Reader Email: Ridiculously Low Marriott Award Reimbursement Rate?

A LoyaltyLobby reader sent us an email about a hotel folio that had displayed how much the property was getting reimbursed for the award nights.

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Email From The Reader:

Just stayed 7 nights at Al Manara Luxury Collection on points and certs. Got upgraded to a premium executive suite as titanium.

The hotel collected $44.60USD, on a room selling for roughly $500USD. The rooms were similarly priced during my stay.

Seems a crime for this amazing hotel to get shafted by Marriott.

Guest Folio:

How Much The Suite Was Going:

Random Weekday Rate

It is not uncommon for hotels to mistakenly display the daily rate that they are reimbursed for award nights (they should move those to another folio), and the rates tend to be really, really low. Sometimes they may even mistakenly charge it, and you need to fix this later with the customer service.

I had to go back and check what Marriott hotels tend to get reimbursed for award stays. I have the info from 2020 that may have changed since.

Luxury Collection hotel’s baseline award reimbursement rate is 45% of the prior year’s Average Daily Rate (some rate plans are not used for this ADR calculation). This means that this hotel’s ADR for 2021 should be roughly $125.

The reimbursement is more if the night’s occupancy is 85% or higher or the redemption penetration of the previous year is more than 5%.

You have to keep in mind that there are many rate plans that drag the Average Daily Rate down from those available for bookings on Marriott’s website, such as negotiated and OTA rates.

Hotels don’t get reimbursed for complimentary Platinum and higher member upgrades (space available). They may get something, not a lot, for Suite Night Awards.

Conclusion

Marriott has quite a complicated system in place to calculate the award night reimbursement rates for properties.

There are seven baseline scenarios that you must combine with occupancy and penetration rates. I am not sure how anyone can ensure that the correct amount is paid?

Marriott affiliated properties pay a loyalty program participation fee that varies from 1.587% to 4.2% of the guest revenue. The fee is used to award points, run the program, and reimburse for the award nights.

The problem with these programs is that guests tend to earn at one type of hotel (business properties) and then use their points when on leisure (resorts). It is challenging to develop a system that is equitable for all. Higher reimbursement rates would also mean higher loyalty program participation fees.