fee, including Capital One Financial Corp.’s cards that for years have charged no overseas transaction fees.
Hyatt also is offering two free nights stays at its hotels for new cardholders, with special upgrades to suites at any of Hyatt’s top-tier properties worldwide for elite-level members of Hyatt’s existing loyalty program.
Cardholders earn three points in the Hyatt Gold Passport loyalty program for every $1 spent at Hyatt properties, and one point per $1 spent elsewhere; points are redeemable for Hyatt hotel stays, with no blackout dates or resort fees. Cardholders automatically gain other benefits of Hyatt’s loyalty program, including a 15% point bonus for each Hyatt stay and complimentary Internet service at Hyatt hotels.
The annual fee for the Hilton HHonors Surpass American Express card matches Hyatt’s at $75, but Hilton also offers a variety of lower-fee and no-fee rewards cards. The Marriott Rewards Premiere Visa card carries an annual fee of $65; its basic rewards card carries a $30 annual fee, waived for the first year.
Hyatt’s points-earning program is not the highest in the market, but its signup bonus is one of the most generous available, says Tim Chen, NerdWallet’s founder and CEO. Hyatt also explains, “buried in the fine print,” that loyalty-program members’ entire points balance may expire after a year of inactivity, Chen notes.
Hyatt spent more than a year developing its card, including gathering feedback from frequent travelers and Hyatt customers, Val Greer, Chase Card Services general manager, tells PaymentsSource.
“The goal was to provide a card that was simple and enhanced hospitality,” she says.
Chase and Hyatt are promoting the card at Hyatt properties, online through the Chase and Hyatt Web sites, and in a print, digital and airport advertising campaign beginning this month, the companies said.
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