Marriott's new dynamic pricing will make award nights more expensive for those who can only travel during peak season. Those with some flexibility in their schedules, however, may be in for a treat.
Marriott is set to make significant changes to the way that its Bonvoy loyalty members pay for award nights with points. Starting in September, the program will move to a dynamic model that prices awards across three tiers as a function of demand. In the peak season or when a hotel is otherwise busy, members will pay 14–33 percent more for an award night. On the other hand, off-peak discounts in the equivalent amount will be applied when hotel traffic is light.
The hotel giant this week published a new redemption chart outlining the tiers as well as a series of videos illustrating how the program works.
Marriott’s move comes in the midst of a global industry trend in which travel industry loyalty programs are moving toward dynamic pricing in selling award seats or nights. In the airline industry, both Delta and United have moved to a hybrid dynamic policy that brackets award seats into basic tiers and adjusts pricing based on current demand — American Airlines is signaling the same.
Hotel loyalty programs, too, have dabbled with dynamic award pricing, though not with the same peak and off-peak instruments that Marriott plans to use. Hilton revamped its Honors program in 2017 to allow travelers to dynamically pay with cash and points, bringing more flexibility and potential out-of-pocket costs for travelers into the system.
Marriott’s tack in this case seems to be more of a light version of dynamic pricing. While it’s not pinning award nights directly to the active, off-the-shelf cost of a hotel room, it’s acknowledging that costs go up during busy times and it’s adjusting rates to reflect that. As a result, Bonvoy members will see fewer deals when searching for award nights during high season — but on the flip side, rates will also get cheaper when volume is light.
Notably, peak rates will also be determined as a function of hotel bookings and capacity and not necessarily based on direct seasonality. As a function of that, those who book early may still be able to find standard or even off-peak rates if the rooms are found early enough. For others, like the host in the Marriott video suggests, the best option “is to be creative with your travel planning.”
Rates officially go into effect on September 14.
Grant Martin [[email protected]] curates the Skift Business of Loyalty newsletter. He is also a director of product marketing at TripActions. Skift emails the newsletter every Monday.
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Photo credit: The JW Marriott Shanghai Pudong. Marriott International