TPG Points Lab: How significant is Marriott's new peak and off-peak pricing?

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The Points Lab is TPG's newest team, dedicated to using data and leveraging technology to create resources, tools and analyses to help readers more effectively and efficiently use their points and miles. After kicking off with a deep dive into Lufthansa first-class award availability, today we'll analyze Marriott's new peak and off-peak pricing.

Roughly three years after finalizing a deal to acquire Starwood Preferred Guest (and just under 13 months after formally integrating the programs), Marriott's long-awaited peak and off-peak pricing arrived on September 14. This is the final major element in the rollout of the Marriott Bonvoy program — accompanied by an unfortunate devaluation in the Points Advance functionality.

However, just how significant is this new pricing scheme? Marriott has said that most dates will retain standard award prices, and members will find a roughly even distribution of peak and off-peak dates across the program. But here at The Points Lab, we wanted to crunch the numbers to see what this means for you.

The methodology

With the implementation of peak and off-peak pricing, a given property can now vary in price across dates, in some cases quite significantly. A top-tier, Category 8 hotel could be 70,000 points one night (off-peak) and 100,000 points the next night (peak). That's a difference of nearly 43%. However, the key question is how frequently each property uses peak pricing compared to off-peak pricing. An equal distribution of the two would mean that the average award rate across the year would be equivalent to the standard rate. However, a higher proportion of peak dates would raise the average award rate.

We feared this would be the case at some of Marriott's most popular properties in high-demand markets. So to test this hypothesis, we pulled award data from the entire Marriott calendar for the upcoming 50 weeks (to the end of Marriott's booking window) and counted the number of peak, standard and off-peak dates that were available for the following sample groups of properties:

• Category 8 hotels
• Maldives hotels
• London hotels
• Hawaiian hotels
• Cape Town hotels

We then used this data to calculate an "average" award rate for each individual property, and then calculated the overall percentage change based on pre-Sept. 14 rates. This can help quantify the impact of peak/off-peak pricing — as in, an average night at a Category 8 hotel has increased/decreased by X%, the average London property has increased/decreased by Y%, etc.

In addition to these clearly-defined groups, we also looked at the properties we've highlighted in the past as great uses of the 35,000-point certificates (here and here) along with the 50,000-point certificates (here and here) that are provided as annual perks on select Marriott credit cards. Since peak dates at these hotels will no longer be eligible for certificate use, we wanted to get an idea of how much this new pricing will impact the program's cobranded credit card portfolio.

Note that in counting dates, we only used ones with award availability. If a property was sold out or not offering awards, it's not possible to determine the rate for that date. While it would be reasonable to assume that those dates are high demand and thus peak — especially given Marriott's toothless blackout dates policy — we wanted to focus only on the data at hand.

Category 8 hotels

There are currently 69 hotels that fall into Marriott's top category, including luxurious properties like Al Maha Resort and the St. Regis Maldives. These hotels require 70,000, 85,000 or 100,000 points on off-peak, standard and peak dates (respectively), but given how sought-after these are, would off-peak awards be a unicorn?

Here's what we found when we looked at the distribution of prices:

• Off-peak: 24.04%
• Standard: 58.7%
• Peak: 17.26%
• Average award rate: 83,715
• Overall change: -1.59%

As you can see, based on current peak and off-peak dates, Category 8 properties actually offered a net positive when it comes to pricing versus pre-Sept. 14 rates. While just under a quarter of dates fell into off-peak — requiring just 70,000 points per night — just over 17% of the available dates for awards were classified as peak. This resulted in an average award rate of 83,715 points, or 1.5% lower than the standard rate of 85,000 points per night.

Some individual properties had astonishing numbers too, like Cristallo, a Luxury Collection property in Italy. A whopping 157 dates (80%) fell into off-peak, dropping its average award rate nearly 13% — to 74,056 points per night.

However, it's not all good news. Thirteen of the properties saw net increases in award prices, including a whopping 4.04% jump at the Domes of Elounda and a 2.55% increase at the JW Marriott Maldives (more on the Maldives below).

Finally, it's also worth noting that several properties even had PointSavers award availability, including two in Koh Samui: Thailand: Vana Belle, a Luxury Collection Resort and the W Koh Samui.

Maldives hotels

The island nation of the Maldives is what award travelers' dreams are made of, and there are many points hotels across the country's various atolls. Five of them belong to Marriott, so let's see how they fared in the implementation of peak and off-peak pricing:

• Off-peak: 18.24%
• Standard: 58.93%
• Peak: 22.83%
• Overall change: +0.94%

The Maldives didn't fare quite as well as Category 8 properties, as the available awards were more likely to price at peak levels than off-peak ones. However, nearly 59% of the dates fell into the standard award band, which is quite solid for such a high-demand destination. Overall, the effective price per night based on current award availability increased by just under 1%.

As far as individual properties go, the W Maldives fared the best, with a whopping 63.5% of available dates pricing at standard award levels and 19.5% at peak (17% were off peak). The St. Regis Maldives also wasn't too bad, with 60.7% at standard, 17.3% at off-peak and 22% at peak. However, the JW Marriott was the hardest-hit property, with only 55.7% at standard, 29.3% at peak and just 15% at off-peak.

London hotels

Another popular area to redeem Marriott points is London, as paid rates for these properties can climb quite high — especially during the summer. With 35 hotels spread across the city, there's a wide variety of accommodations, including a handful of Category 4 locations. Let's see how much of an effect peak and off-peak pricing has had on these properties:

• Off-peak: 26.41%
• Standard: 52.70%
• Peak: 20.89%
• Overall change: -1.08%

As you can see, London properties under the Marriott Bonvoy umbrella come out a little ahead under the peak and off-peak pricing scheme. Just over half of the dates came in at standard award pricing, while roughly 21% were classified as peak.

Another interesting note: Just a single property (the Residence Inn Marriott London Bridge) saw a net increase — and even that was just 0.29% thanks to 70 off-peak dates and 75 peak dates.

Hawaiian hotels

For U.S.-based travelers, Hawaii is often high on the list of bucket-list destinations, and the Aloha state has no shortage of points hotels from which to choose — including 36 from Marriott with published award rates (another, the Sheraton Kauai Resort Villas, is slated to open next month but isn't currently taking reservations). Are they pricing higher now that peak and off-peak rates have arrived?

Here's what the data shows:

• Off-peak: 24.51%
• Standard: 55.01%
• Peak: 20.48%
• Overall change: -0.48%

Like London, Marriott's Hawaiian properties saw a slight decrease in the overall award rate. A handful saw slight increases, but the majority of individual hotels dropped in price — led by a nearly 2.5% drop at the Westin Nanea Ocean Villas, Ka'anapali. And like the others above, over half of the dates fell into the standard category.

Cape Town hotels

If you're looking to get some incredible value for a relatively small outlay of Marriott points, consider heading to South Africa. Thanks to numerous Protea Hotels, the country offers some terrific properties, and many fall into the lowest tiers of Marriott's award chart. Cape Town — a favorite city of mine — and its surrounding areas have 16 properties under the Bonvoy umbrella, so how does the new pricing scheme impacts these hotels?

• Off-peak: 26.27%
• Standard: 53.06%
• Peak: 20.66%
• Overall change: -1.07%

You're probably starting to see a pattern here, as (again) over half the dates were classified as standard, and there were more off-peak dates than peak ones. The data is quite similar to London, with an overall decrease of roughly 1% and just a single property that saw a net increase in its award rate. The Protea Hotel Franschhoek — in wine country east of Cape Town — had just 11% of its available dates classified as off-peak and over 31% as peak, resulting in a 4% increase in its average award rate.

Free-night certificates

The final two groups involve free-night certificates issued on select Marriott credit cards. However, instead of looking at all properties in the corresponding award tiers (which number in the thousands), we looked at a total of 18 Category 5 hotels and 17 Category 6 ones — all of which were identified by our writers and editors as great uses of these certificates.

The key piece of information here is how many dates fall into peak pricing, thus removing the possibility of using the certificates.

35k certificates

• Off-peak: 23.84%
• Standard: 55.83%
• Peak: 20.34%
• Average award rate: 34,812
• Overall change: -0.54%

As you can see, roughly 20% of the dates at these 18 Category 5 properties now fall into peak pricing, which means that these certificates wouldn't be valid. However, the overall rate did drop by roughly half a percent thanks to a slightly higher proportion of dates classified as off-peak.

50k certificates

• Off-peak: 23.8%
• Standard: 56.45%
• Peak: 19.75%
• Average award rate: 49,531
• Overall change: -0.94%

A similar story here, as roughly 20% of dates across these 17 Category 6 properties would no longer be eligible for the free night certificates (worth up to 50,000 points) on the Marriott Bonvoy Brilliant® American Express® Card. However, the overall rate dropped by just under 1%.

Category 6 impacts

Of course, it's important to remember that the 35k certificates now has new properties that previously weren't available — namely, off-peak Category 6 properties. As a result, the roughly 20% in peak dates in the Category 5 for these certificates isn't a total loss, as it will be offset at least in part by higher-category locations that are now eligible for certificate use on off-peak dates. But will this cover all of the loss?

Let's assume that all Category 6 hotels follow a similar breakdown as the groups above, with roughly 24% in off-peak, 20% in peak and 56% in standard. Remember that Marriott uses a 50-week advance booking window, so you have 350 available nights per property. Losing 20% of those to peak pricing is 70 nights per hotel. Multiply that out over the entire portfolio of these properties:

• 35k certificates: 1,181 hotels x 70 nights = 82,670 nights

We can then apply the same math to Category 6 properties to estimate the number of newly-available nights eligible for these certificates. If 24% fall into off-peak, that's 84 nights per hotel:

• 35k certificates: 399 hotels x 84 nights = 33,516

As you can see, only 40% of the lost nights on the 35k certificates are offset by new Category 6 hotels. Again, these are extrapolations, but they can at least give you an idea of the impact peak and off-peak pricing has on these certificates.

And unfortunately, since off-peak rates at Category 7 hotels only drop to 40,000 points per night, the free night certificate on the Bonvoy Brilliant card has no additional properties available — unless you can find an off-peak, PointSavers room.

Is this tied to paid rates?

There's no question that the implementation of three award levels is a form of dynamic pricing, but how closely do these levels follow paid rates? Based on some of the months I saw, there's some correlation, but it's far from clear.

Let's take a look at the Moxy London Stratford in the month of October as an example. Here's what the month-long calendar looks like for award stays:

And here's the exact same date range, but for paid rates:

Rather than having the lowest-priced dates correspond to off-peak award rates, there's a range for each award level:

• Off-peak dates: Prices range from 66 GBP to 168 GBP
• Standard dates: Prices range from 66 GBP to 124 GBP
• Peak dates: Prices range from 94 GBP to 154 GBP

There's a small correlation here, but it's far from perfect. So as always, be sure to crunch the numbers before you book your award stays using Marriott points to make sure you're getting a solid value. I'd argue that's even more important now than it was before.

Overall takeaways

Overall, we crunched the numbers on nearly 200 properties covering a wide swath of the Marriott portfolio. As a whole, what are some conclusions we can draw from this data?

Marriott's claim regarding standard rates is accurate.

As noted above, Marriott insisted that the majority of dates would fall into the standard classification, and based on the data from this sample set, that claim is accurate. Across the entire list of properties, 55.87% of the available dates had standard award pricing. In fact, just a handful of individual properties fell below the 50% mark.

There are more off-peak dates than peak dates.

In addition to seeing over half of the dates classified at the standard award level, we saw a notable difference in peak and off-peak dates across the sample set of properties:

• Off-peak: 24.6% of available dates
• Peak: 19.53% of available dates

This resulted in a net decrease in average award rates of 1.03%. Given the spread of over 5%, I'm willing to say with confidence that the Marriott Bonvoy program as a whole has more peak than off-peak dates. However, there were several hotels that saw more peak dates than off-peak ones, so this isn't universally true across every Marriott property.

Certificates lost some value.

As a whole, I think it's safe to say that the free night certificates offered by certain Marriott credit cards have lost some value in the new pricing scheme. Assuming the above percentages hold true portfolio-wide, roughly 20% of the previously-available nights are now no longer available due to peak pricing. And because the higher category has a lower number of properties, the newly-available nights thanks to off-peak pricing doesn't come close to covering the losses.

There's a lot of variability.

To me, one of the most surprising things about peak and off-peak pricing is how much the dates vary. I was under the (mistaken) impression that these would be much more clearly defined than it appears they are. There were a handful of months at these sample properties with the same award rate every day, but the vast majority had two or even all three award levels — sometimes in a single week. I noticed numerous examples where a property might have Friday and Saturday as peak dates on one week, and then just Friday the following week. As noted above, this variability wasn't tied directly to paid rates, though I'm sure there's at least some connection there.

In addition, the off-peak dates didn't necessarily correspond to the "worst" times to visit a given destination. For example, most of the London properties had scattered, off-peak availability from October 2019 through the end of May 2020 — rather than being clustered entirely in January and February. This varies from property to property, of course, but don't assume that off-peak = unusable award inventory.

Bottom line

At the end of the day, your view of Marriott's peak and off-peak pricing depends on your typical travel patterns. If you only ever travel during popular times and are accustomed to getting huge value from your points, you're likely to be disappointed. However, the numbers we crunched below show that from a broad perspective, the implementation of peak and off-peak pricing has generally resulted in slightly lower award rates.

The Marriott Bonvoy program is far from perfect, with its toothless no blackout dates policy, devalued Points Advance policy and wildly inconsistent breakfast policies. It also remains to be seen how significant the monthly peak/off-peak date adjustments will be. Nevertheless, I think the implementation of this new pricing scheme could've taken away much more value than it did.