Burn Bonvoy Burn: Marriott moves to dynamic pricing and eliminates award charts

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Today was supposed to be the day that American Airlines gutted its loyalty program for a second time (it didn’t – more on that here) so while most of us were focusing heavily on AAdvantage and waiting for the hammer to fall, Marriott sneaked up on the outside and caught a lot of people by surprise when it dropped the biggest bomb of the day in announcing a massive change to the Bonvoy program.

Key Bonvoy changes announced today

• Marriott Bonvoy award charts will be eliminated from March 2022
• Dynamic award pricing will be introduced in place of award charts
• Seasonal pricing is being eliminated
• Most major award price changes will take place in 2023
• Approximately 3% of Marriott properties will see significant changes to the cost of awards in 2022
• Bonvoy members will be able to top up free night certificates with up to 15,000 points

At the time of writing, Marriott doesn’t appear to have sent any emails out informing members of these changes but these are changes that are definitely on the way.

Bye-bye Bonvoy charts

The current Bonvoy award chart will remain in place until March 2022 after which time it will be replaced by dynamic pricing which will see the cost of awards linked heavily to the cash cost of a room.

Importantly, nothing in what Marriott has been telling us suggests that there is a cap on how many points an award night can cost. The market may end up putting a cap on the cost of an award night but technically, there doesn’t appear to be a mechanism being put in place to limit what a property can charge for awards.

Marriott executives have been attempting to give this news some positive spin by suggesting that by giving hotels the right to price awards dynamically, more rooms will be made available for redemptions, but while this may end up being true, it’s not really going to be a positive move for Bonvoy members if the properties end up charging 200,000 points/night for those rooms.

Marriott has said that Bonvoy members will only see significant changes to how awards are priced at 3% of its properties in 2022 (presumably these will be the properties that are recovering quickest from the pandemic) with most changes coming in 2023, but I don’t understand how this will work.

Unless Marriott actually instructs 97% of its properties not to do whatever they want to do with award pricing once March 2022 rolls around, what’s to stop any Bonvoy property from charging a lot more than it’s charging right now on days when cash rates are high?

Does anyone really believe that a property like the Westin New York Grand Central will continue to offer awards at 60,000 points when room rates are over $700?

How about the Fairfield Inn Indianapolis South? Is a property like this really going to continue pricing rooms at 20,000 points when room rates are almost $400?

And who thinks that the Courtyard Atlanta Downtown will continue to charge 22,500 points for a stay when the room rate is $281?

None of these hotels is likely to be on the list of Marriott’s busiest properties right now but I have no doubt that we won’t be seeing award prices like this from March onwards.

Marriott may want to have us believe that we’ll only see noticeable changes in 3% of its properties during 2022, but unless there’s a mechanism that we haven’t been told about to keep award costs in check for the whole of next year, Bonvoy members should be prepared for noticeable price changes across the board.

Ultimately, this is very good news for hotel owners who will now be able to charge pretty much what they want for an award night and very bad news for those of us who are used to redeeming points for outsized value (booking rooms when cash rates are high).

Free night certificates can be boosted

To try and offset the pain of dynamic award pricing and to try to stop the value of its co-branded credit card offerings going through the floor, Marriott has said that Bonvoy members will be able to add up to 15,000 points to standard room bookings being made with free night certificates.

This won’t see Bonoy members allowed to boost their certificates to book a premium room, but it will mean that someone with a 35,000 certificate will be able to boost it to book a 50,000 point room and someone with a 50,000 certificate will be able to boost it to book a 65,000 point room.

On the face of things, this looks like good news and a nice enhancement, but the truth is that this probably won’t lead to Bonvoy members getting more value out of their certificates. Once the price inflation that the age of dynamic award pricing will usher in is accounted for, I suspect that certificate holders will probably need to use points as well as certificates to get pretty much the same value that they get out of the certificate alone right now.

This is something that will have to be watched closely as it could seriously affect the value that some Bonvoy credit cards offer.

The 5th-night free benefit remains

A key method to getting truly excellent value out of the Bonvoy program has long been to book 5 night stays with points as such bookings see Marriott giving guests the 5th night free. For the time being, this benefit will remain and that’s probably just as well because this could end up being the only way to get any real extra value out of Marriott Bonvoy points.

If hotels are going to peg award pricing to cash rates (which they are), we can expect it to become difficult to redeem Bonvoy Points at more than a standard rate (or a narrow range of rates) when booking stays of 4 nights or less. The 5th-night free benefit, however, should be able to unlock a little more value for Bonvoy members and booking stays of 5 nights in length will probably be the out and out best way to redeem Bonvoy points going forward.

When will all this happen?

All that Marriott appears to have said is that these changes are coming in March 2022 so we’re left to make what assumptions we can from that information alone.

• The cost for bookings for stays before March 2022 will not change
• Any bookings made before March 2022 for stays after 2022 will be priced up using the current award charts.
• Any bookings made in or after March 2022 will follow the new pricing model
• Changing a booking that was made before March 2022 after dynamic pricing has been introduced will probably see that booking repriced using the new model.

There may be further nuances to this that will be revealed when Marriott publishes full details of all the changes.

Bottom Line

Earn and burn has always been the best way to approach the miles and points game and that has never been more true than it is today. Marriott Bonvoy awards will be moving to dynamic pricing from March 2022 and the value of Bonvoy points will almost certainly drop when that happens.

We’re told that most hotels won’t be making any major changes before 2023 but I’m choosing to take that statement with a pinch of salt and will be looking to burn my points balance well in advance of March next year. Award bookings are flexible so if pricing doesn’t get crazy when March 2022 comes around, I can always cancel my bookings and use my points another way but by locking in rates before dynamic pricing comes into effect, I at least guarantee myself a decent return on the points that I hold right now.

What are your thoughts on what Marriott will be doing with the Bonvoy program?