As promised or threatened, depending upon your perspective, Marriott dumped their award charts on March 29th. This is awful news for the most expensive Marriott properties since their award prices are no longer capped to the previous category pricing ranges. Except that they are still sort-of capped: For 2022, Marriot has promised that award prices at most of their properties won’t exceed the previous peak prices. And they published a list of exceptions (hotels where the top price will exceed previous peak prices). Anyway, now that hotel categories are gone and dynamic pricing is in near full swing, it was time to reassess the value of Marriott points towards free nights. I had previously analyzed point values shortly before they dropped award charts. And now I’ve had a chance to look at the after picture. Many will be surprised to learn that, on average, the change has been for the better.
In order to determine the value of Marriott points, I collected real-world cash prices and point prices. As I’ve done previously, I examined a number of major hotel markets in the U.S.: Chicago, Denver, Los Angeles, Hawaii, Las Vegas, Miami, New York City, Orlando, and Seattle. Within each market, I identified the first three search results with a guest rating of 4.1 or better, and I recorded both cash and award prices for three dates each: a weekday, a weekend, and a holiday weekend.
- Why U.S. only? U.S. consumers are known to spend most of their points and miles on domestic travel. Since the majority of this blog’s audience resides in the U.S. we opted for a U.S. centric view of point values.
- Why Guest Ratings? The goal wasn’t to find the 3 best Marriott hotels in each market. Instead, the goal was to find the 3 Marriott bookable hotels that are very popular. Which ones are people really likely to book? By using a combination of Marriott’s default sorting and by picking only highly rated hotels, I think it’s reasonable to assume that many Marriott members would pick these hotels.
- Which paid rates were selected? I always picked the best refundable paid rate shown on Marriott’s website, but without applying any discounts like AAA, military, government, etc. In most cases, I selected Marriott’s “Member Rate Flexible”.
- What about point earnings on paid rates? An ideal analysis may include the value of point earnings on paid rates. For simplicity, this was not considered in this analysis. This decision has the effect of over-valuing Marriott points. See the section on Overvaluing vs. Undervaluing Points for more details.
- What about taxes and fees? For simplicity, taxes and other fees are not included in this analysis. This decision has the effect of under-valuing Marriott points. See the section on Overvaluing vs. Undervaluing Points for more details.
- Which specific dates did I use?
- Weekday: Wednesday April 27, 2022
- Weekend Day: Friday April 29, 2022.
- Holiday Weekend Day: Saturday April 16, 2022 (Easter Weekend).
|Point Value (Median)||0.75||0.66 cents||0.63||0.62|
|Point Value (Mean)||0.81||0.73 cents||0.66||0.67|
|Cash Price (Median)||$303||$284||$246||$246|
|Cash Price (Mean)||$392||$305||$303||$282|
|Award Price (Median)||42,000||50,000||42,500||40,000|
|Award Price (Mean)||46,761||44,203||46,212||44,802|
|Minimum Point Value||0.31||0.34 cents||0.26||0.30|
|Maximum Point Value||1.71||1.89 cents||1.38||1.67|
The median observed point value was 0.75 cents per point. That’s about 14% better than the before they eliminated categories. The median means that half of the observed results offered equal or better point value and half offered equal or worse value. Another way to think about it is that without trying to cherry pick good awards, you have a 50/50 chance of getting 0.75 cents or better value from your Marriott points when booking free night awards.
Pick your own point value
|50th Percentile (Median)||0.75||0.66 cents||0.63||0.62|
|60th Percentile||0.80||0.73 cents||0.66||0.66|
|70th Percentile||0.91||0.80 cents||0.73||0.77|
|80th Percentile||1.08||0.85 cents||0.83||0.81|
|90th Percentile||1.21||1.03||0.98 cents||0.96|
When we publish Reasonable Redemption Values of points (RRVs), we conservatively pick the middle value, or the 50th percentile. The idea is that just by randomly picking hotels to use your points, you have a 50/50 chance of getting this value or better. But what if you cherry-pick awards? Many people prefer to hold onto their points until they find good value uses for them. If that’s you, then you may want to use the table above to pick your own point value. For example, if you think that you’ll hold out for the best 10% value awards, then pick the 90th percentile. If you cherry-pick a bit, but not that much, you might want to use the 70th percentile (for example). I’m guessing that most cherry-pickers will land around the 80th percentile: 1.08 cents per point. That’s up considerably (27%) from the pre-dynamic-pricing value of 0.85 cent per point.
To me, this analysis shows that those who cherry-pick good value awards can count on getting around 1.08 cents per point value, or better. Before dynamic award pricing, I had written “while more than 1 cent per point value is possible, I wouldn’t count on it.” Now, it should be easy to achieve.
New Reasonable Redemption Value: 0.75
Our Reasonable Redemption Value (RRV) for Marriott points was previously set to 0.66 cents per point. RRV’s are intended to be the point at which it is reasonable to get that much value or better for your points. Therefore, I believe that the median observed value for is a good choice for our RRV…
- New Reasonable Redemption Value for Marriott: 0.75 cents per point
- Reasonable Redemption Value for those who cherry pick awards: 1.08 cents per point
Overvaluing vs. Undervaluing Points
A number of people have argued that I should include taxes in the hotel rates used for analyses like this one because leaving out taxes means undervaluing points (since free night awards do not incur most taxes). However, there are many factors besides taxes that are equally important and also, for the sake of simplicity, are not included in my analyses. My hope is that these factors roughly balance each other out…
Factors that cause us to undervalue points
- We do not include hotel taxes in our analyses. Most taxes are charged on paid stays but not award stays.
- With hotel programs that offer 4th Night Free Awards (IHG, with some credit cards), or 5th Night Free Awards (Hilton & Marriott), or award discounts (Wyndham), we do not consider the point savings in our analyses.
- With hotel programs that offer free parking on award stays to top-tier elites (Hyatt), we do not factor this in.
- With hotel programs that waive resort fees on award stays (Hilton, Hyatt, Wyndham), we do not include resort fees in our analyses. Update 3/30/22: going forward, I plan to include resort fees in the analyses for these programs.
Factors that cause us to overvalue points
- We do not use discount rates (other than member rates) in our analyses. In real-life, many people book hotels cheaper (and sometimes far cheaper) by using AAA rates, government & military rates, senior rates, etc.
- We do not use hotel promotional rates. Often, individual hotels have deals such as “Stay 2 Nights, Get 1 Night Free” which can greatly reduce the cost of a stay.
- We do not use prepaid rates in our analyses. Sometimes these rates are significantly lower than refundable rates.
- We do not factor in rebates which can be earned from booking hotels through shopping portals.
- We do not factor in points earned from paid stays. These points can be thought of as a rebate on paid stays only.
- We do not factor in extra points earned on paid stays for those with elite status.
- We do not factor in hotel loyalty program promotions: Most promotions, but not all, only offer incentives for paid stays. We often see promos offering bonus points, double or triple points, free night awards, etc.
Given the factors listed above, I think that including taxes in our analyses would lead us to over-value points.
Based on the latest analysis, I’ve increased our Marriott RRV from 0.66 to 0.75 cents per point. The idea is that you have equal chance of getting that much value or more from your award stays. That increase doesn’t tell the whole story. The latest percentile results show that it’s reasonable (80th percentile) to expect to get 1.08 cents per point or better if you cherry-pick good-value awards. That’s a huge increase from the previous 80th percentile of 0.85 cents per point.
While many will no doubt be frustrated that their favorite Marriott properties have gone up in award price, this latest analysis shows that on average award prices have gone down. That’s good news. For now. It is possible/likely that Marriott has purposely set award prices lower for now while blogs like this one are watching. If so, we can expect them to quietly increase award prices over time. Without award charts, they can (and will) do that at will and without notice. But we’ll still be watching! I plan to repeat this analysis regularly over time so that we’ll know if/when Marriott devalues their points.
For a complete list of Reasonable Redemption Values (and links to posts like this one), see: Reasonable Redemption Values (RRVs).