While we’ve been busy telling the story of our recent trip to Italy, a lot has been happening in the world of Points & Miles. Perhaps the biggest news dropped this week. . .Marriott announced some impactful changes to their Bonvoy loyalty program. First, the good news:
- 2021 elite status will be extended through February 2023. Many Bonvoy members haven’t traveled much during the last couple of years, and they’ll keep the status earned in 2019 or 2020.
- All free night certificates set to expire between 1/3/22 and 6/29/22 (we have three) will be extended to 6/30/22. This extension will make it easier for Bonvoy members to take advantage of free night stays.
- Bonvoy is introducing a new, unique, and very positive concept: its members can add up to 15K of their own points to those free night certificates to increase their value. This is big! A 35k certificate (most common) can be upgraded or “topped off” to book a free night at the 50k level, a big enhancement. This change will be implemented in “early 2022”.
Now, the bad news, and this has the potential to severely devalue the entire program once again. Starting in March 2022, Marriott will no longer have an award chart that details the category and point values for each of its hotels. Instead, they will introduce “dynamic award pricing”, which means that the number of points charged will fluctuate with each hotel’s rack rate. This eliminates the opportunity to book an expensive room for a point value that is less than the market price for that room. In practice, we think Marriott will settle on a value for its Bonvoy points. . .say a half cent per point. . .and make a simple conversion of the rack rate based on that value. Using that half cent value, a $300 rack rate would translate to 60k points, a $500 room would be 100k points, and so on. Unlike Hilton, which made a similar change a couple of years ago, Marriott has not committed to a cap to the number of points they would charge for a night at their top end hotels.
Photo courtesy of fysheroes.wordpress.com
Here’s our take on these changes: It’s yet another net devaluation of what used to be one of the best hotel loyalty programs. Before the Marriott-SPG merger and the implementation of the Bonvoy program, Marriott Rewards points were worth about 1.4 cents each. Currently, the guys at Frequent Miler value them at a shade over six-tenths of a cent. Once Marriott settles on a “conversion rate” going forward, we’ll know exactly what the value will be, and we think it’s very likely to be a half cent or less.
We looked at several hotels in several cities on the Marriott website and found NO instances where a half point conversion rate resulted in a point value that was less than today’s award chart-based pricing. None. Zero. Even at the lower end of the market, today’s point value is more than a half cent per point. One of the more egregious examples is right here in Cleveland tonight, where the Rock Hall induction ceremonies are happening. Using a half cent per point as a conversion rate, every available hotel within twenty miles would have a point value at least double, and sometimes more than triple, the current rate. Even if some sweet spots emerge for some lower end, non-peak season hotels, that’s not why we collect these points. Most of us use them to stay at high-end hotels…where we would not stay if we were paying the big bucks.
This isn’t surprising; In a June interview, Marriott CEO Anthony Capuano stated that he is happy that the Bonvoy program is more “owner friendly” and less “guest friendly.” That told us a lot, and The Exceptional Traveler has moved further away from Marriott and closer to Hyatt and other better-value hotel opportunities. Mr. Capuano’s perspective and the changes Marriott has made have basically destroyed 25 years of extreme loyalty from us.
So, what to do with that hard-earned stash of Bonvoy points? Book 2022 reservations NOW, before March, to take advantage of today’s point values. Use the 15k “top-off” feature as soon as it’s implemented to boost the value of free night certificates. Once the award charts go away, consider transferring Bonvoy points to one of Marriott’s several airline partners. Even at a meager 2.4:1 exchange rate, the value of converting Bonvoy points to airline miles may exceed that of using them at a Marriott-branded hotel.
Most importantly, keep any Marriott co-branded cards for their free nights, but only use them at Marriott hotels or when taking advantage of special offers. Instead, use Amex, Chase, Citi or Capital One cards and build up point balances that can be transferred to multiple travel partners. That’s where the value is in today’s Points & Miles game.
What do you think is the best alternative for hotel points if you do prefer nicer properties? Im Bonvoy Ambassador for the first time, I hate not taking advantage of that, But I know theres better value. I really Enjoy the Ritz and the other high end properties. I wonder if using Chase UR to purchase at Cash value through reserve portal is a better option long term
By all means, use that Ambassador status as much as possible this year. . .you earned it! Let’s see where point values go when the change comes in March.
I do think the best alternative right now is to ring up as many Chase UR points as possible. We’re using them to transfer to Hyatt, where you can still get 1.5 to 2 cents per point. But you can also transfer to Marriott if you find good value there, or “pay with points” at 1.25 cpp (Preferred) or 1.5cpp (Reserve). Our thinking has changed dramatically over the past year toward cards that have their own transferrable points currencies.