No reason at all they can't convey some of the Hyatt properties to the Sheraton Flex Trust. Then flex owners can book in to Hyatt at 12 months.
I just really don't see this happening. Aren't all the properties that are in the Sheraton flex a major step below most of the Hyatt properties? Are Hyatt owners going to want to be able to book in to Sheraton properties? Maybe, but it would be a small percentage if you ask me. There would be lots of Sheraton people clamoring to book in to Hyatt though.
No doubt HRC Corporate deeded weeks could be put into a trust for a pure points system - but HRC Corporate doesn't own a boat load of weeks as the majority of the Hyatt properties are mature/sold out. When you go thru the list of HRC properties, Hyatt only has active sales at a few properties as they have little inventory to sell. The only two properties that are not fully built are Coconut Plantation and Wild Oak - ILG/HRC could re-energize the build out at Coconut and Wild Oak, but there hasn't been any construction activity at either one for at least 8+/- years.
Note that the typical HRC TS property development model has been that Hyatt provides the brand & management while an outside development partner funds/constructs the buildings and own the weeks. The developer's profit comes from selling weeks, so the developer wants weeks sold in lieu of putting them into a points trust. HRC could buy the developer weeks, but seems like odd math for HRC to buy $45K to $100K weeks at Maui to put into a points trust.
While Hyatt has been randomly exercising ROFR for the past year, they have not amassed a stock pile of deeded weeks. And some of the KW weeks they've ROFR'd, they've turned around and sold on the open market for a $10K per week profit.
FWIW: Hyatt properties have always taken the "boutique" approach (Sunset Harbor has only 40 units) in lieu of the mega program like Marriott used - so Hyatt does not have 500,000 owners/members. Totally agree that few HRC owners will participate in a Sheraton/Hyatt points program for access to Sheraton properties.