Crunching the Numbers on the New Marriott Award Rates

We finally received access to the full award rates for the combined Marriott, SPG and Ritz-Carlton program. With the full integration slated for sometime in August (exact date TBD), there were a lot of anxious travelers out there who were afraid that the powers-that-be would decimate the redemption rates as part of the merger. As of now, this fear remains unfounded, as nearly 70% of the 6,800+ properties in the combined portfolio will require the same or fewer points for a free night under the new award chart, and some will temporarily offer some incredible value until the new Category 8 tier is officially launched in 2019.

However, after decades of traveling and several years writing about points and miles, I have a healthy dose of skepticism anytime a loyalty program announces changes. Will this new award chart really benefit those of us who want to maximize our redemptions? Being a math geek, I wanted to peek behind the curtain of the marketing spin coming out of Marriott to really get into the nitty-gritty of the new chart and determine if this is really a good thing.

A few disclaimers before diving into the analysis. First, any type of large-scale integration like this will never make everyone happy. Marriott and SPG executives simply couldn't lower the award price for every property, so some travelers will be disappointed with these changes. In addition, we still don't know how the program will determine the dates for off-peak, standard and peak redemption rates in 2019. If properties block a large majority of dates during the year for peak redemptions, this may wind up being a stealth devaluation. Finally, there's nothing to stop the program from devaluing the award chart in the future.

Marriott's new award pricing site is actually very user-friendly, as it includes a search tool as well as filtering capabilities. However, you can only see 300 properties at one time, so I've consolidated the entire chart into an Excel spreadsheet and then broke it out in a variety of ways (note the tabs at the bottom). This includes:

• 2018 award rates (A-Z), which take into account the temporary price of Category 8 properties
• 2019 award rates (A-Z), which uses the full Category 8 pricing
• Award chart sorted by brand
• Award chart sorted by category
• Award charts for legacy Marriott/Ritz and SPG brands
• Award charts for each individual brand

I've also added filtering capabilities to each sheet so you can flexibly use the data to your liking.

Let's start with some of the major takeaways that I see.

Is it true that nearly 70% of hotels are staying the same or dropping in price?

I wanted to start off with fact-checking Marriott's claim that nearly 70% of properties would require the same or fewer points for free nights when the new chart kicks in this August, and I also wanted to extend that into next year to take into account the addition of Category 8 pricing. Here were my findings for 2018:

• 2,174 properties will be increasing in price (31.67% of the combined portfolio)
• 1,146 properties will be remaining the same (16.7%)
• 3,544 properties will be decreasing in price (51.63%)

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Here are the same calculations for 2019:

• 2,187 properties will be increasing in price (31.86%)
• 1,144 properties will be remaining the same (16.67%)
• 3,533 properties will be decreasing in price (51.47%)

If you're keeping score at home, it's technically 68.33% of properties in 2018 and 68.14% of properties in 2019 that fall into this category, so you could debate if this is a correct use of the word "nearly." Nevertheless, having over half of your properties drop in price is a very nice change.

What is the average change in price across the entire portfolio?

Of course, the actual magnitude of the price changes is important as well. After all, if all of the properties dropping in price are doing so by just 5,000 points per night while the ones increasing are doing so by 25,000 points per night, it isn't that positive of a change. Here's what the calculations show:

• 2018: The average hotel increasing in price is going up by 4,241 points per night, while the average hotel decreasing in price is dropping by 4,494 points. This results in an overall average drop of 977 points per night.
• 2019: The average hotel increasing in price is going up by 4,326 points per night, while the average hotel decreasing in price is dropping by 4,144 points. This results in an overall average drop of 755 points per night.

As you can see, the properties decreasing in price hold a slight edge for the remainder of 2018, though the introduction of Category 8 in 2019 will reverse this. However, in both 2018 and 2019, the overall average price per night is still dropping.

Were both legacy programs treated equally?

A huge fear among Starwood loyalists was that the new award chart would take away much of the incredible value you could get from redeeming points through SPG. As a result, I wanted to compare the numbers across the two legacy programs (Marriott and Ritz vs. SPG) to see if one was significantly different. Here's what I found:

Legacy Marriott/Ritz:
29.49% of properties are going up
20.15% of properties are staying the same
50.36% of properties are dropping

Legacy SPG:
39.4% of properties are going up
5.6% of properties are staying the same
54.99% of properties are going down

While Starwood does have a larger percentage of properties dropping in price than Marriott does, it's concerning that 10% more SPG properties are going up when compared to Marriott. This isn't the complete catastrophe that many feared, but it certainly doesn't leave the Starwood portfolio unscathed.

How are the individual brands changing?

Another interesting analysis I wanted to undertake was the impact of the new award chart on individual brands to see if there were significant differences that could possibly "hide" a devaluation (spoiler alert: there were). Here's a table that shows each of the program's individual brands along with various calculations related to the new award chart:

That's a lot of numbers through which to sift, but I see a couple of interesting trends that are worth pointing out:

• Luxury brands were (generally) hit harder than others. While there are exceptions (e.g., St. Regis properties are dropping by an average of 3,659 points per night), the majority of luxury brands are seeing net increases in their redemption rates. For example, Autograph Collection properties are going up by an average of 1,728 points per night, while Ritz-Carlton hotels are jumping by an average of 3,172 points per night. The largest drop, meanwhile, is at Element: You'll need to spend an average of 4,000 fewer points for a free night there. If you're a fan of aspirational redemptions, this may be considered a devaluation.
• Families take an even bigger hit. I love having extra space when I travel with my wife and daughter, so if we can redeem our points for suites or villas, that's a terrific value proposition. Unfortunately this takes a serious hit in the new chart. Marriott Vacation Club properties are going up by an average of 7,813 points per night, while VISTA hotels (villa resorts from SPG) are jumping 7,579 points per night. While these two brands only account for 83 locations, a mere 1.21% of the entire combined portfolio, it's still a significant drop for those who are interested in this type of accommodations.

What property is being hit the hardest?

A final interesting item I wanted to see was the property (or properties) being hit the hardest with the new award chart. There is actually a single hotel that earns this unfortunate title: The Westin Riverfront Mountain Villas on Beaver Creek Mountain in Colorado. As a current Category 5 property in the SPG program, it'll set you back 12,000 - 16,000 Starpoints for a free night right now (equivalent to 36,000 - 48,000 Marriott points). Come August, it'll jump up to Category 7 in the combined program, with a standard rate of 60,000 points. In addition, given its location, I'm virtually certain that the property will block all of ski season as peak redemptions once these take effect in 2019.

In other words, if you're hoping to redeem points here for next February or March, I'd get on that ASAP!

What should I do between now and August/the end of 2018?

As the saying goes, "Knowledge is power," and this is certainly true in the points and miles world. However, that knowledge is only powerful if you act upon it, and now's the time to do so with the newly released award chart from Marriott/Ritz/SPG. Here are a couple of key things for you to do between now, August and the end of 2018:

1. Book properties that are going up in price now. If you've been eyeing a redemption that will be going up in price in August, the current award rates are being honored until then, even if the stay takes place later in 2018 or even into 2019. Go ahead and lock in that room before the new chart is implemented. Remember that Marriott allows you to book an award even when you don't have enough points in your account, a nice trick that can help you book now and pay later (as long as you eventually earn the points you need at least a week prior to the start of your stay).
2. Wait to book (or book now and change later) those properties dropping in price. On the flip side of the coin, if you've already booked or will be booking a stay at a property that will require fewer points per night as of August, you'll want to either hold off on booking until the new award chart is implemented or book now and then change your reservation when it takes effect.
3. Book Category 8 properties (including suites-only SPG properties) now. A final tip involves those top-tier properties. For the time being, every future Category 8 property is pricing at the Category 7 level of 60,000 points per night for a standard room. This includes luxurious resorts like Al Maha in Dubai and the St. Regis Maldives, resorts that previously required an exorbitant number of Starpoints but will be available in August for this insanely low price. This pricing should apply for all bookings made through the end of the year, even if the stay itself isn't happening until 2019. If you want to make the most of your points, this is a great (and limited time) opportunity.

Bottom Line

The recently announced award chart from Marriott, SPG and Ritz-Carlton has some appealing aspects on the surface, with over two-thirds of the 6,800+ properties requiring the same or fewer points for a free night once it's implemented in August. I commend Marriott for being transparent with this information and for creating a usable tool for members to explore (Hilton Honors, take note). However, as noted above, there are a few concerning aspects, and we still don't know how the program will determine dates for off-peak, standard and peak redemptions in 2019.

Even though the merger has been generally positive news for members thus far, there's always room for devaluation, and I'd encourage the top brass at Marriott to think hard before implementing any negative changes for quite some time.