When Marriott launched its new program back in August they re-adjusted the redemption categories hotels were assigned to, after having done the same thing just months earlier. Moreover they ‘pre-announced’ about 60 hotels that would become more expensive in 2019 with the introduction of a new higher category 8.
Al Maha Desert Resort
More Hotels are Going Up Than Down By a 9-to-1 Margin
Out of over 6900 properties Marriott reports that about 5% are changing category — and the increases outnumber decreases 4-to-1 (4% increasing, 1% decreasing). That doesn’t include the already-announced 1% of properties going up to category 8 and it doesn’t account for rounding.
I count just over 5.5% of Marriott properties or 383 hotels changing category, with increases outnumbering decreases 346 to 37. And that’s generously counting one of the ‘decreases’ as a hotel that was previously announced to be going up to the new category 8 level which instead will stay the same (St. Regis Osaka).
Oddly Marriott is promoting how much category inflation there’s been in the program in past years (“over the past 5 years between 10 – 15 percent of the portfolio went up a category”) to suggest this year’s changes are modest. Here’s what we’ve seen over the last 7 years:
- Substantially more hotels became more expensive in points than less expensive in 2012.
- Then in 2013 they increased the price of 36% of hotels and dropped only 1% while introducing a new more expensive award tier.
- 2014 saw a 4:1 ratio of increases to decreases in points prices for hotel redemptions.
- 2015 was 3:1 increase.
- In 2016 ‘only’ 560 hotels went up in points prices while 237 went down.
- In 2017, with Starwood merger news fresh, they only increased 1.5 times as many hotels as they reduced.
- In 2018 they increased points prices at over 1000 hotels with 21% of hotels getting more expensive and 5% getting less expensive.
High and Low Season Pricing Doesn’t Start Yet
When Marriott announced their new program they shared what the new award chart would become. It had 8 categories starting in 2019, and also high and low season pricing. That meant while the most expensive redemption in the new August 2018 program cost 60,000 points per night, that would go up to 100,000 in mere months.
While category 8 pricing starts March 5, high and low season pricing does not. Marriott hasn’t said when this will start, only that “it will be announced later this year.”
In the meantime the most expensive redemption goes from 60,000 points per night to 85,000, a 42% increase.
Why Hotels are Changing Category
The category a hotel is assigned to doesn’t determine how much the property gets paid when you redeem points. It simply determines how much you have to pay Marriott Rewards for the redemption.
With the program having just adjusted this pricing back in August, and with many members disgruntled over continued self-inflicted wounds by the program mostly over IT but also over compliance with new program benefits — which will always be a challenge in a company that’s now so far-flung — it’s not surprising that the number of properties going up in price is being held down. Perusing the list I do not see any hotels that are going up or down more than one category.
Though the amount hotels are reimbursed on award stays isn’t determined by its category, hotels themselves will sometimes ask the program to lower the category they’re assigned to. It’s a way to stimulate demand. “Starwood Lurker” William Sanders has written about this in the past, and it’s the same in the program today. A hotel may have low occupancy but high enough average daily room rates to justify a higher category, where the program might be willing to lower the amount it charges members knowing that there will be very few dates it has to reimburse the property at a higher level based on being nearly sold out. A hotel might also want to compete with other more favored properties in the same region by pushing down its category.
Otherwise, for the most part, category changes — especially those moving upwards — should be driven by a hotel’s average daily room rates and Marriott wanting to adjust the number of points it charges based on how much they have to pay hotels.
The move towards high and low season is a further adjustment to align program costs with the points they’re charging members, in other words to shift towards a more revenue-based redemption model. During a hotel’s high season they’re going to sell out more nights and generate greater reimbursements from the program, so the program will charge members more. Similarly during low season the program can generate extra demand for the hotel with lower points pricing while they don’t risk having to pay out higher compensation.
Some Hotels Become Better Value, Many More Go Up in Price
Marriott highlights that Naka Island Resort in Phuket is dropping in Phuket, Thailand is dropping from category 7 to category 6 — this is one of the hotels that used to cost double points in Starwood’s program and would get discounted as part of their ‘Paradise is Closer’ promotion down to 26,000 Starpoints per night (78,000 Marriott points). It’s going down to 50,000 Marriott points per night.
The Sheraton Maldives Full Moon Resort drops to category 6. With other options going up to category 8 I see this being attractive to some members as a strong value, though personally if I’m going to travel all the way to the Maldives I want the best possible accommodations since you’re largely going to remain on-property throughout your stay.
Similarly with the Le Méridien Ile des Pins in New Caledonia a category 7, the Sheraton in New Caledonia may be super attractive dropping to category 4.
The Hotel Bristol in Vienna becomes a nice value dropping to category 5, while Marriott notes that the Ws in Hollywood and West Beverly Hills are dropping a category too.
In all that means 37 going down in price while 346 go up.
- 1 hotel drops from planned category 8 to 7; 7 hotels drop from category 7 to 6; 3 drop from 6 to 5; 12 drop from 5 to 4; 9 from 4 to 3; 4 from 3 to 2; and 1 from 2 to 1.
- 34 category 1 hotels go up to category 2; 37 go up from category 2 to category 3; 49 go up from category 3 to category 4; 64 go up from category 4 to category 5; 72 go up from category 5 to category 6; 22 go from category 6 to 7; 68 become category 8.
What You Should Do Now
Hotels that are going up should be booked now. Most redemption bookings are cancellable, so you can make speculative reservations based on the points you have available. Watch for cancellation policies though because some resorts especially in their high season might have policies more onerous than a standard 72 hours — some even have 30 days.
If you happen to have a room booked, or plan to book one, at a property going down in price you’ll want to reprice is March 5 onward.
The hotels to really focus on in my opinion are the ones going up to category 8, since that’s the biggest jump in points required. (And it’ll be great to get these for just 60,000 points while they’re still category 7, compared to when high season for category 8 gets introduced and they go up to 100,000).
St. Regis Maldives Overwater Villa, credit: Marriott
Here are the New Category 8 Hotels
Marriott announced in August that 61 hotels would ascend to their new category 8.
In fact the London Edition, Las Alcobas Napa Valley, Ritz-Carlton Ras Al Khaimah, Ritz-Carlton Dubai, W Hong Kong, Scrub Island Resor, Pine Cliffs Residence in Portugal, and Westin Venice all are going up to category 8 as well — and the St. Regis Osaka ultimately is not. That leaves 68 hotels in category 8 starting March 5.
Here’s the original list: