In recent days, Marriott Bonvoy seems to have implemented a relatively mild but widespread devaluation of points, whereby we’ve seen the cost of award nights at a large percentage of properties increase. The devaluation is significant enough so that it’s probably meaningful for Marriott, but minimal enough so that the company hopes that Bonvoy members won’t notice…
Marriott Bonvoy increases points requirements for awards
For a several years now, Marriott Bonvoy hasn’t published award charts. The program has dynamic award pricing — the number of points required for a stay isn’t strictly revenue based, but rather, varies based on a variety of factors.
While there can obviously be variability at a particular hotel in terms of award pricing, it’s also easy enough to tell when there are widespread changes across properties. Essentially, we’re talking about situations where Marriott has clearly tinkered with its award pricing formula, rather than just some property specific adjustments.
As flagged by LoyaltyLobby, it looks like over the weekend, Marriott made one such change, and we’ve just seen a 5-10% increase in award costs across the board. Those are just averages, with some properties having gone up in price more, and some having gone up in price less. It’s also noted how among all Bonvoy hotels in Bangkok, the average redemption value per point is now 0.56 cents (in USD), and that’s after factoring in taxes & fees.
Run of the mill Bonvoy redemption values are getting bad
I have to say that as time has gone on, the base level redemption value for Marriott Bonvoy points has truly gotten to be pretty bad. Of course pricing is variable, so it’s not consistently the case. Historically I’ve valued Marriott Bonvoy points at 0.7 cents each, and Hilton Honors points at 0.5 cents each. However, I’m increasingly feeling that a lot of Marriott Bonvoy points redemption rates are looking similar to those you’d expect from Hilton Honors.
As a totally random example, for an upcoming overnight near Frankfurt Airport, I see Bonvoy points basically give you just under 0.5 cents of value each, which is kind of awful.
And keep in mind it’s actually worse than that. When you redeem points, you’re forgoing the points you’d otherwise earn for a cash stay — as a top tier elite member paying with a co-branded credit card, I ordinarily earn 23.5x points per dollar spent, so that’s an additional 16%+ return (assuming a valuation of 0.7 cents per point). So to get 0.7 cents of value per point, you’d need to redeem at a rate where you’re getting well over 0.8 cents of value per point.
The properties where you’re most going to get outsized value are often on the very high end. For example, looking at an upcoming night in Venice, I can redeem 158,500 points when the St. Regis Venice would cost $2,600, while I can redeem 168,0000 points when The Gritti Palace would cost $3,700.
While those are both nice hotels, the reality is that this is what I’d call “points farm” pricing. They are trying to skim the market due to the number of Bonvoy redemptions, since they only have so many rooms to fill with cash rates. If you’re going to spend that much, there are better non-points properties to stay at. If I’d never be willing to pay these amounts to stay at these properties, then I also shouldn’t value my redemptions that highly.
The loyalty program economics here sure are complicated. We know that Marriott hotel owners are really unhappy with Bonvoy redemptions, but you know Marriott is just putting these better margins in its own central pockets, rather than doing anything for owners.
Bottom line
Marriott Bonvoy has quietly devalued its points, as redemption rates seem to have gone up an average of 5-10% in recent days. Of course that’s mild in the scheme of devaluations, but when spread across the entire network, that will translate to a lot more points being needed for a lot more redemptions.
While there are still opportunities to get great value with Bonvoy points, I’m finding base level redemption values to be pretty lousy nowadays, and frequently you’ll get just 0.5 cents of value per point, give or take. That’s not very exciting, especially when you consider the limited efficient ways to earn Bonvoy points.
What do you make of this latest Marriott Bonvoy devaluation?