Marriott Bonvoy today announced the move to fully dynamically priced hotel awards in 2023. We already wrote that this was their intention based on an internal document we had access to (read more here).
Flexible Point Redemption Rates will come into effect partially in March 2022, through the end of that year, and entirely from 2023. Members can continue booking awards at their current off-peak, standard, and peak rates through March 2022.
You can access Marriott Bonvoy here.
READ MORE: Marriott Bonvoy Rate & Bonus Points Offers
Here’s a note that we received from Marriott:
We are announcing the transition to Flexible Point Redemption Rates in March 2022. Rates will more closely resemble hotel rates and give members more flexibility and options to explore our portfolio when redeeming points for stays.
We will add more price points than the fixed off-peak, standard, peak rates for our members to give them more options when they are looking for the best redemption value.
Flexible point redemption rates will mean that more rooms overall will be available for redemption stays because our hotels will be able to better manage room inventory.
The award chart will go away in March; however, we expect redemption rates for nearly all hotels – more than 97% – will continue to range between their current off-peak and peak redemption rates for stays throughout 2022. That means less than 3% of hotels will have redemption rates in a higher range than where they are currently in the award chart. For stays beyond 2022, we will adjust rates based more closely on hotel rates.
Between now and March, the current award chart with peak off, standard, and peak rates remains in place.
A few things to note here:
Bonvoy expects that 97% of the hotels will require the number of points somewhere along the lines of their current off-peak and peak awards IN 2022.
When the Flexible Point Redemption Rates are fully rolled out in 2023, I assume that most hotels where members redeem their points will require more than today when the point rates go hand in hand with the paid ones.
Pros & Cons of dynamically priced hotel awards:
Accor, Hilton (premium room awards), and IHG have moved to entirely or partially dynamically priced hotel awards, making aspirational ones very expensive points-wise. You can read more at our previous article here:
- The price of the award fluctuates with the paid rates.
- Usually, all the taxes and fees, including resort ones, are included.
- You can use your points towards multiple rate types (Accor).
- Simplifies the program – makes it easier to understand for a casual member.
- You can mix and match points and cash.
- No need for the program to adjust hotel categories annually.
- It sucks all the fun of the program, making it essentially a cashback one.
- Stays at aspirational properties become extremely expensive in terms of points required.
- No point in swiping affiliated credit cards – cashback is better.
- You end up paying all the taxes, service, and resort fees that the hotel usually collects on paid rates that are generally excluded from awards.
- Cancellation rates are in hand with the paid rates, while static awards are USUALLY flexible.
- Free night certificates issued by cobranded credit cards must have a cash maximum.
- The number of points for awards wildly fluctuates with the paid rates.
- You can only use points towards most publicly available rates (some deeply discounted may be excluded like Accor).
- You likely earn free nights faster by using OTA programs or merely booking the cheapest rate available that hotel programs rarely match (10% to 30% off).
Current Award Chart:
Marriott Bonvoy awards are semi-dynamic already, considering that a hotel in each category has SIX different point requirements depending on OFF-PEAK, STANDARD, and PEAK combined with Saver and Standard.
You can already redeem Marriott Bonvoy points for Instant Rewards that you can use to offset your folio expenses:
The value of a Marriott Bonvoy point is 0.4 cents each, which is well in line with what IHG and Hilton points are worth.
How I expect Marriott’s new system to work:
You can currently book a five-night award stay for 400,000 points that would cost $12,405 if paid in cash with taxes/fees included.
When you move to fully dynamically priced awards and value Marriott Bonvoy point at 0.6 cents each, this same award would cost 2,067,500 points, an increase of 417%.
Le Meridien Bangkok
You could stay at the Le Meridien Bangkok for 120,000 points or pay 23,071 THB ($697). The price using points if you value Marriott Bonvoy point at 0.6 cents each would be 116,167 points.
Marriott Bonvoy members should evaluate if swiping cobranded cards from Chase, American Express, and others (there are cobranded cards outside of the US too) makes much sense after this move because they have essentially become cashback cards but with only one redemption option.
I would assume that Marriott will do something soon with the airline partner redemptions because they are the way to go after this round of devaluation. Surely, Marriott doesn’t want cash going out from the system to the airlines.
Dynamically priced awards make the planning of award stays increasingly difficult because the paid rates can fluctuate wildly, and so will the point requirements if they go precisely hand in hand. Also, the timing of award reservations becomes vital due to rate fluctuations.