In recent days, Marriott Bonvoy seems to have implemented a relatively mild but widespread devaluation of points, whereby we’ve seen the cost of award nights at a large percentage of properties increase. The devaluation is significant enough so that it’s probably meaningful for Marriott, but minimal enough so that the company hopes that Bonvoy members won’t notice…
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Marriott Bonvoy increases points requirements for awards
For a several years now, Marriott Bonvoy hasn’t published award charts. The program has dynamic award pricing — the number of points required for a stay isn’t strictly revenue based, but rather, varies based on a variety of factors.
While there can obviously be variability at a particular hotel in terms of award pricing, it’s also easy enough to tell when there are widespread changes across properties. Essentially, we’re talking about situations where Marriott has clearly tinkered with its award pricing formula, rather than just some property specific adjustments.
As flagged by LoyaltyLobby, it looks like over the weekend, Marriott made one such change, and we’ve just seen a 5-10% increase in award costs across the board. Those are just averages, with some properties having gone up in price more, and some having gone up in price less. It’s also noted how among all Bonvoy hotels in Bangkok, the average redemption value per point is now 0.56 cents (in USD), and that’s after factoring in taxes & fees.
Run of the mill Bonvoy redemption values are getting bad
I have to say that as time has gone on, the base level redemption value for Marriott Bonvoy points has truly gotten to be pretty bad. Of course pricing is variable, so it’s not consistently the case. Historically I’ve valued Marriott Bonvoy points at 0.7 cents each, and Hilton Honors points at 0.5 cents each. However, I’m increasingly feeling that a lot of Marriott Bonvoy points redemption rates are looking similar to those you’d expect from Hilton Honors.
As a totally random example, for an upcoming overnight near Frankfurt Airport, I see Bonvoy points basically give you just under 0.5 cents of value each, which is kind of awful.
And keep in mind it’s actually worse than that. When you redeem points, you’re forgoing the points you’d otherwise earn for a cash stay — as a top tier elite member paying with a co-branded credit card, I ordinarily earn 23.5x points per dollar spent, so that’s an additional 16%+ return (assuming a valuation of 0.7 cents per point). So to get 0.7 cents of value per point, you’d need to redeem at a rate where you’re getting well over 0.8 cents of value per point.
The properties where you’re most going to get outsized value are often on the very high end. For example, looking at an upcoming night in Venice, I can redeem 158,500 points when the St. Regis Venice would cost $2,600, while I can redeem 168,0000 points when The Gritti Palace would cost $3,700.
While those are both nice hotels, the reality is that this is what I’d call “points farm” pricing. They are trying to skim the market due to the number of Bonvoy redemptions, since they only have so many rooms to fill with cash rates. If you’re going to spend that much, there are better non-points properties to stay at. If I’d never be willing to pay these amounts to stay at these properties, then I also shouldn’t value my redemptions that highly.
The loyalty program economics here sure are complicated. We know that Marriott hotel owners are really unhappy with Bonvoy redemptions, but you know Marriott is just putting these better margins in its own central pockets, rather than doing anything for owners.
Bottom line
Marriott Bonvoy has quietly devalued its points, as redemption rates seem to have gone up an average of 5-10% in recent days. Of course that’s mild in the scheme of devaluations, but when spread across the entire network, that will translate to a lot more points being needed for a lot more redemptions.
While there are still opportunities to get great value with Bonvoy points, I’m finding base level redemption values to be pretty lousy nowadays, and frequently you’ll get just 0.5 cents of value per point, give or take. That’s not very exciting, especially when you consider the limited efficient ways to earn Bonvoy points.
What do you make of this latest Marriott Bonvoy devaluation?
For years we have paid for rooms in Europe and use the "free nights for short stays at a US hotel, like a courtyard. Maintaining status with Marriott gets you a lot of perks, particularly M club access abroad with free breakfasts and heavy hors d'oeuvres which can easily serve as dinner.
Just finished a 4100 mile trip to RGV, Texas and noticed the increased points up in all levels we used our "free" night in New Orleans for a treat, and the points required were quite high.
You've mentioned in previous posts about how the program awards hotels - basically they pay a marginal cost if a hotel isn't full and a fair-ish value rate if they are. So that makes points worth a lot less, ie, if they're paying $40 on a $300 room then the program values a point at 13% of what we would consider a CPP. And yet they still want to devalue! Of course it is the way of the world to devalue.
I'm in Bangkok at the moment and was scratching my head as to why the redemption rates seemed higher than 6 months ago...still, was able to book the St. Regis yesterday for 5 nights @ 40,000/night when they were charging over $400/night (inclusive of taxes and service fees) so not too bad!
So, you'll be revising your points valuations downward, right?
This is another reason why programs like Wyndham's are continuing to be so popular. No dynamic pricing, and the value is great. Of course there's the property portfolio to consider, but Wyndham has some really great stuff internationally.
Wyndham is creating a new 45k category in September and shuffling categories then, this is likely to be a significant devaluation.
i was able to redeem 5000 points in china for night last week.
now the cheapest hotel.in points across all of china over next year is 6500
Like always, one has to assess the value for an individual property redemption opportunity to determine it's merit. It's easy to forget that Marriott Bonvoy still offers strong earning on stays, and plenty of opportunities to accumulate bonus points. Credit card earnings for Bonvoy points have always been a bit disappointing.
One area that hasn't been recently devalued is points transfer to airline FFPs. The airlines devalue their FFPs plenty on their own, but...
Like always, one has to assess the value for an individual property redemption opportunity to determine it's merit. It's easy to forget that Marriott Bonvoy still offers strong earning on stays, and plenty of opportunities to accumulate bonus points. Credit card earnings for Bonvoy points have always been a bit disappointing.
One area that hasn't been recently devalued is points transfer to airline FFPs. The airlines devalue their FFPs plenty on their own, but point transfers to airline miles in a few FFPs can still make sense. It really depends on whether most points are earned via hotel stays or by credit card spend. For those who earn most Bonvoy points from hotel stays, the math works much better.
What do you expect with all of these "ALL TIME HIGH SIGN UP BONUSES!!!"?????
Two comments.
1) If they are going to charge more then the certificates from the credit cards should also increase to reflect this.
2) I think the dymanic rewards should be also based on the cash price and the occupancy. In some places the cash price can greatly differ based on the time of year, but the points required remains the same.
While many people say how worthless Marriott points have become consider...
Two comments.
1) If they are going to charge more then the certificates from the credit cards should also increase to reflect this.
2) I think the dymanic rewards should be also based on the cash price and the occupancy. In some places the cash price can greatly differ based on the time of year, but the points required remains the same.
While many people say how worthless Marriott points have become consider how easy it is to earn too. Furthermore, all of the major hotel chains are devaluing their points.
I was an Ambassador for 3 years. Gave up on Bonvoy. I pick the right hotel for me in whatever city I’m staying. Inconsistent elite experience based on property and constantly filling out missing stay request forms because hotels don’t post points. Done.
Marriott points have been pretty worthless for a long time. I am a lifetime Titanium Elite and have no reason to stay there as redemption rates are sky high even for mediocre properties and elite benefits are few and far between.
Getting 0.7 cents per point has always been impossible for me because I want to stay at places that I want to stay. Changing my habits just to get more "value" is crazy. I'm there to sleep in a safe space.
Frequent Milwr posted recently about Hilton point evaluations. Serms like all the major hotel chains are charging more points
I think you have to be flexible and strategic within a financial mindset. I just saved over $200 using points in Amarillo for a road trip from Denver to Austin...cause of summer travel demand rooms on a highway bonvoy property were over $300 a night...I got outbound and inbound nights for 21000 points each. There are deals available, just maybe not bucket list elite property deals...gotta adapt...money is money, savings are savings no matter the place.
Where did you book? The last time I was in Amarillo, the only tolerable Marriott properties were the downtown Courtyard and the Four Points. Both were about $120-$130 a night or around 20,000 Bonvoy points.
Also worth mentioning: with all of the devaluation, the 35,000 point certificates from the credit cards are basically worthless. Even Courtyards in a lot of small towns and cities are running more than that these days.
And often they seem intentionally priced at 36,000 or 37,000.
Then just add on a few miles - no big deal.
I just went to Marriott.com.
I searched for Sunday to Monday for Labor Day.
First page alphabetically- out of 40 properties 31 were under 25k.
4 were over 35k- two of which were near Disneyland and one was in Alaska.
One was $599 a night with no points rooms available.
If you have something data to back up your point I can’t find any.
How do you do a search without a destination?
Marriott Bonvoy points shouldn’t have been valued at 0.7 cents each for about past year. Unless you’re rounding up aggressively. lol. More like .65.
Marriott tend to be almost as overpriced as Hyatts. So I got off those bandwagons a while ago.
On a side note, I would gently push back on Venice. I think the Gritti Palace is probably one of the nicest properties anywhere in the Marriott portfolio. Especially the suites. The service is excellent. It's better than most Ritz-Carlton and most St. Regis properties. Plus, it has huge operating costs since everything has to be brought into Venice from the mainland.
I do think the St. Regis (formerly the Westin) in Venice is...
On a side note, I would gently push back on Venice. I think the Gritti Palace is probably one of the nicest properties anywhere in the Marriott portfolio. Especially the suites. The service is excellent. It's better than most Ritz-Carlton and most St. Regis properties. Plus, it has huge operating costs since everything has to be brought into Venice from the mainland.
I do think the St. Regis (formerly the Westin) in Venice is overrated since rebranding. It's just a generic international luxury hotel now. I wouldn't pay to stay there or at the JW Marriott in Venice.
I wonder if there's a correlation between properties managed by Marriott and properties franchised or licensed. I ask because Marriott really doesn't care what franchisees/licensees do as long as Marriott keeps getting its share of revenue. At Marriott-managed properties, Marriott gets money from both the revenue and from the management contract. So it's in their interest to keep the owners of managed-properties happier.
Agree 1000%! Franchisees are feeling similar impact, so they too are inclined to de-value Points during peak season.
Would love to see Marriott embrace concept of travel Windows for different Member tiers. Might help everyone schedule events accordingly
Perhaps its time to start shifting those Bonvoy points to airline programs.....
Marriott ruined a good think. Unfortunately they don't care about the owners, with them it's all about hotel stays. They have screwed "all" of those who were in thre "grest" original Starwood program. Marriott took away benefits and now charge fees to the 5 Star Elite members that once were free. Starwood took very good care of its owners that had invested 100's of thousands of dollars in the Starwood progrm. Not Marriott, they STUCK...
Marriott ruined a good think. Unfortunately they don't care about the owners, with them it's all about hotel stays. They have screwed "all" of those who were in thre "grest" original Starwood program. Marriott took away benefits and now charge fees to the 5 Star Elite members that once were free. Starwood took very good care of its owners that had invested 100's of thousands of dollars in the Starwood progrm. Not Marriott, they STUCK IT TO ALL STARWOOD OWNERS, ESPECIALLY THE ELITE OWNERS‼️‼️‼️‼️‼️
Making it impossible to use credit card certificates at all ends.
The 35,000 point free night from CC is getting more worthless. Even adding points the 60,000 limit is still getting harder to redeem at standard hotels.
Agreed. Glad I cancelled my card when it was up for renewal earlier this year. Switching to a cashback card is looking more and more attractive all the time.
I know that 0.7 cents/point has been the value you've used for a while, and it might still be applicable if you're dumping to an airline with good redemption rates, but I have to sincerely ask what the point is that you're going to knock that valuation down by a bit?
I'd ask the same thing with Hyatt (due to the big chart shuffle) and Chase (between the travel redemption hit on CSR and holding...
I know that 0.7 cents/point has been the value you've used for a while, and it might still be applicable if you're dumping to an airline with good redemption rates, but I have to sincerely ask what the point is that you're going to knock that valuation down by a bit?
I'd ask the same thing with Hyatt (due to the big chart shuffle) and Chase (between the travel redemption hit on CSR and holding the bag on Hyatt) - at some point it feels like you've got to just take a haircut on those valuations and tell folks that certain options just don't make as much sense anymore.
By the same token - why the devil are you putting Marriott spend on the Marriott card instead of CSR? Even with the devaluation dance, 4 WoH points>6 Bonvoy points. Using the Marriott card just seems highly suboptimal.
(Speaking personally, I haven't put any notable spend on my Marriott cards in /years/ if there's not a promo going on. Even with Chase tanking on CSR in many ways, 4 UR>6 Bonvoy between Hyatt and airline options.)
Stop hoarding points. Earn 'em and burn 'em. And, please, 'just say no' to Marriott. If we allow them, each of these billion-dollar multi-national corporations will slow-boil us all by shifting the goalposts under the guise of "dynamic pricing" or some other 'sane-washed' nonsense, while pocketing excessive profits by selling their fake-points to banks. This is the inevitable end-result of unregulated corporate pseudo-currencies. We can and should simultaneous 'vote with our feet' and also start...
Stop hoarding points. Earn 'em and burn 'em. And, please, 'just say no' to Marriott. If we allow them, each of these billion-dollar multi-national corporations will slow-boil us all by shifting the goalposts under the guise of "dynamic pricing" or some other 'sane-washed' nonsense, while pocketing excessive profits by selling their fake-points to banks. This is the inevitable end-result of unregulated corporate pseudo-currencies. We can and should simultaneous 'vote with our feet' and also start demanding baseline consumer protections, like mandatory advanced notice for devaluations and point value stability. Otherwise, the 'game' is nearly over.
Agreed. Points are a depreciating asset, so it's best to use them early and often. Sitting on points doesn't save you any money and only costs you more in the long run.
That's far too simplistic. I regularly save by only using my ALL points at Ibis hotels because of the lower opportunity cost. Does anyone even remember an Accor points devaluation?
Throwawayname, you do realize that Accor isn't even playing the same game (yet); ALL isn't a traditional 'loyalty' currency; it's a fixed revenue-rebate program. Your points are hard-pegged at 2,000 points = €40 off. By contrast, Marriott, Hilton, Hyatt, and yes, even IHG, are running highly manipulated central banks where they print billions of points, sell them to Chase and Amex, and then arbitrarily shift the purchasing power of those points overnight. So, MildMidwesterner is...
Throwawayname, you do realize that Accor isn't even playing the same game (yet); ALL isn't a traditional 'loyalty' currency; it's a fixed revenue-rebate program. Your points are hard-pegged at 2,000 points = €40 off. By contrast, Marriott, Hilton, Hyatt, and yes, even IHG, are running highly manipulated central banks where they print billions of points, sell them to Chase and Amex, and then arbitrarily shift the purchasing power of those points overnight. So, MildMidwesterner is correct; don't hoard points, earn 'em and burn 'em.
They don't even to resort to banks- they're selling points subscriptions! The point is that not all points are the same thing - holding a Flying Blue balance (no charts for any redemptions, track record of no-notice dramatic devaluations) is much riskier than having one with e.g. Ethiopian ShebaMiles (haven't devalued since the year dot).
Another Bonvoy devaluation? What a surprise. Devaluation will continue until we stop accumulating Bonvoy points via stays or credit card spending.
Your hypothesis of points-farm pricing rests on the implicit hypothesis that individual properties set their own redemption rates.
I do not know how you get that idea. From other blog entries, you clearly are aware how hotels are being compensated for honoring an award (specifically, they get close to the ADR if the property is at capacity).
Properties would absolutely kill Marriott if thet set their own redemption rates. Obviously, hotels' revenue management would simply...
Your hypothesis of points-farm pricing rests on the implicit hypothesis that individual properties set their own redemption rates.
I do not know how you get that idea. From other blog entries, you clearly are aware how hotels are being compensated for honoring an award (specifically, they get close to the ADR if the property is at capacity).
Properties would absolutely kill Marriott if thet set their own redemption rates. Obviously, hotels' revenue management would simply sell a few rooms at a fairly high cash rate and then completely fill up the property by charging ultra-low award rates. Disastrous for Marriott it would be, hugely profitable for the individual hotel.
It is not points farming. The reason is simply these are aspirational properties seeing high demand for awards. Marriott awards at those properties tend to have a fairly high range. But Marriott has a good way here to offer above-average redemption value at times (of course, not attractive enough to induce a high probability the property will sell out).
@ John -- Sorry, I'm not following your logic as to how my hypothesis relies on hotels setting their own award pricing (which I know they don't do)?
Let's just use very simple math. Let's take an "aspirational" hotel in peak season, and assume that 50% of rooms are booked with points, and 50% with cash (the actual numbers don't matter, but I'm trying to keep the math easy). If you only end up having...
@ John -- Sorry, I'm not following your logic as to how my hypothesis relies on hotels setting their own award pricing (which I know they don't do)?
Let's just use very simple math. Let's take an "aspirational" hotel in peak season, and assume that 50% of rooms are booked with points, and 50% with cash (the actual numbers don't matter, but I'm trying to keep the math easy). If you only end up having to sell a much smaller percentage of rooms for cash, it's easier to charge higher rates and skim the market. Furthermore, loyalty programs cause people to act irrationally, and maybe book a points hotel over a better hotel without a points program.
Properties like the St. Regis Venice and Gritti Palace are great (well, I strongly prefer the former to the latter, but I digress). My point is that they're charging Aman Venice and Airelles Venice cash rates, when they definitely wouldn't be trying to do that if it weren't for the loyalty program. That's all I'm trying to say, and I don't think that's unfair?
I think it's more straightforward than that. Marriott know which destinations are popular for redemptions among their members (e.g. Venice will see a lot more of them than Fuzhou or Belo Horizonte) and will adjust redemption rates to meet that demand.
The points pricing can be done either in tandem with setting room rates or as a separate process that arrives at a similar conclusion due to being subject to similar market forces (basically...
I think it's more straightforward than that. Marriott know which destinations are popular for redemptions among their members (e.g. Venice will see a lot more of them than Fuzhou or Belo Horizonte) and will adjust redemption rates to meet that demand.
The points pricing can be done either in tandem with setting room rates or as a separate process that arrives at a similar conclusion due to being subject to similar market forces (basically a hotel can only charge more than the competition if there is a large number of hardened loyalists who need to stay in that location).
Why would they charge inflated cash rates? This makes absolutely no sense.
Standard micro theory sugests by lowering the price, they would increase their profit. Sure, that leaves more room to honor award nights but that is far less profitable than increasing production/lowering the price up to the point where MR = MC.
Marriott will set award night point rates in a fashion that hotels have limited ways to exploit it (yes, we know there...
Why would they charge inflated cash rates? This makes absolutely no sense.
Standard micro theory sugests by lowering the price, they would increase their profit. Sure, that leaves more room to honor award nights but that is far less profitable than increasing production/lowering the price up to the point where MR = MC.
Marriott will set award night point rates in a fashion that hotels have limited ways to exploit it (yes, we know there are a few ways to game the system, e.g., through fantasy room categories; but generally, the hotel is hurting itself by inflating the price).
@john I think you and Ben are talking at cross purposes. My understanding is that Ben's saying that the cash rates don't reflect how much the rooms should fetch in the market given the quality of the hotel, and that this creates the illusion of the points providing lots of value.
The alternative way of looking at that information is to assume that the points rates are a controlled way for those hotels to...
@john I think you and Ben are talking at cross purposes. My understanding is that Ben's saying that the cash rates don't reflect how much the rooms should fetch in the market given the quality of the hotel, and that this creates the illusion of the points providing lots of value.
The alternative way of looking at that information is to assume that the points rates are a controlled way for those hotels to get rid of inventory without having to price everything more competitively, similar to what airlines do with award tickets.
Why would they charge inflated cash rates? Because they can!
I think Ben's explanation above does a great job. Properties like this aren't setting cash prices to sell anywhere close to 100% of rooms for cash. They are setting prices to establish an artificially high ADR, which both increases the redemption amount they receive from Marriott AND encourages more points booking. They are using price as a signal to points-holders of "what a great...
Why would they charge inflated cash rates? Because they can!
I think Ben's explanation above does a great job. Properties like this aren't setting cash prices to sell anywhere close to 100% of rooms for cash. They are setting prices to establish an artificially high ADR, which both increases the redemption amount they receive from Marriott AND encourages more points booking. They are using price as a signal to points-holders of "what a great deal!" they can get redeeming their points.
Think about any retailer that regularly discounts its merchandise (IE Jos A Bank from a few years ago, when buying 1 pair of pants would net you 3 shirts, 2 ties, 1 pair of socks, etc.). They artificially 'charge' a high sticker price (the cash price in the hotel world) to drive more discount sales (points redemptions). The retailer knows some people will pay the high sticker price, but its happy selling to most people at the steep discount.
I can find plenty of examples:
-MSRP for cars - while some cars are sold at/above MSRP when there is a shortage, MSRP is basically a made-up number so dealers can say "What a great deal you are getting paying X below MSRP!")
-Discount clothing chains (TJ Max, Marshalls, etc.) regularly put a "Compare at" price (IE shirt selling for $30 and a "Compare at $80" price) to signal a good deal even if that "Compare at" price is basically made up.
-Airlines and hotels will sell flights and rooms through travel consolidators or vacation packages in a way that masks their price, so consumers can't compare "XYZ hotel night at PDQ hotel purchased direct vs. purchased via consolidator"
No credit card links, so everyone can easily attain the amazing benefits of Bomvoy Platinum status?
@ Gene -- I don't think I suggest that Platinum status is amazing? What I do suggest is that if you stay at Marriotts with any frequency, having status is better than not having status, and it's easy to make the math on the Brilliant Card work, in terms of recouping the fee through benefits other than the status.
Sometimes it makes sense to stay at Marriott affiliated properties not because they're Marriotts, but because...
@ Gene -- I don't think I suggest that Platinum status is amazing? What I do suggest is that if you stay at Marriotts with any frequency, having status is better than not having status, and it's easy to make the math on the Brilliant Card work, in terms of recouping the fee through benefits other than the status.
Sometimes it makes sense to stay at Marriott affiliated properties not because they're Marriotts, but because they're good hotels in spite of their affiliation with Marriott.
They know they can do this and still have the one of the largest loyalty program in the world and the largest footprint of any hotel groups in the world’s history. For now. One day when they build the first hotel on the Moon and in Mars, I can guarantee you it will be a Marriott property. And United will be flying that route on a MAX 8.
How do you define that 'largest footprint in world history'?
Marriott have fewer than 10k hotels when H World Group have more than 13k. Admittedly most of H World's hotels are located in China, but, if you exclude hotel in a group's country of origin, Marriott are still second, this time to Accor.
In fact, because H World and Accor are already working together, it's quite possible that we'll see a partnership between them,...
How do you define that 'largest footprint in world history'?
Marriott have fewer than 10k hotels when H World Group have more than 13k. Admittedly most of H World's hotels are located in China, but, if you exclude hotel in a group's country of origin, Marriott are still second, this time to Accor.
In fact, because H World and Accor are already working together, it's quite possible that we'll see a partnership between them, in which case Marriott may end up having half the hotel count of the world's biggest hotel system.
Marriott are enormous in the USA, but their footprint elsewhere, and particularly in the global South, is lousy and consistently overpriced.