One of the interesting things about the introduction of Marriott Bonvoy is that Marriott made promises to two different groups that largely seem to contradict one another:
- Marriott promised lower costs associated with their loyalty program to hotel owners
- Marriott promised richer benefits for loyalty program members
I mean, who doesn’t want more for less? Well, not surprisingly some of the “cracks” of this plan have been exposed over time.
Marriott’s controversial breakfast benefit
One aspect of the Marriott Bonvoy program that has left many members disappointed and confused is the breakfast benefit for Platinum, Titanium, and Ambassador members:
- Unlike Hilton and Hyatt, Marriott doesn’t offer elite members complimentary breakfast at all brands; there are exclusions, including EDITION and Ritz-Carlton
- Marriott only promises “continental breakfast” even for those brands that do offer a breakfast benefit, and the quality of that varies significantly
Some of the Marriott Platinum breakfasts look like something you’d be served at Fyre Festival, while others are quite good.
A hotel owner’s perspective on Marriott Bonvoy
Diamondrock Hospitality is a company that owns quite a few hotels, including several properties managed by Marriott (here’s a map of their portfolio). For example, they own the Westin San Diego, Westin Fort Lauderdale, Chicago Marriott Downtown, and more.
During a recent earnings call, a Goldman Sachs analyst asked Diamondrock’s CEO the following:
I know you talked about the impact from Starwood and Marriott, the integration there. I don’t think I caught anything on the Bonvoy launch specifically, are you anticipating any revenue impact rather surprising changes as that is being rolled out in market now?
Here’s how the CEO of Diamondrock responded:
Well, so they’re rolling out a lot of them and they’re — you would you hope that your brand partners are being proactive in thinking about the future and — but they’re moving fast on, boy, probably a dozen different fronts. So on the Bonvoy and rewards program, they’ve made some changes and like you would expect when they were on new programs, for some of their hotels, it’s been really good and some we need to make adjustments with the new program.
So, I would say, our rewards cost in Bonvoy are down across our system, which has been good. Some of the contributions in some hotels are up and frankly some are down. And so, we’re working with them and they are agreeable to make adjustments where it’s fair to make adjustments. I’d say the one that we’re — we have been a little bit focused on is they — what — on your Bonvoy, they’ve given the leads who are their premium folks, free breakfast at resorts and they compensate us I think $7 a breakfast. But that’s one that in some markets make sense and in some markets probably is it’s too expensive. So that would be one that under the Bonvoy program we’re working with them on solutions to be equitable.
So if you’re wondering who picks up the tab for breakfast, it seems like the loyalty program does, but the reimbursement rates are really low, so the hotels are largely subsidizing the breakfast.
The bigger issue
This all sort of gets at the bigger issue that I think Marriott has. Marriott seems to have a hard time aligning individual hotels and owners with the greater mission of Marriott Bonvoy.
Offering an elite member breakfast shouldn’t just be about the direct reimbursement, but it should be about the bigger picture — that guest is more likely to stay at that hotel in the future, and is more likely to spend more money on stays.
But often that’s not how individual hotel owners view things. In a way I guess I can’t blame them, given just how big Marriott has gotten.
What do you make of the Marriott Bonvoy comments from Diamondrock Hospitality’s CEO?
(Tip of the hat to Dennis)