Marriott Bonvoy launches dynamic reward pricing on 29th March – some hotels hit 130,000 points

Marriott Bonvoy has confirmed that dynamic reward pricing – or ‘Flexible Point Redemptions’ as it calls it – will begin on 29th March.

From this date, the current off-peak, standard and peak redemption rates will be scrapped.

There is no change to how you can earn Marriott Bonvoy points.

The new pricing system will see redemption rates aligning more closely with cash rates and availability.

The ‘availability’ aspect is worth noting. Whilst I am simplifying hugely, when you redeem a Marriott Bonvoy reward night at present, the hotel receives:

• a nominal sum, around $25 to $150 depending on brand, if the hotel is under 95% full, or

• the standard cash rate if the hotel is 95%+ full

These rules mean that ‘dynamic pricing’ needs to reflect availability as well as cash rates, because:

• a $1,000 room at St Regis New York may only cost Bonvoy $150 if the hotel is below 95% full

• a $200 room at Courtyard Heathrow may cost Bonvoy $200 if the hotel is 95% full

In this scenario, it makes sense to make the points cost of a St Regis New York redemption attractive and the Courtyard Heathrow redemption less attractive, in a way which is not related to the room rate.

How will Flexible Point Redemptions work?

Like a boiling frog, Marriott is bringing in the changes slowly to soften you up.

For stays in 2022, virtually all hotels will remain within their current peak and off-peak limits. This means, for the most luxurious hotels, pricing will vary from 70,000 points (the current Category 8 off-peak price) to 100,000 points (the current peak price). For the cheapest hotels, the price will be between 5,000 points (the current Category 1 off-peak price) and 10,000 points (the current peak price).

200 hotels will see their maximum price increase. For some hotels (you can probably name most of them without opening the PDF), the maximum price cap will rise to 130,000 points per night. 40 hotels will have a cap higher than the current 100,000 points.

For stays in 2023, all bets are off. With IHG Rewards now charging over 100,000 points for Holiday Inn Express hotels on peak nights (it was only a few years ago that InterContinental hotels were capped at 30,000 points per night), who knows where Marriott Bonvoy will end up? Will we see St Regis New York, as an example of a $1,000+ per night hotel, break the 250,000 point barrier?

All we know is that:

“Changes in rates for stays in 2023 above or below the high low range for stays in 2022 are planned to be incremental.”

Is dynamic pricing wrecking the ‘promise’ of hotel loyalty schemes?

Pre covid, I went out to Washington to meet Chris Nassetta, Hilton’s CEO, and the Hilton Honors team.

Nassetta was obsessed by building up Hilton’s luxury portfolio, and we later saw the launch of the LXR brand and the rapid growth of Curio Collection. He wasn’t doing this because luxury hotels make the most money – his bread and butter is the Hampton brand – but because they encouraged loyalty via Hilton Honors. People were happy to throw a lot of nights at his mid-tier brands if it got them – and their family – the occasional luxury treat.

Hilton isn’t alone in this thinking. IHG bought Six Senses and Regent for the same reason.

None of this makes sense if dynamic pricing is in force. If you’re getting 0.5p per Marriott point wherever you redeem, there is no point building up your balance. You might as well cash out your points as quickly as you earn them. The problem for Marriott is that there is no incentive to keep coming back to their hotels if you are thinking like that.

(Hilton worked this out. Hilton Honors has the best of both worlds – dynamic pricing means that rewards are cheap when cash rates are cheap, but caps remain so you know that you will never pay more than a certain points price for a particular hotel.)

Luxury redemptions should be proportionately better value than mid-market redemptions, or there is no incentive to keep pushing stays towards a brand. The airlines have got this right, with Business Class flights costing 2-3 times the miles of an Economy flight, despite costing 5+ times as much for cash.

You can see the US credit card tail wagging the redemption dog here. Let’s assume St Regis New York goes to 200,000 Bonvoy points per night. This would require $20,000 of ex-VAT spend (converted to Sterling, £20,000 of spend including VAT) to get just one free night. Very few Bonvoy members will achieve this, and even those that do are unlikely to blow 200,000 of their hard earned points on a one night stay.

On the other hand, over in the US you can pick up 100,000 Bonvoy points as the sign-up bonus on a $95 credit card. You can see where the dilution is coming from.

Fixed value redemptions also risk sending people to online travel agencies, which incurs a hefty commission payment. If a Marriott Bonvoy point is worth 0.5p, then – ignoring the desire to earn status benefits and any special ‘member’ pricing – you’d get a better return booking via Hotels.com and getting 10% of your spend back in Hotels.com Rewards credit.

Conclusion

You should, with no exceptions, lock in any planned Marriott Bonvoy redemptions before 29th March.

Book each night separately unless you are taking advantage of ‘book five nights, get the cheapest free’. If you don’t, and you later need to chop a night off your stay, it will reprice.

There is no downside. If the hotel you have booked goes down in price after 29th March, you can just cancel your existing booking and rebook.

PS. There is an update on when you will be able to boost Marriott Bonvoy free night certificates.

‘Late April’ is now the date from which you will be able to top up a free night certificate (worth 25,000 or 40,000 points, depending on where you got it from) with up to 15,000 points from your Bonvoy account. This will allow you to book more attractive hotels.

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How to earn Marriott Bonvoy points and status from UK credit cards (April 2024)

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.

You can apply here.

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 American Express Platinum in detail here and you can apply here.

You can also earn Marriott Bonvoy points indirectly:

• American Express Gold (20,000 bonus Amex points)
• American Express Rewards Credit Card (10,000 bonus Amex points)

and for small business owners:

• American Express Business Gold (20,000 bonus Amex points)
• American Express Business Platinum (40,000 bonus Amex points)

The conversion rate from American Express to Marriott Bonvoy points is 2:3.

Click here to read our detailed summary of all UK credit cards which can be used to earn Marriott Bonvoy points. 

(Want to earn more hotel points?  Click here to see our complete list of promotions from the major hotel chains or use the ‘Hotel Offers’ link in the menu bar at the top of the page.)