I’m sure you’ve seen the news already all over the place: Marriott Bonvoy dynamic pricing is coming. Without even looking into the details, I knew this would be bad news. Looking into the details just confirmed this. Marriott is a program from which you can still get some value, although award prices have gone up across the board, devaluing their points. Not to mention the breakfast benefits are indecipherable. This “fundamental shift” is code for “major devaluation” of the program.
Marriott Bonvoy Dynamic Pricing
Here are the quick details on the coming Marriott Bonvoy dynamic pricing:
- Marriott will transition to dynamic pricing starting March 2022
- Through the end of 2022, award prices at 97% of properties will vary between the off-peak and peak levels
- Starting in 2023, Marriott takes the guardrails off and prices can be whatever they want. Doesn’t sound like there are any guarantees.
- Marriott is keeping the 5th night free. Not sure how this will work, but the savings will likely be obfuscated by their new dynamic pricing model.
As always, Marriott is couching this is the best terms possible. But there is no doubt in my mind that this will be a net negative. Sure, there may be greater award inventory. But you could be paying a lot more, especially during peak times. This change hits families who travel during the summer and over school breaks to popular destinations the hardest. This is when points would have been the best choice, and now the award costs will more closely match the cash price.
My biggest question is: what approximate (or exact) cash value will Marriott points have? Will it be close to 1.0 cent per point? Or will it be closer to IHG or Hilton with 0.5 to 0.7 cents per point. If the latter, we will now essentially have a Hilton model with poorer credit card earning rates and elite benefits.
Dynamic Pricing is Now the Norm
The reality is that it is the norm for the majority of chain hotels. We have three major loyalty programs that are essentially completely dynamic at this point:
- Hilton Honors
- IHG Rewards Club
- Marriott Bonvoy
These three programs make up the majority of chain hotels around the world. As of summer 2020, there are 19,539 properties among these three chains combined. This is 40% of the total number of properties available through the top 15 hotel chains. If you also include Choice Hotels, which operates a pseudo-dynamic model where properties can change tiers depending on the dates, we’re looking at 55% of total hotels.
The bottom line: dynamic pricing dominates the market.
I’m still primarily a Hyatt loyalist, and while World of Hyatt has not moved to dynamic pricing, they have introduced peak and off-peak pricing. This was the first step Marriott took on the road to dynamic award pricing, so I would not be surprised to see Hyatt move this direction in 2-3 years. Or they could be the “Alaska Airlines” of hotel programs and keep things how they’ve always been, my comparison being Alaska’s commitment to awarding miles based on actual miles flown.
As I’ve remarked to friends, the day that hotel loyalty programs go full revenue-based is the day I’m out. The majority of my stays are award stays, even those that help my qualify for status. If I have to spend a certain amount of money, that will change the metrics entirely.
What do you think of the coming Marriott Bonvoy dynamic pricing? Will this change your hotel loyalty?
H/T: One Mile at a Time