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Middle Age Miles

New Marriott Hotel+Air Packages Announced: Book Now, Huge Devaluation Coming!

Executive Summary

Marriott just announced its new Hotel + Air Package chart that will go into effect sometime in August.  It is a huge across-the-board devaluation.  Most relevant packages will cost about 30% more in Marriott Rewards points when the new chart goes into effect.  If you’re interested in a Marriott Hotel + Air Package, book it before July 31!

Details & Analysis

Marriott’s Hotel + Air Packages involve redeeming Marriott Rewards points for a 7-night certificate that can be redeemed at a Marriott portfolio property plus miles in one of many airline frequent flier programs.  Historically, and continuing now through the end of July, the number of Marriott Rewards points necessary for a redemption has depended on (a) the category of hotel the certificate can be redeemed for, (b) the number of airline miles to be received, and (c) which airline you chose to receive miles in.  These packages have generally been viewed as giving great value for Marriott Rewards points.  Over the past two years, I’ve redeemed four Hotel + Air Packages myself.

Here is one of Marriott’s current award charts, which applies to most of the programs that are particularly relevant to US-based flyers (including American, Delta, Alaska, Air Canada and British Airways; Southwest was on a separate chart but the packages and prices were the same as shown on this chart):

Other airline programs had different charts.  The chart for United was the same as the chart pictured above, except that each package earned 10% more United miles (for example, looking at the upper left entry in the chart, a Category 1-5 package costing 200,000 Marriott Rewards points would earn 55,000 United miles, compared to only 50,000 miles with American, Delta, etc).  A chart for most of the other foreign airline programs earned fewer miles for corresponding packages.

As many readers know, the Marriott Rewards program is undergoing major changes as of sometime in August (the exact date has not been announced), as Marriott fully integrates the Marriott Rewards, SPG Preferred Guest and Ritz-Carlton Rewards programs into a single loyalty program.  You can access the official Marriott page summarizing the changes here.

For purposes of this analysis, it is important to know that Marriott is completely revamping its hotel category system, and this is very confusing.  For comparison purposes here, we’ll look at Category 1-5 packages on the old chart to Category 1-4 packages on the new chart.  This is an apples-to-apples comparison, as the standard redemption rate for Category 5 hotels under the “old” system was 25,000 Marriott Rewards points per night, and the standard redemption rate for Category 4 hotels under the “new” system is also 25,000 points per night.

As part of the integration process, today Marriott announced its new pricing chart for Hotel + Air Packages:

The new chart is substantially simplified.  It’s a single chart that covers all participating airlines, except United.  United packages will still earn 10% more miles, so for United these package prices will get you 55,000 miles instead of 50,000, or 110,000 miles instead of 100,000.

The analysis of this upcoming change is straightforward – it’s a huge devaluation across the board.

Let’s look at a 7-night/100,000-mile package on American/Delta/Alaska/Southwest, for a Category 1-5 hotel. (This also applies to a 7-night/110,000-mile package on United.)  This package costs 250,000 Marriott Rewards points under the current chart.  It will cost 330,000 points under the new chart.  This is an increase of 80,000 points, or 32%, to get exactly the same thing.  Ouch.  Huge devaluation.

We can also look at a 7-night/50,000-night package.  This costs 200,000 points under the current chart, and 255,000 points under the new chart.  55,000 additional points to get the same thing; increase of 27.5%.  Ouch again, huge devaluation.

The situation is slightly better if you are interested in another foreign airline, such as ANA or Lufthansa.  In that situation (still looking at “old” Category 1-5 packages and “new” Category 1-4 packages), your current/old package would have been 220,000 points for a 7-night certificate and 50,000 miles, whereas a new package for 7-night certificate and 50,000 miles would cost 255,000 points.  That’s an increase of 35,000 points, or 16%.  Better, but still ouch and still a big devaluation.

You can slice and dice this any way you like, but the bottom line is, the new chart is a huge devaluation for Marriott Rewards Hotel + Air Packages.

To the extent there’s any good news, it’s that Marriott gave us a short heads-up on the new chart and impending valuation.

The strategy here is obvious and straightforward – if you’re interested in a Marriott Hotel + Air Package, book it before July 31.

[I would add that I’d go ahead and book the 7-night certificate into a hotel before July 31 as well.  Marriott has not announced what will happen to unredeemed certificates when all of the new Marriott Rewards rules go into effect sometime in August, so there is substantial uncertainty on this point.  Frequent Miler has written a good article that gets into the nuanced detail and provides some guesses and recommendations, which you may access hereI would say that you’re best to just use your certificate to lock in a hotel now.  If whatever happens to unredeemed certificates is bad for certificate holders, then you’re protected.  Or, if whatever happens to unredeemed certificates is good for certificate holders, you can cancel your reservation, and you should be able to take advantage of whatever greater benefit certificate holders have then (either in terms of getting points back, redeeming for a higher-category hotel, or getting access to a Starwood hotel that you can’t book now).]

 

What are your thoughts and strategies with respect to the Marriott Hotel + Air Packages?  Is there something you thing we’re missing here?  Let us know in the comments!

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One thought on “New Marriott Hotel+Air Packages Announced: Book Now, Huge Devaluation Coming!

  1. JBTx

    Great article. Loved the recommendation in the last part of the Article – book into the Hotel of your choice (assuming you have one in mind) and if there happens to be a situation where you can get a windfall, you can always cancel the reservation and take the points instead.

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