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Marriott is clearly quite aware that their loyal guests are keen for details about the missing piece of the puzzle – how they are going to allocate their hotels into award categories in the new loyalty programme. Joe wrote last night about the five destinations that were released as examples of the new Marriott award chart.
I share Joe’s first impression that the changes appear to be rather benign. The most obvious observation is that Marriott is spacing hotels based on brand and quality, when they could easily have placed every New York hotel into Category 7 for example.
But here’s the thing… It is often hard to justify spending points on high-end hotels. Here’s why.
What is a Marriott Point Worth?
I suspect that a sizable number of InsideFlyer readers buy Starpoints during the 35%-off promotions. I certainly do. Joe does as well. Here’s a link to the latest version.
When we all buy Starpoints, we end up paying 2.28 US cents per Starpoint. In sterling terms, that’s 1.65p or so. It doesn’t matter whether you also earn Starpoints from a credit card or hotel stays, if you’ve bought points at that price, I sincerely hope that you don’t receive less than 1.65p when spending them.
So, dividing by three to work in the new point system, a Marriott point is going to be worth 0.55p.
Hotel Stays Versus Airline Miles
We find it easy to justify that valuation, because of the backstop of converting to airline miles. Despite my concerns, this isn’t going to change. 60,000 Marriott points will continue to get you 25,000 miles. In numerical terms, you are taking 60K x 0.55p = £330 and getting 25,000 miles. 1.32p per mile. Not good for Avios, except during a conversion bonus period. Potentially quite worthwhile for Alaska Mileage Plan or some other higher-value airline mile…
With that in mind, every point I spend on a hotel stay is a point I can’t convert into a mile.
But more importantly, you can take any hotel in Category 7 or 8. Any super-luxurious SPG hotels are going to cost less than before, but at 60K per night, it is still going to cost you £330 per night! Yes, you can have the fifth night free on longer stays, but:
- My budget doesn’t stretch to £330 per night hotels on a regular basis, does yours?
- The cash price is often going to be less than £330 per night, so spending points would contradict my preference of not spending points at a lower valuation than what I paid for them!
So What Do I Actually Spend My SPG/Marriott Points On?
… low category hotels. For example, the old Categories 1 and 2 in Starwood Preferred Guest (2K-4K Starpoints per night). And this is where Marriott’s teaser concerns me. There are only two SPG low category hotels shown. And both will cost substantially more points…
17,500 points is £96 per night. Let’s be charitable and assume that you flew all the way to Bali for a 5 or 10 night stay, so the fifth night free brings that cost down to £77.
But these are not nice beachfront hotels, nor are they expensive during August, which is a lovely time to visit Bali and coincides with European summer holidays and Australian winter getaways…
So I wouldn’t spend points in Bali. I’d pay cash. And that’s before doing a Best Rate Guarantee claim! 🙂
New Marriott Award Chart Conclusion
If other low category SPG hotels see similar jumps in their award pricing, then Marriott will be taking away one of the main sweetspots in the SPG programme. Savvy travel hackers will be left with Travel Packages – where miles are the main attraction with the hotel stay just a bonus – and direct airline mile conversions. Which is fine, but I had been hoping for more opportunities to spend my points on actual hotel stays without feeling like I was spending a fortune.
What do you think about the new Marriott award chart? Do you look at spending Starpoints the same way I do?
I think you are right.
But if it’s free points or a mixed earned and bought points combination, then using SPG to Marriott for JW or Ritz in expensive cities esp in EU and USA (NYC Manhattan) can work well over paying £200 to £250 gbp for a room in a good Manhattan hotel where a mixture of two may get you the Ritz for 100 a night of 200 a night with 5th night and even more valuable if you are staying for a week with the miles and hotel package.
A lot depends on whether you earn hotel points by spending “other people’s money”. I’d be comfortable using those at a lower value because they didn’t cost you anything. And if you already have millions of airline miles maybe the opportunity cost of foregoing miles doesn’t matter.
I agree that there’s no question that you can save some money at peak times in peak locations. But rather than going to New York at a peak time, I’d probably just go somewhere else or at a different time of year. (or use another chain’s points with different economics)
yes. makes sense. unless you have to travel at peak time, best to avoid those months.
I think Marriott is hoping we will all buy their ‘Moments’ events instead of booking award rooms with the points. It’s a nice marketing angle for them.
We won’t be buying points again as this devaluation just highlights what a waste of money buying points for cheaper end rooms is now going to be. We only pay around £100 a night anyway as there’s plenty of other hotels happy to take our money.
I think “Moments” is pure genius. It’s obviously not targeted at us, but instead at those road warriors who maybe own a holiday home and couldn’t possibly imagine spending their vacation in yet another hotel. But Moments lets them spend those points on “priceless” experiences, at what must be a lucrative profit margin.
Good points – I completely agree about wincing over redeeming Starpoints for hotel stays. Cat 5 (12k-16k, 36k-48k Marriott) per night is about my limit and even then it hurts…
The thing is though, in the Bali examples you wouldn’t redeem Starpoints under the current award chart anyway – so the fact that they’re going to require more Points in future is immaterial.
With all hotel programmes (unless you have huge miles balances), the aim is to redeem for sweet spots or not at all. If I don’t want to pay 20k Starpoints for something, I’ll see what my IHG/Club Carlson/Hilton/etc options are and if they’re no good, I’ll pay cash – to maximise a promotion with the chains, or to book a boutique hotel through rocketmiles, etc.
If you have a variety of different points balances at your disposal and are generally content to stay at more or less anything 3 star or above that’s well located and well rated, it’s extremely rare not to have other good options. With Airbnb etc these days, the situation is even better.
Re top redemptions, I certainly don’t want to pay £330 per night regularly, but for a special occasion I can see the argument – and if the normal cash rate at those sort of places is £500-£1000+, it at least makes it a possibility rather than completely ridiculous.
I think one thing that will be interesting to see is how things fall on the Category 5 (35k) and Category 6 (50k) boundary. There’s a very big difference there.
I don’t actually redeem Starpoints for hotels often, as I value them so highly for Miles transfers. Even with the low categories the cash price is often more attractive, or there are other low category options with other chains (or other good cash alternatives). There are exceptions of course, like the Aloft Liverpool on a Saturday night!
That’s why I would have expected that a cheap, lousy hotel in Bali would go into the new Marriott category 1 or 2. SPG 2 = new Marriott 3 is not good news.
Let’s see what happens when the Travel Package revamp is announced. Where they draw the line on the entry level package will be crucial.
Completely agree with your analysis. The problem with Marriott’s program for budget conscious travelers has always been their low category valuations. So many hotels currently are 20 or 25K marriott points a night that you would never, ever, pay more than 90 quid a night for unless your travel plans fall pieces in the middle of a peak weekend for that location. They want people using the points at the top end of the program, and sell the low end rooms for cash. Which in fairness is the theoretical point a loyalty program..
Aye, I see that as a good thing rather than a bad thing – although as I’ve mentioned before, I actually much prefer transferring my SPG/Marriott Points to airlines than redeeming them for hotels. The thing is, that’s only because the airline transfer option is such a bargain (if you know how to redeem airline miles efficiently). If the airline transfer option wasn’t there, being able to redeem Points at seriously luxury places at a ‘reasonable’ rate, as an occasional treat, would still be good.
Also, re low categories – there are some massively overlooked bargains on the current Marriott chart. Pretty much all the Protea Hotels in South Africa (and other countries too) are exceptional value using Points.
Yeah, now that Protea will offer brekkie, I’ll have to look at another trip to South Africa. (as long as the water doesn’t run out) InsideFlyer off-site to Stellenbosch to knock back the Pinotage? 🙂
Sounds good to me!!
A Marriott Cat 1 and a Cat 2 nearby!