Marriott Switching To Dynamic Award Pricing

Yes unfortunately you heard that right! Marriott is scrapping its reward chart to what it is calling ‘Flexible Point Redemption Rates’ AKA Dynamic Award Pricing. This means starting in March 2022 redemption pricing will now be driven by the cash cost each night. The previous fixed peak and off-peak pricing have been scrapped which removes the possibility of outsized value redemptions when cash rates are high.

How will Marriott’s switch to Dynamic Award Pricing work?

Over the next 2 years (starting in March 2022), the changes are going to be phased in…

1. In March 2022 the transition begins. The old reward chart will be removed and the vast majority of hotels will charge anything between their off-peak and peak pricing. You can view that here – https://www.marriott.com/loyalty/pointsGridPopUp.mi. Unfortunately this means some hotels will switch to Dynamic Award Pricing before 2023! This is likely to be aspirational hotels such as ones in the Maldives & high-end properties in places such as London & New York.
   
2. From 2023 the switch to Dynamic Award Pricing will be complete. All hotels will no longer have a maximum or minimum price and will closely follow cash prices. What isn’t clear yet is that if this will be for booking made from March 2022 for bookings in 2023 or something that will be phased in a little later.

Are there any benefits from switching to Dynamic Award Pricing?

Well if you ask Marriott, yes! Apparently, the switch will increase reward availability (not that we’ve ever struggled to get a reward room.) But unless Marriott changes the way they pay hotels for redemptions it’s unlikely this will make any difference. At the moment Marriott pays a hotel a variable amount of money for your stay depending on how busy it is. If it’s empty then they will only receive enough to cover your stay e.g. cleaning & amenities. Whereas If it’s busy they will receive a much higher rate (presumably close to the cash rate.)

If Marriott doesn’t increase the amount of money hotels are paid when they aren’t full. Why would they open more reward availability?

The second area of concern is if Marriott moves to a ‘fixed’ value of a point, similar to schemes such as Nectar. If this was the case it would become inherently less attractive. One of the key attractions of loyalty schemes is the idea of ‘beating the system,’ where you’d get an outsized return on your points compared to the cash rate. Otherwise, you might as well just collect cashback and spend it wherever you like! There would certainly be no incentive in saving up for larger redemptions, you may as well earn and burn!

What I should I do?

We would be wary of keeping large Marriott point balances. If you are thinking of booking any high-end or aspirational hotel we would do so before March 2022. This way you will lock in the previous reward pricing. If you decide not to go (or on the off chance it’s cheaper after the changes) you can always cancel. You can also lock in rates for key holidays dates before the change to Dynamic Award Pricing.

Conclusion

It’s always unfortunate when there are significant changes to loyalty schemes, particularly if they appear to be detrimental to users. If they follow a similar model to Hilton where the reward rates are variable but still have a maximum then we’ll be happy… but we have our doubts! Our strategy? We are going to burn what we have on a few nice destinations before the changes! After this, we will reevaluate our staying/points earning and go from there! What do you make of Marriott’s switch to Dynamic Award Pricing?