Big changes ahead for Marriott as Bonvoy ditches its award chart; book your stays now

Category: Hotels

Big changes ahead for Marriott as Bonvoy ditches its award chart; book your stays now

By Andrew Kunesh Oct.21, 2021 TPG

The long-rumored news has finally rung true: Marriott Bonvoy will transition to dynamic award pricing.

You read that right. Starting in March 2022 (the exact date remains to be announced), the hotel group will remove its award charts with set redemption rates. When this happens, hotels will be able to change their award pricing night by night. The good news is that you have until March 2022 to lock in award nights at current prices, and most (but not all) hotels are expected to only price award nights within the off-peak and peak bands of their current category through 2022.

After that, however, it’s anyone’s guess how much prices will fluctuate as award charts will be no more.

On a more positive note, Marriott Bonvoy also announced a handful of extensions and improvements to its benefits. To start, the loyalty program will extend members’ 2021 elite status through next year, regardless of when it was originally earned. Additionally, points expiration will remain paused through next year and Suite Night Awards will receive a six-month extension. Free Night Awards will also be extended and become more flexible.

If you’re a Marriott loyalist, there’s a lot to unpack here. Here’s everything you need to know about Marriott’s most recent round of changes and how they might affect your Marriott Bonvoy strategy going forward.

Let’s dive into the bad news first: Marriott award pricing could likely become a lot more unpredictable.

Currently, the program prices award nights based on a standard award chart. Each hotel is assigned a category number where there are off-peak, standard and peak award prices. Because of this, you always have a general idea of how many points you’ll spend on an award night. For example, a Category 6 Marriott hotel costs 40,000 points on off-peak dates, 50,000 on standard dates and 60,000 on peak dates. There’s a range there, but a predictable one.

This will change in March 2022 when the program begins its move away from award charts and categories, and points pricing will more closely reflect paid hotel rates. For 2022, 97% of Marriott’s properties will still effectively be in one of the program’s eight categories with prices expected to fluctuate only within the current off-peak to peak ranges. However, each hotel will be able to set its own points prices every night within that range. For example, a Category 6 Marriott could cost 41,000 points one night and 57,000 points the next.

This is similar to how Hilton Honors prices award nights currently.

But eventually, even those bands will go away and you won’t be guaranteed in advance how many points an award night will cost as it will vary as cash rates do.

On a call with TPG, Marriott’s senior vice president of global loyalty, David Flueck, characterized this change as a way to give Bonvoy members more options and flexibility. He said that changing award prices to resemble hotel rates more could incentivize franchised hotels that often block award space to open more rooms for award redemptions. That’s not a guarantee they will, though.

It also means we could very well see sky-high award rates during the holidays and peak times at popular tourist destinations. Some that come to mind include Florida, Hawaii and the Maldives, among others. This is something we already experience in airline loyalty programs that have gone to a dynamic pricing model, such as Delta.

If you travel mainly during peak times, this could significantly lower the value of your Marriott points and you’ll no longer have the reassurance of a set award chart to base your strategy around.

On the flip side, we may see some hotels lower award prices in times of low demand. Only time will tell exactly how this will shake out.

Summing up the move, Flueck told TPG, “Our intention is to make sure that our members have more flexibility and it’s more rational pricing. So in 2022, the [redemption] bounds won’t change and there won’t be any pricing shocks. Outside of that, we’re going to move in smaller increments than we have traditionally.”

Marriott’s transition to dynamic pricing starts in March

Thankfully, Marriott is giving Bonvoy members some time to prepare for these changes.

As discussed, award charts won’t be removed until March 2022. This means you have time to book your 2022 travel at current rates.

Likewise, as mentioned, Marriott told TPG that it expects more than 97% of hotels to stay in their current pricing bands for 2022. So, the vast majority of hotels will keep their pricing within current off-peak and peak pricing ranges for roughly the next 14 months and members shouldn’t see anything higher than the currently published peak pricing in 2022 at these properties.

Unfortunately, roughly 3% of hotels are expected to change pricing beyond those parameters beginning in March — and we suspect this will include many high-demand properties. Unfortunately, Marriott didn’t say how high these hotels can raise points rates or provide a list of those specific properties. While 3% doesn’t sound like a lot, with over 7,000 properties in its portfolio, that comes out to over 210 Marriott properties that will be totally free of award charts come March.

After 2022, it’s anyone’s guess how pricing will change for all of Marriott’s properties. Some properties could skyrocket in price while others may go down. We’re hopeful that pricing won’t be as variable as, say, Delta SkyMiles, another variable-priced juggernaut with sometimes astronomical award prices. But again, only time will tell.

On the brighter side, Marriott did confirm to TPG that there will be no category shifts this year, so you have some time with current pricing before the award charts are removed.

The other Marriott news is around status, points and certificate extensions. Marriott first extended elite status earned in 2019 when the pandemic started ravaging the travel industry. Now, Marriott elite status will be extended further, through February 2023, regardless of when it was earned. So, there’s no need to panic if you haven’t requalified for status this year.

Further, Marriott will continue to pause point expiration until Dec. 31, 2022. Typically, Marriott Bonvoy points expire after 24 months of no account activity, but can be easily extended by earning or redeeming any number of Marriott points.

Two smaller extensions were announced, too. Marriott Suite Night Award certificates that were set to expire by Dec. 31, 2021, and Free Night Award certificates that were set to expire between Jan. 3 and June 29, 2022, will be extended through June 30, 2022. This includes all Free Night Award certificates, including awards from cobranded credit cards and elite status annual Choice Benefits.

All extensions will be automatically reflected in member accounts. Despite the ongoing travel recovery, it’s great to see Marriott continue to keep loyal customers covered while the travel industry continues to adapt to the pandemic effect on travel demand.

Free night certificates will be more flexible

One more piece of mostly good news: Marriott will make Free Night Awards more flexible.

Soon, members will be able to upgrade Free Night Awards with up to 15,000 points from their accounts. For example, under this new policy, the up to 35,000-point annual Free Night Award certificates from the Marriott Bonvoy Boundless Credit Card will be redeemable for award nights that cost up to 50,000 points so long as the member has enough points in their account to cover the difference.

Under the current chart, this change makes Free Night Award certificates a lot more flexible and usable. This is especially true in pricier cities where it’s hard to find a free night for 35,000 points or less. Likewise, it lets those with an up to 50,000-point certificate from the Marriott Bonvoy Brilliant™ American Express® Card use certificates for higher-end hotel stays.

On the flip side, this change will be even more important as Marriott moves to dynamic pricing where pricing can change daily. A 35,000-point certificate may not go very far for a spring break stay in Miami or New Orleans, but having the ability to add 15,000 points to the redemption may make the certificate at least

Marriott moving to dynamic pricing is huge news for anyone with a stash of Marriott Bonvoy points. Only time will tell how much this actually affects Marriott award pricing, but one thing is for sure: There’s room for pricing to get a lot more variable come March.

With that in mind, I recommend preemptively booking any upcoming award stays you can now, before the changes take place.

This allows you to lock in future award nights at the current award chart rates in case the price of your desired stay goes up. Further, Marriott award nights are flexible as you can usually cancel them and get your points back if you can’t make the trip, right up until a few days before your expected travel date. And in the case that an award stay goes down in price under dynamic pricing, you can always cancel and rebook your stay to pocket the points difference.

We’re not happy to see another program make the jump to dynamic pricing. But we are (slightly) relieved that Marriott is giving members lead time to book under the current award chart. Also, remember that Marriott expects the bulk of hotels to stay within current award pricing bands, so you shouldn’t see too much movement through the end of 2022 for the majority of the properties.

However, there are a handful of properties that will be able to move beyond their current peak pricing bound next year.

We’d guess that these will most likely be high-demand properties in places like the Maldives. If you foresee yourself booking one of these properties in the near future, it’s important to do so now, if possible, to avoid sticker shock in March. Consider using the hotel’s list of most redeemed properties as a road map for what properties could see higher prices next year, though for now that part of this is just a guessing game.

Bottom line

Marriott moving to dynamic award pricing is something many TPGers have long feared.

The industry as a whole has been moving in this direction with Hilton Honors and IHG Rewards switching to dynamic pricing over the past few years. Both of these programs now have relatively unpredictable award night pricing, and my fear is that Marriott Bonvoy will suffer the same fate.

But as discussed, we won’t know how much this actually affects award pricing until March when the transition begins. We’ll keep you updated on how these changes play out when dynamic pricing goes into effect next year — but for now, you still have several months to book awards under current rates with little risk.

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