Most Marriott Bonvoy members / InsideFlyer readers are hopefully aware of the massive, negative changes arriving on March 29, 2022. Tomorrow, Marriott will implement “dynamic pricing” of award nights.
With “dynamic pricing”, you will no longer know how many points you need to accumulate in order to stay at a specific hotel. The number of points required will instead fluctuate based on cash rates and occupancy levels. Although bloggers can sometimes exaggerate the negative impact of this on the majority of loyalty program members, that doesn’t change the fact that dynamic pricing is bad news for almost everybody who collects hotel points…
With that in mind, should you be spending most, or all, of your Marriott points before tomorrow?
Why you SHOULD spend your Marriott points
Certain hotels will definitely soon cost more
The most important thing to do before March 29th is analyze the list of hotels that will soon cost substantially more points. (click here)
If your preferred use of Marriott points is one or more luxury hotels on the list, you should make as many bookings as possible before the price increase. It is worth highlighting that PointsAdvance is competely useless for locking in award pricing. If you aren’t sure about your exact dates, you should book each night individually, allowing you to cancel individual nights if necessary. (of course you would lose the benefit of the fifth night free if your planned stay is long enough)
Marriott’s devaluation intentions are clear
No hotel chain implements dynamic pricing because they want to charge members fewer points on average. Even though you might not normally spend your points at Marriott’s most expensive hotels – those which unquestionably are going to cost up to 30% more – it’s also quite likely that other hotels will see smaller price rises, on average.
Perhaps counter-intuitively, it will still be possible to find value at hotels soon to cost 130,000 points per night, because the cash rate can easily be $1,000+. But what will really hurt – especially over time – is the 40,000 point-per-night hotel quietly costing 45,000 points.
I find it quite striking that all of Marriott, Hilton and IHG offer 10 points per US dollar spent. Yet Marriott points are generally considered to be worth at least 50-75% more than a Hilton or IHG point. Hilton and IHG do regularly make up the difference with double/triple point promotions and more generous elite tier bonuses. But I definitely forsee Marriott Bonvoy wanting to reduce the average value of a Marriott point to the same as its rivals – roughly 0.4-0.5 cents per point – and also run better promotions going forward if needed…
It is also interesting that Hilton Honors’ still has a price cap on its award pricing, many years after implementing its own version of dynamic pricing. Although on average a Hilton point is definitely worth less than before, they still come in very handy on high-demand, high-rate dates (assuming you can find standard room availability… and even better if you are staying for five nights). Marriott, however, has made no promises whatsoever about an upper limit on each hotel’s award pricing, starting in 2023…
The Points-to-Miles conversion ratio could be devalued at any time
I have written about this previously. Although Marriott is providing plenty of notice about the shift to dynamic pricing, they provided almost no notice about the disappearance of Travel Packages.
With the value of a Marriott point heavily supported by the fact that you can convert them into airline miles at an attractive ratio, Marriott will not hesitate to devalue the conversion ratio if necessary. And we might not get much, if any, notice…
Why there is NO rush
Unless you tend to collect hundreds of thousands of Marriott points to spend on high-end hotel stays, you won’t actually notice much difference. The vast majority of Marriott’s hotels will remain within their current category-based boundaries.
Although Marriott might nibble around the edges – a 35,000 per night hotel might start charging 37.000 points per night on average – and this would still be bad news… it would be far worse to rush out and waste your Marriott points.
An example might be booking a three night stay using points, instead of taking the time to plan a five-night getaway somewhere else. (fifth night free) Or worse… spending points when you would otherwise pay the cash rate.
Another example would be speculatively converting your entire points balance to your most-used frequent flyer program, instead of taking the time to look for a better option – at the time of booking your next firm trip overseas.
So, you should definitely redeem your points before tomorrow, but ONLY if you have a great use for them. Don’t just rush for the exits…
Marriott’s shift to dynamic pricing is bad news, especially if you have a large points balance. But unless you tend to redeem your Marriott points at a handful of ultra-luxury hotels, you shouldn’t really rush to spend your entire balance. The true pain won’t really be felt until 2023…
What do you think? Let us know in the comments section…