Big changes coming to the Marriott Bonvoy program including dynamic pricing (award charts to be done away with)

We all woke up to big news this fine Tuesday morning and that news affects all members. Some of it is good but the major part of it isn’t so good. The news comes to us from Marriott International and their Bonvoy frequent guest program. This is one of the world’s most popular hotel loyalty programs that we have all loved to use and also get mad at for past changes. Today’s news will definitely continue that love hate relationship.

Marriott extending status, points expiration & more

First lets look at the good news – Marriott announced today they will be further extending elite status, point expiration and free night/suite night awards. As well providing an option to ‘top off’ free night awards for stays at a broader range of more expensive hotels.

Here’s what Marriott told us:

• Members’ 2021 status will be extended for another year through February 2023. Whether status was earned in 2020 or earned in 2019 and extended for this year, members’ 2021 status will be extended for an additional year.
• The current pause on points expiration will be extended through December 31, 2022.
• Suite Night Awards set to expire December 31, 2021, will be extended six months through June 30, 2022
•  Free Night Awards that will expire between January 3, 2022, and June 29, 2022, as part of the co-brand credit card benefit, annual choice benefit, or promotions will be able to redeem them through June 30, 2022. The system will automatically update accounts in December.
• Beginning in early 2022, members will be able to combine their Free Night Awards with up to 15,000 points from their accounts, so they’ll have the option to explore even more of our portfolio.

So this is good – your current status will remain intact until early in 2023 now unless of course you earn a higher status during the course of 2022. It’s really nice to see the points expiration being extended again for a whole year, this definitely takes some of the stress away of having to earn or burn points for those who don’t have a Marriott co-brand credit card. (Hyatt please take note and consider doing the same). Extension of awards – also really great to see as there are still so many members who aren’t ready to travel yet but may be set to do so next spring and early summer. Personally we have some Free Night Awards set to expire in January and April of 2022 so being able to have an extra few months to utilize them is great. The final addition of being able to top off those free night awards with 15,000 points means you’ll be able to use them for hotels that cost up to 50,000 points (for 35K certs), 65,000 points (for 50K certs) and 100,000 points (for 85K certs).

Marriott will move to dynamic award pricing

Now lets get on to the major news which for the most part is not great. Marriott will be eliminating their free night award charts and moving to dynamic award pricing. This is something we have already seen from IHG Rewards and Best Western Rewards just to name a couple of hotel programs but also something we have seen across the board with most airline programs.

Here are the details as provided by Marriott:

• We are announcing the transition to Flexible Point Redemption Rates in March 2022. Rates will more closely resemble hotel rates and give members more flexibility and options to explore our portfolio when redeeming points for stays.
• We will add more price points than the fixed off-peak, standard, peak rates for our members to give them more options when they are looking for the best redemption value.
• Flexible point redemption rates will mean that more rooms overall will be available for redemption stays because our hotels will be able to better manage room inventory.
• The award chart will go away in March; however, we expect redemption rates for nearly all hotels – more than 97% – will continue to range between their current off-peak and peak redemption rates for stays throughout 2022. That means less than 3% of hotels will have redemption rates in a higher range than where they are currently in the award chart. For stays beyond 2022, we will adjust rates based more closely on hotel rates.
• Between now and March, the current award chart with peak off, standard, and peak rates remains in place.

This is not what we wanted to hear today – “Rates will more closely resemble hotel rates” is the key phrase that signals this as a devaluation. The Marriott Bonvoy program is essentially going to lose that outsized value on some key redemptionts that their loyal members strive to get by spending money at their hotels and on their credit cards. Just as we see with dynamic pricing for flights if you want a room during high season (like spring break, Christmas etc.) it will cost a lot of cash or a lot of points. Yes, Marriott already had semi-dynamic pricing with Off Peak and Peak award rates but at least you knew there was a cap in the amount of points you’d spend and even with Peak pricing there were still valued to be had. This will no longer be the case. And what we don’t see any mention of is a ‘cap’ to number of points that a night may end up costing in points. Some other programs, while dynamic, have stated ‘dynamic up to this many points’ but no word from Marriott if such a cap will be placed in the Bonvoy program.

The good news in the bad news is that Marriott expects more than 97% of their redemption rates to remain within the points chart ranges for 2022. So that gives a bit of breathing space but who knows what will happen in 2023 and what the value will be then.

On the flipside, there are also good news scenarios with dynamic pricing and that is some free nights will end up costing less than would with the award chart. I see this being the case more so with the lower to mid-level tier hotels that aren’t right in the thick of things in your most popular tourist destinations. I do actually see this being advantageous for those smaller town hotels, you know the ones you stay at on a fun trip exploring near home or off the beaten path. It is typically those hotels that will become even more affordable with points.

Here is the current award chart that we have all become accustomed to:

Free nights cost from 5,000 to 100,000 points right now. We know the least amount of points we’ll spend and the most amounts of points for a standard room. Will we see rates lower than 5,000? Possibly but unlikely. Will we see rates going for more than 100,000 points per night at Category 8 hotels? Most definitely we will. It is those hotels that do have expensive nightly rates (your Category 6 and up) that will most likely be the ones that will be negatively affected. The views of the Eiffel Tower from your room, snorkeling off your private deck on your Maldives over water villa, yes, those will most likely cost more points than they do now. I also know those aspirational properties only make up a small percentage of the actual redemptions made by the millions of Marriott Bonvoy members so it is entirely possible the actual change to dynamic pricing won’t even by felt by many as their redemptions will still fall into points amounts akin to the award chart.

Wrapping it up

If you can, I would start booking some of the award nights between now and March especially if you have had your eyes set on some aspirational properties in places like Europe, French Polynesia, New York City and so on. You are better off locking in a rate you know right now and if the booking you make ends up coming in at a lower price with dynamic pricing you can always cancel and re-book. Marriott typically lets you book a year out so you can technically book award night stays with the award chart until March 2023 by booking in March of 2022. So you do have a little bit of time to set your travel plans and book nights with your points at the known amounts from the chart.