Over the past several months, Marriott has been making a series of changes to its Bonvoy program, each new change representing a devaluation of Marriott points. As Marriott implemented those changes, we knew that yet another major devaluation was on the horizon – the implementation of Peak/Standard/Off-Peak pricing. Well, Marriott has now announced a start date for Peak/Standard/Off-Peak pricing, and it will begin on September 14, 2019.
We’ll review the changes announced by Marriott quickly, and then give you our thoughts.
Marriott Changes Coming as of September 14
1. Peak/Standard/Off-Peak Pricing
Up to now, Marriott has used an award redemption chart with a single points redemption rate for each Category of hotel. Category 1 hotels cost 7,500 points per night; Category 2 hotels 12,500 points; and so on, up to the highest tier of Category 8 hotels, which cost 85,000 points per night.
Starting September 14, however, there will be 3 tiers of award pricing for each Category of hotel – Peak, Standard and Off-Peak. Here’s what the new chart will look like:
As you can see, on dates designated as “Peak,” award rates will be higher, by as much as 15,000 points for the most aspirational Category 8 hotels.
Marriott also announced that it intends to update and adjust which nights are designated as Peak/Standard/Off-Peak periodically, perhaps monthly.
If you make a reservation prior to September 14 at the prevailing award redemption rate and the rate goes down later, you will need to cancel your original reservation and re-book to get the lower rate.
Finally, Marriott’s announcement claims that, “Across the entire portfolio, Standard rates will be offered the majority of the time with the rest being an equal distribution of Off-Peak and Peak rates.” This language makes it sound like implementation of Peak/Standard/Off-Peak pricing will be “fair” and “even-handed.” But note that Marriott’s language says that things will be even “across the entire portfolio” – not for any particular hotel. And, of course, we really have no way to effectively monitor whether Marriott complies with this statement, much less enforce it if Marriott suddenly has a lot more Peak dates than Off-Peak.
2. Changes to Points + Cash Rates
Marriott has also announced changes to its Points + Cash Rates chart. Starting September 14, the new chart will look like this:
Honestly, we have hardly used Points + Cash Rates. We are put off by the fact that the cash part of the rate doesn’t earn Marriott points. And based on our experience, the Points + Cash Rate rarely, if ever, turns out to be the best choice – either the all-points rate or an all-paid rate is better.
3. Changes to “5th Night Free” Benefit
Also as of September 14, Marriott will change its “5th Night Free” benefit to a “Stay for 5, Pay for 4” benefit. This change incorporates the fact that different nights for a 5-night stay may now have different award redemption rates, whereas in the past, each night would cost the same amount of points. Thus, under the new “Stay for 5, Pay for 4” benefit, the lowest-priced night will be the “free” night.
One could argue that a “fairer” scheme would be to take the average cost of the 5 nights and deduct the one-night average from the total cost. That would be better for customers. That said, this seems like a change that won’t have a huge impact on redemptions or value.
4. Changes to Marriott “Points Advance” Bookings
Under Marriott’s “Points Advance” benefit, Bonvoy members are able to make award bookings even if they don’t have sufficient points in their account at the time of the booking. Points are deducted at a later date when the member has sufficient points to pay.
This has always seemed like a generous policy to us. Yet, we have mixed feelings about it, because it provides opportunities for people to “game” the system by making multiple speculative bookings, many of which they have no intention of keeping. This practice reduces the number of award rooms available to people who would genuinely intend to stay and use the reservations. We don’t like the “gaming” of this benefit, so we’re not sad to hear that Marriott is taking steps to curtail the “gaming” potential. In fact, we’re happy that Marriott is making changes to make this benefit sustainable going forward.
Here’s what Marriott will do with respect to “Points Advance” bookings, beginning September 14:
- You will only be able to have 5 Points Advance bookings as of September 14. These reservations will be honored at the current award redemption rate.
- After September 14, you will only be able to hold 3 Points Advance bookings at a time.
- For Points Advance bookings made on or after September 14, the award redemption rate will be the rate in effect at the time your points are applied, rather than the rate at the time the reservation was made.
- For Points Advance bookings made before September 14, the award redemption rate is supposed to be the rate in effect at the time your booking was made (not when the points are applied). We note that application of this rule may be bumpy in practice and may require lengthy calls to Marriott to straighten out, if the award rate went up between your date of booking and the date your points were applied. This happened to many people earlier this year who had booked Category 8 hotels at Category 7 rates using Points Advance.
Our Observations, Analysis and Strategy Tips
(1) The nights that you’d most want to book using points – popular locations and popular, high-rate dates – are the ones that are going to become Peak dates with higher pricing. This change reduces the opportunities to get outsized value with Marriott points. Thus, it represents a significant devaluation to the Marriott Bonvoy program.
(2) We’ve known for months that Peak/Standard/Off-Peak pricing was coming, we just didn’t know exactly when. We’ve also known for months what the redemption rates would be for each tier and each Category. The only real new piece of today’s Peak/Standard/Off-Peak pricing news is the date it will take effect.
(3) Following on to the previous note, the real news will come on September 14, when we can see how Marriott actually implements Peak/Standard/Off-Peak pricing. We know they say it will be fair and even-handed “across the portfolio.” But how will it actually play out? We expect most of the dates you’d actually care about to go up to Peak pricing. Stay tuned.
(4) As of today, Marriott’s booking calendar is open through July 31, 2020. Before the changes take effect on September 14, most if not all of August 2020 also will have opened up for booking. This means that we have an opportunity now to book all rooms at Standard pricing for pretty much the entirety of Summer 2020. Many of these popular dates and locations will become Peak dates with higher pricing come September 14. So, get your Summer 2020 vacation rooms booked now!
(5) Property managers know what we just observed in point #4 above. We are concerned that high-demand dates at popular hotels may be effectively “blacked out” by hotel managers prior to Peak pricing taking effect. We definitely saw the same thing happen a few months ago, in the last few weeks that Category 8 hotels were available at Category 7 award rates. (You may recall that we wrote about this game-playing by Marriott properties in one of our most-read articles ever, Losing Trust: Marriott Blocked Award Availability; Now It Magically Re-Appears After Prices Increase (March 6, 2019).) For this reason, if you see availability that interests you, we recommend that you book it quickly, using Points Advance if needed.
(6) Peak pricing significantly devalues the 35,000-point free night certificates that come as a benefit of several Marriott co-branded credit cards. Up to now, the certificates have been redeemable at a Category 5 hotel at any time there was award availability. On and after September 14, however, they will not be redeemable at Category 5 hotels on Peak nights. That is, they won’t be able to be used on the nights when they have the highest value under the current rules. That’s a significant devaluation of the certificates. It may impact your decision whether to keep or cancel your Marriott co-branded card the next time your annual fee posts. And if you’re looking to redeem a certificate at a Category 5 hotel, definitely make your booking before September 14 if at all possible!
(7) Similarly, Peak pricing significantly devalues the 50,000-point free night certificates that come as a benefit of the Chase Ritz-Carlton Visa card and the Amex Bonvoy Brilliant card. Those certificates will no longer be redeemable at Category 6 hotels on Peak nights, which is a significant devaluation. There’s one piece of potentially offsetting good news here, though, which is that the 50,000-point certificates will become redeemable at Category 7 hotels on Off-Peak nights, which hasn’t been possible.
(8) The fact that Marriott will adjust periodically which nights are Peak/Standard/Off-Peak means that if you book a Peak or Standard night, you’ll want to monitor it to see if the award redemption rate drops at any point. If so, you’ll want to cancel and re-book to get the lower rate.
Those are our primary observations and strategy tips for now. We’ll circle our calendars for September 14 to see how Marriott actually implements these changes. In the meantime, we’ll strategize on how to best use our points and certificates before Peak pricing goes into effect!
Hat Tip to Frequent Miler for providing the full text of Marriott’s email regarding these upcoming changes.
What are your thoughts on the changes Marriott announced today? Any other strategies that should be implemented now? Please share with us and other Middle Age Miles readers in the Comments!
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