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Update: Marriott introduced dynamic award pricing on March 29-30, 2022. This post has been updated to reflect this concrete timing.
Big news out of Marriott this morning! Over the next few months, Marriott is introducing dynamic award pricing. This change will mark the end of award charts and standardized pricing. Instead, award prices will mirror demand and cash prices at hotels. Here is what we know about this massive change.
What is Dynamic Award Pricing?
Before we get into the news, it helps to understand what dynamic award pricing is. This is the model that airlines like Delta and United use. Rather than a standard “flying from A to B costs X miles”, you pay based on the demand and cash price of the ticket.
Hilton was the first hotel chain to move to this model of pricing. You can read more about how Hilton Honors works here. The gist is that the same room can cost a different amount of points depending on the day of the week, whether the hotel is full or empty, the popularity of the hotel at that time of the year, and other factors.
Marriott's Move to Dynamic Award Pricing
Until now, Marriott has used a standardized award chart. Depending on the peak, standard, and off-peak times of year for that hotel, you knew in advance how many points you would need to stay at that hotel each night.
Timeline
When will this happen?
- The current award chart will remain in place until March 29, 2022.
- From March 30, 2022 until the end of 2022, 97% of Marriott properties will price between the current peak and off-peak prices.
- In that time, 3% of hotels may vary outside of these pricing bands.
- From 2023 onward, dynamic pricing will go into full effect.
Key Features
There are some important points to note. Some of these are good, while others look bad.
- Fifth night free remains in place for award bookings.
- There is no cap on how many points you could need to book an award stay in the new dynamic pricing model.
- Not all standard rooms will be bookable on points, as caps will remain in place. There is no announcement yet that more rooms (or even all rooms) will become eligible for award redemptions. Hotels can still set limits.
No Standardized Redemption Rate
As mentioned in point 2 in the last section, there's no cap on what rooms can cost in number of points. Additionally, this will not be a “1 point = x value” model, either. That would help us understand how many points we could expect to pay.
Instead, this new dynamic pricing model means award redemptions at Marriott properties will somewhat emulate cash prices. But not exactly. This may mirror what Hilton does, but only time will tell. In recent AwardWallet user redemptions, Marriott Bonvoy's points are worth 0.95¢. We'll have to keep an eye on this to see what average values are in the future.
Why is Marriott Doing This?
Most Marriott hotels (across its many brands) are not owned by the company but are franchises. When you redeem points, Marriott pays the hotel for your stay. How much the hotel gets depends on how full it is and the average cash price during your stay. The more full the hotel, the more money Marriott forks over for your award stay.
Thus, Marriott can move to a model where you either fork over more points to help offset your expensive stay (expensive from their accounting) or get discouraged from making these costly redemptions. Either view helps Marriott save money.
Who Does This Affect?
For those of us who love to find maximum value in our redemptions, this hurts. Finding a crazy deal for outsized value is likely going away. For the average traveler redeeming at less-“aspirational” properties, this change might be negligible. If points requirements go down at a SpringHill Suites property during a road trip, many of these types of travelers might enjoy the change. Only time will show us the specifics and help us understand what to expect in our award redemptions.
Bottom Line
The bottom line is that Marriott will introduce dynamic award pricing. 3% of hotels may price higher than current peak rates in 2022. From 2023, Marriott Bonvoy will move to full dynamic pricing. Perks like “fifth night free” will remain, but points requirements will more closely match cash prices. We haven't seen any announcement about the minimum or the maximum number of points you may need for a stay in this new model.
What do you think? Good, bad, or a combination?
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I would like to buy discounted points, how do I get this promotion?
Here are all of the details about buying Marriott points: https://awardwallet.com/blog/current-marriott-buy-points-promotion/
A bit confusing, but doesn’t seem to be in favor of the guests.
I don’t like the uncertainty and variability this introduces. I liked planning ahead of time, especially for road trips.
Additionally, though I know everything seems to be seeing price increases, I was appalled at the prices of our recent Marriott stays in places we’d stayed in a year ago at 30% less or lower. The price alone wasn’t what was appalling–the condition of the property and rooms was terrible!
Between that and this new change, I’m going to move away from using our credit cards to acquire Marriott points.
I see this happening to all hotel companies. I understand they want to keep costs low for them. Yes I agree this can make us frustrated about redeeming any points. It’s sad that this is changing but I understand it. People will still redeem even if frustrated. I think I am more frustrated with how they treat the elite benefits and people using points for a stay rather than how many I am redeeming.
Personally, I’m not too upset. This was inevitable and everyone knew, or should have known, this was coming eventually. Also, the ability to top off certificates with points to stay at 35K+ properties is nice.
Good to know… these award charts going at and using dymanmic pricing… is hosing all of us as users.
For me the dynamic pricing model isn’t a welcomed development. When staying at a place I usually look at all my options using all my hotel plans and Chase and try to get the best bang for the buck or in this case points. Guess we’ll have to see how this pans out.
Does this make transfer of Bonvoy points to airline partners relatively more valuable?
It all depends on how Marriott sets the value of Bonvoy points. Right now, AwardWallet users average 1cpp for redemptions. That’s thanks to AW users knowing how to maximize points – paying cash when the value is low and points when the value is high. If Marriott narrows the range of redemptions to 0.6-0.8cpp through dynamic pricing, then yes, airline partners will become a lot more appealing. However, if Marriott redemptions still average around 1cpp (unlikely), then I’m still going to be using Marriott points for hotel stays.
I wonder how much of this is already happening. I booked a hotel with a couple of weeks to go. Needed to remove one day. You end up needing to rebook but the price had increased! I removed a 20k night but actually only saved 10k points.
Interesting. I’m guessing that some of the nights switched from off-peak to standard – or from standard to peak – to cause that.
Bonvoy points finally completed the last step to becoming the “SkyPeso” of the hotel industry….don’t be surprised to find astronomical rates at aspirational resorts – esp. during peak travel times – similar to what Delta charges to sit in the front of the plane when flying internationally…..it’s just ridiculous 300K, 400K for biz and first on many Delta flights….Marriott just took all of the fun out of trying to save up for a truly aspirational trip….oh well, it was fun while it lasted and was bound to happen eventually – it just came faster than we hoped, sped along by financial impacts of the pandemic most likely
Sorry, forgot to ask – why the “top off” feature is not mentioned in the post anywhere?
Also, since you can add only up to 15K points, it is semi-useful, but better than it was before, where you were almost doomed to loose some value.
There was a lot of news, so we broke this up into multiple posts. We included the Top Off part in this second post: https://awardwallet.com/blog/marriott-bonvoy-extend-elite-status/
I’ve already lost interest in Marriott due to finding them more expensive than similar hotel and have long ago ceased being loyal to them. I’ve moved away from staying there at all really, and have a difficult time finding a decent place to use my annual certificate. Whatever they end up doing will likely not effect my annual certificate, but it is annoying how little value Marriott membership offers.
Ugh. Best way to use 240k Marriott points before the devaluation?
Frankly, Marriott has turned into a garbage company. I’ve had terrible experiences with them lately and the worst part is, they took over a beautiful program in SPG and have ruined it too. It is with 100% certainty that this will make their points even more worthless and those free 35k free night a joke.
How does this change affect the Marriott flight and Hotel packages? Will there still be a fixed point cost whereby you receive both Hotel nights and frequent flyer miles?
That’s a really good question. Marriott didn’t address Flight and Hotel packages in its announcement. But, with Marriott doing away with categories, it’s obviously going to change how this redemption option works. I see we will see!
What will be the effect of existing award stays that are booked for stays after March, 2022?
Will it be like the upcoming Hyatt change, where they will honor the existing award reservation, but automatically refund the points if the rate goes down?
I don’t think it will be automatically repriced with Marriott. I think you’ll need to check to see if the price goes down (and then keep checking for lower rates).
This dynamic pricing is really only going to benefit Marriott. Ultimately, the consequence of this appear to result in point devaluation for the customers.
Dynamic pricing is always a lousy proposition
Agreed.. it’s also just confusing and uninspired.
And I say goodbye to Bonvoy.
Not surprised at all. Another reason for me to dislike this company more than I already did.
Any word if this affects free night certificates? My hunch is that they will be harder to use, as properties will go over the 35K/50K thresholds more often. At the very least, it will be less predictable.
Quite possible. However, Marriott is also introducing an award “Top Off” option where you can add up to 15,000 Marriott points to a Free Night Award to be able to use it for higher-priced awards. So, you can pair 7k points with a 35k cert to book a 42k night.
While the change is awful for people who like to search for the outsizes value in aspirational property (like me) the “top off” feature actually makes the certificates usable (not just burnable), and basically turns them into the points with hard expiration date. That is very positive change, making the decision to keep the card which comes with an annual certificate a worthy proposition.
But all in all dynamic pricing with no set rules (on how much the room may cost) is killing the program for many people. Look at IHG, which basically turned into a “road trip accommodation” program for me. Outrageously cost prohibitive to book anything nice at a good property.
Sad…
This is terrible. When HH went to dynamic pricing, attractive locations pricing went through the roof.
Ant time a hotel chain wants to change things, it is most likely not great for the consumer. In this case, most likely, it will ensure Marriott makes more money.
Loyal members who have been with Marriott (and Sheraton) for years will most likely see a devaluation in the worth of their points. I guess we just have to get used to it.
Good for their business, usually not good for the consumer. Really have to work harder at finding the deals now.
Not good news. Say good bye to any award night redemption being a significant value compared to the cash price.
It’s just harder to plan for a trip when the amount of points can change everyday.
+1.. exactly.. no matter how much the category costs, flex price makes it very very hard to plan for it.