Yesterday we learned that Marriott is going to let former Starwood hotel brands limit award redemptions on high demand dates during the year, matching what legacy Marriott brand hotels could do.
Instead of getting rid of these redemption restrictions entirely, as we had been led to believe was the roadmap for the new program, they’re going backwards under pressure from hotel owners.
There’s been a lot of misinformation spreading since the change became public (on blogs, Marriott still hasn’t told its members) so I wanted to correct these misimpressions.
Westin Austin Downtown
How This Removes Real Value From The Program
Starwood pioneered what they called ‘true redemption’ – not just “no blackout dates” where you couldn’t use your points at all, but also “no capacity controls” so if a standard room at a hotel was being sold for cash you could also use your points.
When there’s a fixed points price for a room, that’s a great opportunity to use your points when rooms are expensive. Hotel chains have moved away from fixed prices, with IHG and Hilton hiding their award charts altogether and Marriott and soon Hyatt introducing peak and off peak prices, all geared towards forcing members to top out at average value redemptions and prevent the sort of home runs a member might get redeeming rooms during the Super Bowl or a Presidential inauguration.
Marriott is taking away the ability to get the most value out of points at former Starwood brand properties, who will be able to limit the number of redemption nights at the property during their highest demand periods. That’s the end of peak of peak period redemptions at these hotels.
Doesn’t Peak Pricing Take Care Of This Problem?
Marriott added peak and off peak pricing last year, so for instance a category 8 hotel that’s 85,000 points per night might be discounted to 70,000 points (say, Dubai in the scorching summer time) or increased to 100,000 points (when you probably want to stay there).
They’re charging more during dates they expect to sell out, and they’re revisiting every month to make sure they are raising redemption prices whenever that’s happening.
It’s natural to think this process should eliminate the need to cordon off hotels from redemption during peak periods.
- One Mile at a Time: “Isn’t the whole point of peak pricing to allow awards to be released in periods of extremely high demand?”
- Doctor of Credit: “Keep in mind Marriott already uses peak and off peak pricing that is supposed to solve these high demand periods.”
However peak pricing does nothing to benefit the hotels. Hotels receive their average daily room rate as compensation for award nights when they’re close to fully booked. That was true before and with the introduction of peak pricing.
The whole point of peak pricing is to compensate Marriott Bonvoy itself more, with more of your points, when you redeem for nights that the program expects the hotel to be full and they have to pay the hotel its override reimbursement rate.
Hotels don’t get more of a payout from peak pricing. However on peak demand dates hotels can sell rooms for higher than their average daily room rate for the year. They do not want their average rate. Instead they want to block award redemption, since ADR is the most they can get from a redemption stay, while they can increase the room rate charged to paying guests.
Owners of Starwood brands were angry that they didn’t get ‘as good a deal’ as legacy Marriott brand owners [of course sometimes the owners of the different brands are the same] even though it’s the same deal they had under Starwood (although on non-sell out nights Marriott compensates hotels less than Starwood did).
It certainly seems fair that if Marriott is going to introduce ‘peak pricing’ that it should darned well solve the problem of peak demand dates. That was never the intention of peak pricing, though.
This Change Is Definitely Not a ‘Net Gain’ For Members
Nick Ewen covers these changes at The Points Guy. He argues that letting former Starwood brands – like Westin, Sheraton, W, and St. Regis – limit award redemption on certain high demand nights of the year “is not necessarily a net loss — and could wind up being a net gain.”
Here’s his argument (repeating what Marriott told me as well): there will be fewer high demand nights in 2020 across all Marriott hotels than there were in 2019.
As part of this update, the program has reduced the number of days that legacy Marriott properties can restrict for award stays. Since these locations represent the vast majority of the combined program, “this will result in fewer days in total subject to inventory controls portfolio-wide in 2020 compared to 2019,” according to a Marriott spokesperson.
However Nick misunderstands what’s happening at Marriott. They were already limiting the number of high demand dates that Marriott brands could impose to limit award redemption. That is decidedly not “part of this update.” It’s been in the program rules for over a year, and was part of the road map when the new combined program was launched.
The only change that Marriott is now making is to increase allowable high demand dates (up from zero) at legacy Starwood brand hotels. We were already getting the full reduction in high demand dates. We’re just getting less of a reduction as a result of this change. It’s like moving from 1000 to 200 on the way to zero — and then up to 500.
This is a new decision that’s being demanded by hotels, and has nothing to do with consumer benefit. But Nick argues that’s justified as well,
[W]hy should an Autograph Collection be allowed to mark a certain number of days as “high demand” and thus off-limits to awards, while a Luxury Collection property in the same region have no ability to do so whatsoever?
Marriott was phasing out high demand award restrictions entirely.
- Legacy Marriott brands used to get up to nearly 20% of the year cordoned off if they wanted it.
- That was going down to about 3%.
- Since high demand dates were going away entirely, as promised with the launch of the new program by Marriott Senior Vice President of Global Loyalty David Flueck, there was no reason to introduce high demand dates at Starwood properties that never had them.
While Marriott says they still have a goal “to eliminate inventory controls in the future” this is a clear step backwards.
Could you investigate the matter of blocking global entry to sanctuary city residents? I need to renew my global entry this year and I live in New York city. Am I in trouble?
I’m shocked to read that a TPG writer is simply parroting the information provided by Marriott.
I wish Gary or Ben at OMAT would just flat out call The Points Guy “fake news.”
@FNT Delta Diamond – there’s actually a lot of quality content at TPG, I enjoy:
Benet Wilson
Clint Henderson
Summer Hull
Richard Kerr
Ben Mutzabaugh
Ned Russell
Scott Mayerowitz
Ed Pizzarello
to name a few of the writers and contributors there.
When I like something I may link to it, when I disagree with something I say so, and here I shared my disagreement because I think it’s an important point about not letting Marriott get away with devaluing the program and calling it an enhancement.
In fact, I’ve enjoyed many posts by JT Genter but also taken issue with some of what he’s written about American, I like Zach Honig – he does good reporting on United but I’ve also criticized him when I’ve felt he’s gone easy on them, I’ve enjoyed Samantha Rosen trip reports. I actually just met Melanie Lieberman for the first time last week and think she’s great.
Gary, thank you for your posting on the Marriott points redemption yet another move by the hotel owners to increase their profits while diluting our point value, not surprising. It’s all about room count over quality and consistency, long forgotten by Sorenson and company. Willard must be truing in his grave. It seems most of the owners and flags have forgotten about their loyal customers whom their lured by posing out points, special floors, lounges etc. Hell breakfast is the cheapest meal of the day and now they cut backs there are almost universal. One thing is appears that Points and Cash are becoming the norm, something I find myself using more and more.
Thanks again Gary for your postings
That having been said, the position taken in the TPG post I linked to baffles me because I know for certain the writer was aware of my earlier post on the subject where I explained why the claim that Marriott was making things better for members was untenable. Even if he *disagreed’ with the argument, which seems obviously correct, he didn’t confront it and presented Marriott’s position without rebuttal.
Maybe TPG wants to get invited back to the Oscars… this isn’t the first time that TPG parroted the BONVOY party line in an instance where we were bonvoyed… honestly lucky came close to it in the past, but we really need to ask about TPGs consistent refusal to post “the real stories” about Bonvoy devaluations… I’d love to hear what you think about this Gary, given the history.
@Gary – which is clearly why many readers have stuck with you and Ben, while shying away from TPG… For whatever reason, TPG is as a whole VERY positive on Marriott. Their Bonvoy “coverage” has – with very few exceptions – been simply parroting whatever Marriott’s press releases say.
Anyways. I’m sick of being Bonvoyed.
@Gary, I’m not arguing that The Points Guy doesn’t have some writers who generate nice content. But nice content isn’t necessarily news. What I am arguing, however, is there is evidence of payola at The Points Guy when it comes to that site’s “content” vis-a-vis Marriott. The fact that writers are, at best, ill-informed enough to publish incorrect analysis or, at worst, copy-and-paste Marriott talking points without attribution to Marriott is deeply concerning. The Points Guy is advertising, not news.
Gary, if you’re going to criticize my analysis, please include all of it. You notably left off this:
“There are two big outstanding questions here: 1) Whether properties actually took advantage of the higher limits for inventory restrictions in previous years, and 2) whether all of the legacy SPG properties will take advantage of the newly-introduced restrictions.”
And this:
“However, the impact to travelers is unclear, until we get a feel for exactly how often properties have used (and will use) these controls.”
I am not (in any way) suggesting that these are completely without a doubt positive changes. I presented what Marriott has communicated to us and then highlighted that, until we have more data, the PRACTICAL impact to members is not known.
Finally, your 1000 to 200 to 500 analogy is inaccurate, because there never was an actual 200 implemented. Marriott may have planned to move from 1000 to 200 on the way to zero at some point in the future, but they’ve now decided to only move to 500 at this time. That’s still a reduction — though again, without full data related to this policy adjustment, it’s impossible to determine the practical implications of it.
@Nick, I didn’t recreate the entire post but I feel like the relevant argument was re-created. I don’t think I’m being unfair. You said these may work out positive for members, and I did not write that you claimed this was ‘without a doubt’ positive.
My point isn’t to call you out, but to explain where your analysis was incomplete and could mislead readers to have a misplaced sympathy for this Marriott devaluation.
You hypothesized a couple of things that would need to be true for Marriott’s claim to work out but did not explain that Marriott had already informed legacy Marriott-branded hotels over a year ago that they’d no longer receive ‘bonus’ high demand dates for limiting award available, that part is not a new change and is not bundled with the addition of allowing legacy Starwood-branded hotels to have high demand dates at all. That’s a weasel explanation from Marriott, and Marriott should be called out on it.
Indeed, you suggested that members could come out ahead with this change, but the only new change is the addition of high demand dates for new brands.
By the way I *love* this sort of engagement and don’t take it personally. When folks engage my arguments I find it to be a sign of respect. Maybe that’s because I got started blogging back in 2002 when things were far more collegial amongst blogs, but I love to flesh out and test ideas. So if you think I’m wrong in my analysis by all means bring it to me!
And @Nick “Finally, your 1000 to 200 to 500 analogy is inaccurate, because there never was an actual 200 implemented. Marriott may have planned to move from 1000 to 200 on the way to zero at some point in the future, but they’ve now decided to only move to 500 at this time.”
That’s incorrect. Legacy Marriott brands have had 2020 inventory loaded for a year under the maximum high demand date rule. It has applied to 2020 since long ago in 2019.
This was a rule that was published to hotels in the Bonvoy guide. And it is being implemented for legacy Marriott brands exactly as described with no change whatsoever.
Gary, thank you so much for this. I was having a long conversation yesterday with a co-worker and Marriott apologist who made similar arguments to those cited in the TPG article. I am with you 100% and (as usual), you were able to explain it in a much more concise and easy to follow manner than I was. I have passed this along to my co-worker with the tag – “what Gary said!”
Wait, wait, don’t tell me. There is misinformation on travelblogs? I am shocked, shocked I tell you. 😉
This was a very simple change by Marriott. Other travelbloggers made it hopelessly convoluted. Gary, thanks for making it (a little) less convoluted.
Really, this is variable pricing with 4 levels. Off peak, when the hotel is so cheap it would be a waste to use points; standard, ruined by Marriott’s devaluations; peak, which is even worse than standard; and 10 nights unavailable at any price.
Believe it or not I do not have a problem with the franchisees blocking 10 nights / year. They are getting screwed by Marriott on redemption reimbursements and have been screaming their bloody heads off about it.
I didn’t leave Bonvoy because of this. I left Marriott, even with Titanium status, because of the huge general devaluation of the reward chart.
Don’t worry. It’s just noise around the edges.