Marriott Bonvoy Devaluing Some Mileage Transfers

Marriott Bonvoy Devaluing Some Mileage Transfers

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Marriott Bonvoy is continuing to worsen the value proposition of some airline mileage transfers, which sets a bad precedent. We saw the first of these changes kick in as of November 1, and now we’ll see another change as of December 1.

Marriott ends 5,000-mile transfer bonus for some partners

One of the nice things about Marriott Bonvoy is that it’s the only hotel loyalty program where you can efficiently convert hotel points into airline miles without losing much value.

With Marriott Bonvoy’s airline mileage transfer program, you can transfer Bonvoy points to over three dozen airline miles at a 3:1 ratio. There’s an incentive to transfer Bonvoy points in increments of 60,000.

With the 3:1 ratio, you’d ordinarily earn 20,000 airline miles when converting 60,000 Marriott Bonvoy points. However, historically Marriott has offered a bonus of 5,000 miles when transferring 60,000 points, meaning that 60,000 points converted into 25,000 airline miles, giving you a real transfer ratio of 2.4:1.

This is in the process of changing. As of November 1, 2022, Marriott Bonvoy stopped offering the bonus of 5,000 airline miles for the following three partners:

  • American AAdvantage
  • Avianca LifeMiles
  • Delta SkyMiles

Now as of December 1, 2022, Marriott Bonvoy will stop offering the bonus of 5,000 airline miles for the following partner:

  • Korean Air SkyPass

With this change, when you transfer Bonvoy points to those partners, the ratio will be 3:1, regardless of the increments in which you do so. That obviously takes away quite a bit of value. On top of that, this sets a bad precedent, especially with this happening to a fourth partner as of December.

This is the first real devaluation we’ve seen to Marriott Bonvoy airline mileage transfers in a long time, and this has historically given the value of Bonvoy points quite a bit of stability, especially in light of other devaluations.

Bonvoy points transfers to AAdvantage are now less lucrative

Why would Marriott Bonvoy devalue these transfers?

I’m always curious about the motivation for loyalty program changes, and this is no exception. Why would Marriott Bonvoy suddenly devalue the efficient transfer ratios for just a few of the over three dozen partners? The way I view it, here are some of the possible explanations:

  • These programs raised the cost they wanted to charge Marriott Bonvoy for mileage transfers, and as a result that’s being passed on to consumers
  • These are the airline partners that Marriott Bonvoy members transfer the most points to, and Marriott wanted to reduce its costs associated with these transfers
  • These transfer partners strong-armed Marriott into discouraging members to make these transfers, because they felt this was cannibalizing their other revenue streams somehow; also keep in mind that Marriott Bonvoy and United MileagePlus have a special partnership, so I wonder how that plays into this
  • Marriott is progressively going to keep removing this from more partners over time, but doesn’t want to rip the band-aid off all at once

If I had to guess, I’d assume the answer is probably a combination of some of these points. I wouldn’t be surprised if these are the mileage transfer partners that cost Marriott the most, in terms of a combination of cost per mile plus frequency of transfers.

I also think that with Marriott Bonvoy having otherwise been devalued, we’re going to see devaluations to this feature over time as well. This is something that has otherwise been a constant for many years, so it’s not surprising to see this eventually change, unfortunately.

Bonvoy points transfers to SkyMiles are now less lucrative

Bottom line

Marriott Bonvoy is devaluing points transfers to four airline partners. Specifically, the bonus of 5,000 airline miles for transferring 60,000 Marriott Bonvoy points has been eliminated for American AAdvantage, Avianca LifeMiles, and Delta SkyMiles, and the bonus for transferring to Korean Air SkyPass will be eliminated shortly.

This sets a concerning precedent, since the ability to convert Marriott points into airline miles helps create a floor value for the program.

What’s your take on Marriott Bonvoy devaluing select mileage transfers?

Conversations (31)
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  1. iamhere Guest

    Converting hotel points to airline points was always a bad deal

    1. DCS Guest

      Converting hotel points to airline points was always a bad deal

      Yup. Allowing third party points to enter or leave a hotel loyalty program's ecosystem without any restrictions is, economically speaking, a loser.

      Starwood suffered by allowing the starpoint to be earned on non-hotel spend and then making their transfer to airline miles ridiculously favorable. What was the upside of such a scheme for Starwood? None. The chain simply became a bystander in the activities...

      Converting hotel points to airline points was always a bad deal

      Yup. Allowing third party points to enter or leave a hotel loyalty program's ecosystem without any restrictions is, economically speaking, a loser.

      Starwood suffered by allowing the starpoint to be earned on non-hotel spend and then making their transfer to airline miles ridiculously favorable. What was the upside of such a scheme for Starwood? None. The chain simply became a bystander in the activities of its own points currency and loyalty program, thus squandering all the advantages of what was supposed to be its "cash cow". That is what Marriott just stopped with this move to cripple the transfer of its points to airline miles.

      The flip side of the SPG model is the transfer of bank points to World of Hyatt points. Here again, points (e.g., Chase UR points) earned with any credit card elsewhere rather than on revenue stays at Hyatt hotels are used to book award stays at Hyatt hotels, thus making the chain a bystander, but only partially, in the activities of its own points currency and loyalty program. To tap a hotel loyalty program's potential to be a revenue driver, members must be forced to earn most of their points through revenue stays. That's what Hilton, IHG, Radisson and, once again, Marriott, achieve by making the transferability of points into or out of their programs unfavorable.

      The favorable transferability of UR points to WoH points has absolutely nothing to do with WoH points being "worth" more than the rest, as self-anointed "travel gurus" and their sycophants claim. It is simply that the number of points required to afford Hyatt award stays is arbitrarily much lower than for the other programs. The downside of that favorable transferability is what I just described above.The problem for Hyatt, as it was for SPG or Marriott, is that there is no upside to having bank points earned elsewhere enter or leave its loyalty program's ecosystem. The only thing saving Hyatt from a fate similar to Starwood's is that bank points transferred to WoH points are used by members to book award stays at Hyatt hotels instead of being transferred to airline miles, and that is because, unlike "aspirational" Starwood awards which were exorbitantly priced, Hyatt awards are much more affordable. In addition, the transfer of WoH points to airline miles is not as favorable as was the transfer of starpoints to miles.

      Now, maybe it's clear why Marriott has finally further devalued the transfer of its points currency to airline miles, which it had put on hold to "appease" rabid SPG loyalists...

  2. Sonny Guest

    Most devaluation hotel program with worst benefits.
    I never book with them. Even I have a silver elite status for my work (that doesn't give much anyway)

  3. Anthony Diamond

    I dunno - I'd rather spend 120K points on a luxury hotel than get 50K in airline miles, when you porbably need another 100K to get the flight and time you want. I've found much more reason to redeem Marriott points for hotels than to transfer.

  4. DCS Diamond

    Marriott's gutting of SPG-style points-to-miles transfers, initiated right after the merger with a 33% devaluation, has now been completed.

    On August 3, 2018, 1:25 am, I presciently wrote the following in this space:

    Marriott did not want to have anything to do with SPG's feature that incentivized members to transfer most of their starpoints to airline miles instead of keeping the revenue in-house by redeeming the points for award stays. However, aware that points...

    Marriott's gutting of SPG-style points-to-miles transfers, initiated right after the merger with a 33% devaluation, has now been completed.

    On August 3, 2018, 1:25 am, I presciently wrote the following in this space:

    Marriott did not want to have anything to do with SPG's feature that incentivized members to transfer most of their starpoints to airline miles instead of keeping the revenue in-house by redeeming the points for award stays. However, aware that points transfers to airlines were very popular with SPG loyalists, Marriott approached it cleverly: They left the structure of the transfer of points to airlines essentially unchanged, but disincentivize the practice – effectively crippling it – by limiting the number of points that can be EARNED THROUGH UN-BONUSED spend on their new co-branded CCs to the equivalent of earning 2/3 or 0.67x starpoints (from 1x.) That effectively changed the transfer of points to miles from 1:1 to 1 point for 0.67 mile.

    The end result is akin to transferring 10,000 (star)points to get only 6,700 miles. One can make up for it somewhat by transferring a large number of points, because the 5K bonus points for transferring points in multiples of 20K is still there. So, if you transfer the equivalent of 100,000K starpoints, you’d get back:

    100,000 * 0.67 + (100,000/20,000) * 5,000 = 92,000

    compared to

    100,000 + (100,000/20,000) * 5,000 = 125,000

    that one got with a 1:1 transfer of starpoints to miles + the 5K bonus for transferring starpoints in multiples of 20K

    The effective devaluation is: (125,000 - 92,000)/100,000 = 0.33

    i.e., a 33% devaluation.

    You can arrive at the 33% with simple subtraction. The SPG AMEX used to earn 1x on un-bonused spend. Under MR, one will be earning 2x in MR points, which is like earning 2/3 or 0.67x in starpoints:

    1x - 0.67x = 0.33x or a 33% devaluation.

    Like I said more than 3 years ago, from the git-go Marriott did not care much for SPG's points-to-miles transfer scheme. It's now decided to end it once and for all...

  5. JohnnyBoy Guest

    Time to burn, baby, burn my remaining Bonvoy points.
    The now ridiculously overpriced and devalued Brilliant card is already gone at the next renewal.

    Even IHG has a more rewarding points program now. They will eventually come to regret what they have done to kill brand 'loyalty'.

  6. Lee Guest

    To Tom's point, Marriott is at record profits. It is clear that the membership's pissing and moaning does not move the needle. Next year, when awards go fully dynamic, grab your ankles. Then, when award inventory disappears, that's when you realize they won't be using K-Y. Yet, some will still be shooting for Platinum.

  7. Alonzo Diamond

    Doesn't surprise me. Bonvoy points are fairly worthless imo. Takes so many points to get luxury nights at properties. Glad I transferred all of my points to Alaska a few months ago.

  8. Stvr Guest

    Sorry I think this deserves its own post. This is sick.

  9. DCS Diamond

    The favorable transferability of BONVoY points to miles, which Marriott Rewards did not have, was instituted to try to appease former SPG loyalists after the merger. Economically, the favorable transferability is bone-headed because there is nothing in it for Marriott and its ideas people knew it all along. The gutting of the transfers was going to happen; it was simply put on hold for "appeasement", which is no longer the program's strategy.

  10. Virginia New Member

    Add Korean Air to this list now -- just got an email over the weekend about that.

    1. DCS Diamond

      LOL. If Starwood was so great why did it go belly-up? Reverse of Darwinism or "the demise of the fittest"? Hardly. It was a flawed program, with the favorable transferablity of starpoints to miles being one of the biggest flaws that quite likely contributed to Starwood's demise.

    2. TravelinWilly Diamond

      Nice job at taking a throwaway nostalgic comment and spending waaaay too much time contemplating it.

      One might suggest a nice hobby for you.

    3. DCS Diamond

      Misguided nostalgia because the reality was not at all what the "God I miss Starwood" suggested...

    4. Jim Lovejoy Guest

      By 'go belly-up' you mean 'got bought out by Marriott for $13 billion'?
      I wish I could go belly-up like that.

    5. DCS Diamond

      It could have fetched a lot more if it had been profitable instead of on the brink of collapse when it went on the auction ...that type of 'belly-up.'

    6. DCS Diamond

      "Starwood Hotels CEO Frits van Paasschen resigns" (Reuters, February 17, 2015)

      ....
      “Our net rooms growth needs to be bigger and we’ll try to pull every arrow in our quiver that we can to make that happen,” [new CEO] Aron said.

      Paasschen’s departure comes less than a year after Vasant Prabhu resigned as chief financial officer.

      Starwood has underperformed rivals Marriott International Inc, Hyatt Hotels Corp and Hilton Worldwide Holdings Inc, which are...

      "Starwood Hotels CEO Frits van Paasschen resigns" (Reuters, February 17, 2015)

      ....
      “Our net rooms growth needs to be bigger and we’ll try to pull every arrow in our quiver that we can to make that happen,” [new CEO] Aron said.

      Paasschen’s departure comes less than a year after Vasant Prabhu resigned as chief financial officer.

      Starwood has underperformed rivals Marriott International Inc, Hyatt Hotels Corp and Hilton Worldwide Holdings Inc, which are less exposed to international markets.
      ....
      Up to Friday’s close, Starwood’s shares had risen about 3 percent in the past 52 weeks, compared with a 54 percent rise in Marriott’s shares and a 30 percent increase in Hilton’s shares.

      Q.E.D

  11. Ethan Guest

    Puzzled by why LifeMiles is included - It constantly sells at price way lower than Bonvoy price, easily acquired by tons methods, plus no way the program sells miles at a high bulk price.

    1. Lucas Guest

      If the advantages keep being taking away and why doesn't Marriott just shut down the loyalty program? It looks like the Marriott points are like trash now.

  12. tom Guest

    Reason #4 - they are beginning to pull up the bridge on cash out options ahead of gutting the program next year. I expect this to spread to other airlines also

  13. Anthony Diamond

    Unfortunate, but frankly I am surprised many of these transfers lasted as long as they did post merger.

    1) American wants you to earn AA miles via their card/partners
    2) Delta wants you to transact with Amex
    3) Avianca must be United related

    I have gotten good value out of Marriott with simple earn and burn on hotels, no real need to explore the transfers

    1. DenB Diamond

      @Anthony, I don't agree with your #3 but your final sentence is a revelation IMO. They want us burning points on hotel stays. So they strictly limit mileage transfer costs. the bean counters have moved in.

    2. Eskimo Guest

      @Anthony

      If you read between the lines, it the exact opposite.

      1) United doesn't want you to redeem AA miles.
      2) United doesn't want you to redeem DL miles.
      3) United doesn't want you to redeem AV miles.

      If you devalue those 3, guess what becomes more valuable to North American members.
      United? Wrong.
      Next on the chopping board will likely be,
      AC and TK.

  14. Harry Hv Guest

    There goes the last reason for even considering Bonvoy points, it was a reasonable route to acquire AA miles when Marriott had a 50% off sale on points like last week. The stinking 20% devaluation on AA transfers puts paid to that scheme. Bonvoyed again!

    1. Anthony Diamond

      This is a prime example of why the transfers were devalued

  15. FNT Delta Diamond Guest

    It wouldn't surprise me to see Marriott unveil something with United but if that was happening then you think this devaluation would apply to other airlines.

  16. Eskimo Guest

    Seems like United is having some influence over this change.

    That being said, Bonvoy already was devalued when they stopped the Hotel + Air package.

  17. Mike Guest

    If there's one thing I've learned, it's that the floor can always fall further with Marriott.

    1. Azamaraal Guest

      You said it! Bonvoyed again!

Featured Comments Most helpful comments ( as chosen by the OMAAT community ).

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Harry Hv Guest

There goes the last reason for even considering Bonvoy points, it was a reasonable route to acquire AA miles when Marriott had a 50% off sale on points like last week. The stinking 20% devaluation on AA transfers puts paid to that scheme. Bonvoyed again!

3
Mike Guest

If there's one thing I've learned, it's that the floor can always fall further with Marriott.

3
TravelinWilly Diamond

God I miss Starwood.

2
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