Mar192014

Overview of Marriott Rewards 2014 category changes effective April 8

Marriott Rewards announced hotel reward category changes yesterday to take effect on April 8, 2014. The changes continue the trend of pushing far more hotels up to higher category levels than hotels coming down to a lower category. Last year’s changes were brutal and this year exacerbates the issue of Marriott Rewards free night certificates being far more limited in hotel choices at the category 4 and 5 hotel reward levels. 

Loyalty Lobby puts the count at 848 hotels going up in category and 233 hotels going down. I am not able to manipulate Marriott’s pdf file of changes and I don’t want to do a hand count, so my analysis in this post is based on Loyalty Lobby numbers.

An in-depth evaluation of category 4 and 5 hotels moving up is on my agenda. Marriott Rewards members holding free night certificates from MegaBonus and Marriott credit cards should look over the list of changes to see if there is a hotel to book before the reward category changes.

Here are some data points from the category reassignments that catch my attention.

The Big Picture:

The number of Category 9 hotels at 45,000 points per night more than doubles, increasing from 14 hotels worldwide to 30 hotels. Among the new category 9 properties is Courtyard Ocean City, Maryland, the first hotel in the Courtyard brand to reach the exalted heights of Marriott Rewards.

This hotel has $69 rates this week and next in March, but hikes up to $399 for dates in July and August. Certainly the beachfront location is the draw here.

Autograph Collection hotels moving up

Autograph Collection is a fast growing Marriott brand that signs independent hotels in popular tourist areas. These are urban and vacation destination properties. In three years the brand has grown to over 50 hotels.

Boscolo Palace Rome is the type of hotel experience that comes to my mind at category 9. This hotel is an Autograph Collection property and is one of four Autograph Collection hotels rising to the top tier category 9 of Marriott hotel rewards.

Autograph Collection as a brand is seeing a jump at most of its brand hotels.

The hotel brand reached its 50th hotel milestone just last November 2013. I count at least 35 Autograph Collection hotels on the list of hotels moving up in category.

Autograph Collection April 8, 2014 changes

  • Category 8 to 9 = 4 hotels.
  • Category 7 to 8 = 10 hotels.
  • Category 6 to 7 = 17 hotels.
  • Category 5 to 6 = 4 hotels.

That is nearly 70% of the hotels in the Autograph Collection brand moving up by one category, effective April 8, 2014.

Marriott Rewards 5 year cat changes

Marriott data in table is based on my own research and not directly from Marriott International. Each year since 2009, I have analyzed the Marriott Rewards hotel category reassignment changes.

Each table column shows the effect on Marriott Rewards hotel category distribution for hotel rewards. 2011 is shaded since that year shows only the effect of announced changes for 2011 compared to 2010 and does not have an accurate count of total hotels in Marriott. As you can see, the number of hotels has grown each year and the 2011 total hotels is not accurate, although the reward category shifts are accurate. In 2011, there were 351 hotels that went up and only 89 went down in reward category.

Observations for 2014 and the past five years

Marriott states 66% of hotels worldwide remain in categories 1-4 with the 2014 changes out of 4,047 hotels.

That is a significant drop in the proportion of hotels in Categories 1-4 since 2010.

Two years ago this number was 82% of all Marriott brand hotels worldwide (3,676 hotels) were in hotel reward categories 1-4.

Four years ago this number was 85% of all Marriott brand hotels worldwide (3,365 hotels) were in categories 1-4.

Overview of 2014 changes to Marriott Rewards Hotel Category Assignment

Categories 7, 8 and 9 see huge growth.

Category 9 grows from 14 to 30 hotels for 114% more hotels.

Category 8 grows from 55 to 114 hotels for 107% more hotels.

Category 7 grows from 110 hotels to 257 for 134% more hotels.

Category 6 drops by 4% from 368 to 352 hotels.

Category 5 sees 25% fewer hotels in 2014 with the April 8 changes. This is bad news since this drop is primarily due to hotels going to category 6.

  • 208 hotels move up to category 6 and only 2 hotels move down from category 6 to category 5.
  • 28 hotels go down from category 5 to 4 while 123 hotels move up from category 4 to category 5. For every category 5 hotel that goes down to category 4, four more category 4 hotels go up to category 5.
  • Net effect is a second year of massive devaluation to Marriott Rewards category 5 certificates earned from MegaBonus and Marriott Rewards credit card renewal with a loss of 208 hotels moving out of category 5 and no longer eligible for certificate redemptions.
  • Those 208 currently category 5 hotels moving to category 6 hotel rewards are replaced by 2 hotels moving into Cat 1-5 certificate redemption territory.
  • Hotel & Spa do Vinho, Rio Grande do Sol, Brazil (new cat 5)
  • Marriott San Jose, Costa Rica (new cat 5)

Category 4 has a net drop of 55 hotels. This 7% drop in hotels in category 4 appears to be less drastic than the category 5 changes, however, the numbers reveal a different story.

  • 123 hotels currently in category 4 move up to category 5.
  • Only 28 hotels drop from category 5 to 4. This means the net effect is nearly 100 hotels are removed from the category 4 free night certificate pool for category 1-4 hotel redemptions.
  • The good news is 40 hotels are moving down from category 4 reward level at 20,000 points to category 3 at 15,000 points. This is a 25% reduction in points for these 40 hotels.
  • The worse news is 80 hotels are moving from category 3 at 15,000 points to category 4 at 20,000 points. This is a 33% increase in nightly reward cost for twice as many hotels (80 hotels) going up to category 4 than dropping down from category 4 to 3 (40 hotels).
  • Category 1-4 hotel reward certificates see a devaluation with 95 fewer hotels (123 up, 28 down) available at the category 4 level compared to 2013. (I don’t count the hotels moving up to category 4 from category 3 since those were already available with cat 1-4 certificates.)

Category 3

The most significant change in category 3 is the drop of 125 hotels down to category 2. This reduces reward cost from 15,000 points to 10,000 points per night. Category 3 is the reward category with the largest number of hotels at 1,147 hotels for 28% of all Marriott brand hotels worldwide.

  • 80 hotels move up from category 3 to category 4.
  • 59 hotels move up from category 2 to category 3.
  • 125 hotels drop from category 3 to category 2.
  • 40 hotels drop from category 4 to category 3.

Category 3 is the highest category level where the number of hotels moving up is less than the number of hotels going down.

Category 2

  • 59 hotels move up from category 2 to category 3.
  • 42 hotels move up from category 1 to category 2.
  • 38 hotels drop from category 2 to category 1.
  • 125 hotels drop from category 3 to category 2.
  • Category 2 is the biggest recipient of new hotels with 125 category 3 hotels moving down to category 2.

Category 1

  • 42 hotels move to category 2 and 38 hotels drop to category 1 making a net loss of 4 hotels in category 1.

The Five Year Trend in Marriott Rewards Hotel Category Reassignment

Looking over the data of fives years in Marriott Rewards hotel category changes indicates to me that Marriott Rewards is now in a game of shifting hotels in categories 1-4 around between these low tier categories.

  • 2010 = 2,875 hotels in categories 1-4.
  • 2014 = 2,846 hotels in categories 1-4.

The more significant difference comes in categories 5-8.

  • 2010 = 490 hotels in categories 5-8.
  • 2014 = 1,203 hotels in categories 5-9.

Marriott added 684 hotels since 2010 to grow the hotel chain by 20%, yet during that time the number of hotels in the category 1-4 range actually dropped by 1% while the number of hotels in the upper tier categories 5-9 climbed by 143%.

I look at that and see Marriott Devaluation.

You can argue that hotel rates are higher than ever right now, but compared to 2007, hotel rates are not really that much higher. Globally and regionally the increases in room rates are less than 10% in most locations when looking at hotel rates in 2014 compared to 2007. The rate increases in hotel reward nights vastly outpaces the increase in room rates over the past seven years.

My final thoughts:

Marriott Rewards like many of the other hotel loyalty programs continue the march upward in hotel reward category assignment year after year. Unless earning points becomes easier through hotel stays, the value of points is reduced for hotel stay rewards at more desirable properties.

Hotel loyalty programs, like frequent flyer programs, have shifted much of their hotel loyalty programs to revolve around their cobranded credit card business. That leaves less value in points held by loyalty members who earn their points primarily from hotel stays. Printing billions of points earned from activities other than hotel stays results in annual adjustments to hotel rewards that reduces the value of hotel loyalty points.

Executives at many of the major hotel loyalty programs have said for several years they want to move away from points-based programs. Another five years like the last five years and most customers will likely have the same sentiment about the value of earning points for free hotel nights through hotel stays.

In the coming days I will take a closer look at the hotels in category 4 and 5 rewards for suggestions on places to redeem your certificates by April 7, 2014.

Sources:

Loyalty Traveler: http://loyaltytraveler.boardingarea.com/2013/02/13/marriott-rewards-may-16-2013-hotel-category-reassignment-an-overview/#sthash.BpaTgvJb.enMOof3g.dpbs

Marriott Rewards Insiders thread on 2014 hotel category changes

New hotel categories are effective beginning April 8, 2014. In the meantime, we have compiled a full list of changes to hotel categories.  The Marriott Rewards categories remain 1 to 9 and the points values required for each category are not changing.

How many hotels are affected?

73% of the properties remain unchanged
66% of the programs properties will remain in Categories 1-4

27% of the hotels are changing; of these 22% are decreasing by one category and 78% are increasing by one category

Is my existing redemption reservation impacted?

All redemption reservations booked on or before April 7, 2014 for stays beginning April 8, 2014, will be honored at the point price booked. If you have not ordered your certificate prior to April 8, 2014, call Guest Services to request the lower priced certificate before your stay.

How long can I book a redemption stay using the current hotel categories?

You may book redemption reservations up to 50 weeks in advance of your stay, even before having the required points in your account. For example, on April 1, 2014 you may book your redemption stay as far out as March 15, 2015.

*****

Ric Garrido of Monterey, California is writer and owner of Loyalty Traveler.

Loyalty Traveler shares news and views on hotels, hotel loyalty programs and vacation destinations for frequent guests.

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About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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Comments

  1. Would seem bad at first blush, but certainly nothing like your panic-inducing rumor mill post from a few days ago.

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