A VAT tribunal ruling lifts the lid on Marriott Rewards
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If you are interested in the internal workings of hotel loyalty programmes, you might find this VAT tribunal ruling of interest.
Recently published, it is the result of a (failed) appeal by Whitbread against the VAT treatment of Marriott Rewards redemption nights. Whitbread was a major operator of Marriott Hotels in the UK until it sold its interests a few years ago.
The case appears – because it is difficult to follow – to revolve around whether a redemption night incurs VAT. The room is paid for by Marriott Rewards, a US-based company and so not liable for VAT. The guest, of course, was in the UK at the time but the guest did not pay the bill.
Not only that but the guest does not even know in most cases that Marriott Rewards is paying the hotel – and certainly doesn’t know how much. Whitbread appears to claim that the Marriott Rewards payment was a marketing payment to them for providing a service to the guest and not a payment for accommodation itself. I think.
I won’t go into the details of the case as it gets very complex. Here is some interesting information from the ruling though about how the programme worked at the time:
….. the hotel was obliged to make a payment, typically between 2% and 4.5% of the “qualifying spend” (calculated in US Dollars) by the Member at that hotel. The precise percentage applied depended on the brand of hotel. The “qualifying spend” included the room rate together with amounts spent on extras such as restaurant and bar bills and an estimate of local taxes payable in respect of the stay.
In order to give hotels an incentive to sign new Members up to the Program a lower fixed rate percentage would be applied where a Member signed up to the Program at the time of the stay (referred to as an “enrolment stay”).
A special fixed charge of $6.50 per 1000 points applied where hotels agreed to make discretionary awards of points (for example as compensation or goodwill gestures).
…. the number of points that a Member would receive depended on a number of factors including whether the Member had “elite level” status. However, whatever the status of the Member, qualifying hotels acting as Sponsor made payments on the basis set out at (1) to (3) above.
There was not necessarily any straightforward arithmetic link between the number of points that a Member received in respect of a particular stay and the amount of Sponsor payment that the hotel in question was obliged to make.
Lots, lots more on the inner workings of Marriott Rewards are in the ruling.
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How to earn Marriott Bonvoy points and status from UK credit cards (June 2025)
There are various ways of earning Marriott Bonvoy points from UK credit cards. Many cards also have generous sign-up bonuses.
The official Marriott Bonvoy American Express Card comes with 20,000 points for signing up, 2 points for every £1 you spend and 15 elite night credits per year.
SPECIAL OFFER: Until 15th July 2025, the sign-up bonus on the Marriott Bonvoy American Express Card is TRIPLED to 60,000 Marriott Bonvoy points. This would convert into 25,000 Avios or into 40 other airline schemes. It would also get you at least £300 of Marriott hotel stays based on our 0.5p per point low-end valuation. Other T&C apply and remain unchanged. Click here for our full card review and click here to apply.
You can apply here.
Marriott Bonvoy American Express Card
60,000 points (to 15th July) and 15 elite night credits each year Read our full review
You can also earn Marriott Bonvoy points by converting American Express Membership Rewards points at the rate of 2:3.
Do you know that holders of The Platinum Card from American Express receive FREE Marriott Bonvoy Gold status for as long as they hold the card? It also comes with Hilton Honors Gold, Radisson Rewards Premium and MeliaRewards Gold status.
We reviewed The Platinum Card from American Express in detail here and you can apply here.
The Platinum Card from American Express
50,000 bonus points and great travel benefits – for a large fee Read our full review
You can also earn Marriott Bonvoy points indirectly:
- American Express Preferred Rewards Gold Credit Card (20,000 bonus Amex points)
- The American Express Rewards Credit Card (10,000 bonus Amex points)
and for small business owners:
- The American Express Business Gold Card (20,000 bonus Amex points)
- The American Express Business Platinum Card (50,000 bonus Amex points)
The conversion rate from American Express to Marriott Bonvoy points is 2:3.
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