Marriott Travel Packages: worst-case scenario

The Marriott Travel Package Conversion chart is out, and it isn’t very pretty. The outcome was pretty close to Greg’s worst-case scenario. While I had assumed that Marriott was refusing to tell us how the certificates would map because they intended an overly generous solution, the outcome wssn’t so generous at all: most people who didn’t attach a certificate before are actually losing value, and many could have paid less to get the same thing. It’s a disappointing end and I think a missed opportunity for Marriott to wow customers on Day 1 of the new program.

The Mapping Chart

Here is the chart that Marriott provided to show us how Travel Packages would map:

And here is how they explained that chart:

No certificate is losing value in terms of points, and with the new free night award chart that goes live today 70% of our properties either stayed at the same threshold or moved down. As we structured the conversion chart, we took into account the introduction of peak and off-peak redemption rates which will be introduced in early 2019. This means, that if you have an existing Category 9 certificate which maps to Category 6 starting today, holders will still be able to attach a stay when rates within that category are at their highest.

Wow. That’s an overly generous characterization.The reality is that this mapping creates more losers than winners in terms of the value of Travel Package certificates. Here are some of the key groups that came out behind.

Anyone who bought a Category 6, 8, Ritz Tier 1-3 package

This one is simple: if you bought any of the above Travel Packages, you might feel like you got robbed of 30K points. That’s because you could have bought the next level down for 30K points fewer and ended up with the same thing. By a stroke of luck, I was inspired to upgrade my Category 6 certificate to a Category 9 at the last minute on Friday afternoon, giving me a very small win. If I’d have stuck with the Category 6, I’d have felt like it was a raw deal since I could have bought a Cat 1-5 and ended up with the same thing: a “new” Category 1-4 certificate. Surely those who bought these categories will feel like Marriott kept us in the dark to soak some folks for 30K extra points.

Of course, the other perspective is that Marriott designed these packages for people to book a hotel category rather than hold onto a certificated as some type of stored value. And in fact they gave us quite a bit of notice to search for good value. For instance, if I had kept my Category 6 and attached it to a reservation at the JW Marriott Phu Quoc, I’d have gotten a week at a property that now costs 35K points per night — both getting more value than I “paid” for and more value than I could if I waited until today to attach it.

Anyone who bought a Ritz Tier 4-5 package

The best this group can do is come out even, but if you bought this certificate and intended to make a reservation this year, you are coming out behind. That’s this package that was valid at properties that charged up to 70K points (Ritz Tier 4). In the new program, the top-tier properties will only cost 60K points per night until early 2019. In off-peak periods, this certificate will buy you a 50K property. There is one small upside: it looks like next year’s Category 8 hotels are listed as Category 7 for now, so I believe you’ll be able to attach this certificate to what will become Category 8 properties if you do so before early 2019.

Anyone who stays at a non-peak time

While Marriott has pat itself on the back a number of times with claims about how many properties are going down in price, they make that claim based on the new “standard” pricing of hotels. Yet they mapped these certificates based on peak pricing. Marriott is claiming that properties went down in price based on standard pricing yet they are telling you your Travel Package certificate maintained its value based on peak pricing. Talk about trying to have your cake and eat it, too!

For example, imagine a property that was old Category 6 — that category was 30K points per night yesterday. If Marriott has now classified that property as a Category 4 (25K points per night at standard pricing), they have claimed that it went down in price (a claim that Stephen Pepper has shown isn’t really as genuine as Marriott would like you to believe). Your old Category 6 Travel Package certificate used to work at properties that cost 30K — but now it will buy you 7 nights at that same former Category 6 hotel. If that hotel decreased in price, and the maximum value of your certificate will not get you something more than 7 nights at that same property, did your certificate not decrease in value also? Marriott will tell you it maintained its value, but that is a half-truth at best.

Almost anyone who will use a certificate during “standard” or “off-peak” pricing times

As noted above, Marriott made a pretty chart based on peak pricing to try to show Travel Package certificates maintaining value. Peak pricing won’t even debut until sometime next year — and even then, you may not stay at a peak time. Here’s a chart showing how the packages are mapping based on “standard” and “off-peak” pricing:

You’ll note that there is only a single cell shaded in green above. That’s the only scenario where the new certificates are a win. That’s it. Any other certificate and the best you did was break even if you reserve during a standard or off-peak time (and remember that if you make a reservation before early 2019, even if you stay during late 2019, there is only standard pricing — meaning that if you intended to make a reservation before 2019, the true value you’re getting is based on the standard pricing column above.

Remember that probably you still won

I won’t lie — I’m really disappointed in the way that Marriott handled thi. However, I think it is important to keep in mind that travel package certificates were a good value for most people.

For example, a Category 8 certificate was 360K Marriott points — the equivalent of 120K Starpoints. Had you converted those Starpoints directly to airline miles, you could have had 150K airline miles (and no hotel stay). With a travel package, you essentially gave up the opportunity to earn 30K miles in exchange for a 7-night certificate which is now valid at properties that cost 35K points at standard pricing. That’s not bad.

And from that perspective, most packages aren’t a terrible deal. If you otherwise would have used your points for airline miles, you could look at this from the perspective of an opportunity cost in terms of the number of miles you could have had (over the 120K that came with the package). In essence, you gave up this number of “extra” miles you could have had in order to get a 7-night certificate. See the following chart for your opportunity cost in miles for each level.

As you can see, that’s a pretty reasonable trade in most cases for a 7-night hotel stay. In my opinion, the value starts to becom questionable at Ritz Tier 1-3 since 55K Alaska miles could be redeemed for a 1-way business class ticket to Australia. Whether or not you’ll get an equivalent value out of the 7-night certificate depends on how you use it (and whether or not you would have used those miles to go to Australia or some other similarly-valuable use). The Ritz Tier 4-5 package represents the largest opportunity cost, and it isn’t small.

It’s disappointing that Marriott massively devalued the 7-night certificate for those who did not yet attach it, but it was still a good deal in most instances.

Bottom line

Marriott noted that they were encouraging members to attach certificates before 8/18 if members knew where they would like to stay. I wasn’t sure what to make of that, but it is now clear that the reason to attach was to avoid losing value. As mentioned above, I upgraded my 6 to a 9 before the deadline. I was tempted to leave it unattached, but Greg convinced me that there would be no harm in attaching since the likely worst-case scenario would be that I would get the same value out of the certificate as an unattached certificate — and he is right. Those who attached a certificate to a property going up in value certainly came out of this much better off as the certificate would otherwise lose value for everyone but Category 9 holders. Here’s hoping you attached your certificate — and that you can now make that trip work, otherwise you’re facing a devaluation.

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