Valuing Marriott Rewards Points

Marriott Rewards has recently added (or codified in one instance) some new benefits to their program. One of the new benefits is the option to use a combination of cash and points for an award stay.

In case some of you are thinking “hang on a minute, didn’t Marriott have that option before?” the answer to that is no….at least not in the way that this new cash & points option works.

In the past Marriott allowed members to mix and match nights paid wholly with points with nights paid wholly with cash…but you couldn’t purchase a single night with a combination of both. Now you can.

Tomorrow I’ll take a look at the new cash & points offering but, for now, I’m going to explain how I value my Marriott Rewards points. Why? Because without having a value for your points you have absolutely no way of knowing if you’re getting a good, average or bad deal when you redeem your points for award stays.

Let me be upfront and say that this is going to be a very “dry” article. There’s nothing particularly exciting about valuing a hotel’s loyalty currency. But, if you really want to make the most of the miles & points game, this is something you absolutely have to understand. You’ve been warned! 🙂

Valuing Marriott Rewards Points

Different people will value their points in different ways – I’m just going to show you my thought process and methodology – so it’s up to you to decide/figure out what works best for you.

One method that I’ve seen people use to value their hotel points is to find the average price charged by one of the top/aspirational properties (that they’d like to stay at) and then divide that by the number of points needed for an award night at that hotel.

So what would that look like?

Let’s take a popular high-end Marriott hotel as an example – The JW Marriott Grosvenor House on London’s Park Lane.

Grosvenor House a JW Marriott Hotel – London

Taking a look at Marriott.com shows that the average price charged for a night at this property is in the region of $465 (£310/€415). And, as a Category 9 hotel, an award night costs between 40,000 and 45,000 points. (Here’s a link to Marriott Rewards’ points table)

I know this hotel reasonably well and I can’t remember the last time that I saw a night available for 40,000 points so, for the purposes of this calculation, I’m going to use 45,000 points as the cost of an award night.

Using the numbers above, the value of a Marriott Reward Point would come out to be around $0.01 (£0.0069/€0.009).

But I think that’s an overvaluation.

To my mind points are only worth what you’d be prepared to pay in the first place and I would not pay $465 for a night in a hotel….at least not for most Marriott hotels. I prefer to value a hotel point at what I’d be prepared to pay at a given hotel brand.

I don’t use Marriott for aspirational/top-level stays – I prefer the higher-end Hyatts and Starwoods for those – so I’m most likely to book a mid-tier property when I’m staying with Marriott. And I’m not really going to pay more than $225-$250/night for one of those (preferably less!)

A mid-tier Marriott would probably fall into Category 6 or 7 (30,000 – 35,000 Marriott Rewards points/night) so, using what I’d be prepared to pay for one of those hotels, I get a valuation of $0.0064 – $0.0083 per point. I like to err on the conservative side with my valuations so I usually go with a valuation of $0.007/point.

The difference between the original (and to my mind incorrect) valuation and my valuation may not seem like much but it really adds up when you’re dealing with tens of thousands (or even hundreds of thousands) of points:

Someone with 100,000 Marriott Rewards points (which isn’t that many) would value their balance at $1,000 using the first valuation method while I would only value it at $700 – that’s 30% less.

A Variation

Marriott is one of the hotel brands that offers members of its loyalty program a “5^th night free” when making award bookings so this can potentially affect your valuation.

Screenshot from Marriott Rewards showing the 5th night free benefit (click to enlarge)

If I was someone who regularly books stays of 5 nights or more then I’d be getting a little bit more value from my points…..and that would be something I would have to account for.

The 5-night stay is the sweet spot, because I can get 5 nights for the price of 4, so let’s see how that would that affect my valuation?

Assuming, once again, that I would ordinarily choose to stay at Category 6 – 7 hotels and that I wouldn’t be prepared to pay more than $225-$250 per night this is how it works out:

• At the low end I would pay either $1,125 (5 x $225) or 140,000 Points (4 x 35,000) for 5 nights and that would give me a valuation of $0.008/point.

• At the high end I would pay either $1,250 (5 x $250) or 120,000 Points (4 x 30,000) for 5 nights and that would give me a valuation of $0.010/point.

So you can see how taking longer stays can increase the value you can place on a point.

Note: You really have to be someone who regularly books stays of 5-7 nights to be able to justify a valuation using this method. If you’re usually booking shorter stays (ones that don’t give you the 5^th night free) you would be overvaluing your points with this method.

Courtyard Marriott Philadelphia – A Category 7 Hotel

What Can I do Now That I Have A Valuation?

Now that I know how much a Marriott Reward point is worth to me I can make an informed decision when deciding whether use points or cash when making a booking.

Example:

Recently I needed to book a Saturday night stay in London and, because I wanted to be close to the O2 Arena in London’s Docklands, I chose to stay at the London Marriott West India Quay. I’ve reviewed this hotel before (here) and it’s normally fantastic value at the weekends ($135/£90 – $180/£120 per night, including taxes)…but this time the prices were through the roof at $460/£305 for the night.

I had a number of choices:

1. Pay $460
2. Pay 35,000 points
3. Book elsewhere

I ruled out option 3 because I get good, tangible, benefits when I stay at Marriott properties – free breakfast for 2 (full breakfast), room upgrades, free high-speed WiFi and lounge access – and the cash cost of breakfast and WiFi at other hotels would mostly nullify any savings on the room rate. So that left options 1 and 2.

As I mentioned earlier, I value my Marriott Rewards points at $0.007/point and that would mean that, if I paid with points, I’d be exchanging $245 of value ($0.007 * 35,000) for a room that would otherwise cost $460 – so it was a no-brainer to pay with points. And that’s what I did.

To be honest I was never going to pay $460 but, if I was someone who would genuinely consider paying that for a room, knowing how much I value a point can help me decide if I’m putting my points to good use.

Yes, there are circumstances when the value of a point is a secondary consideration – like if you’re super-rich in Marriott Rewards points but not so rich in cash – but those circumstances are exceptions rather than the rule.

The other thing I can do now that I have a valuation for Marriott Rewards points is decide how good their new “cash & points” offering is and if/when I should use it. And that’s what I’ll do in my next post – Marriott Cash & Points Redemptions – Are They Any Good?