Points Inflation
 

Hi!,

I stay in Marriott properties an average of 80-100 nights/year. It obviously generates a good deal of points.

Lately, I am finding these new dynamic redemption rates ridiculous. The rates for London hotels have moved over the past year from 30,000 points/night to 100,000. Seriously? The devaluation is excessive. A year's worth of points, won't even buy a weekend in London.

Which properties are you referring to? I just searched for this weekend and the vast majority of properties are available for under 100,000 a night, and there are multiple properties that are 100,000 or less for the entire weekend.

For a random January weekend, there are several properties available for 30-40k a night. Even the Edition is 85k a night. It seems perhaps you may just be looking at a bad weekend.

Checking a random date 2 weeks out 10/15-10/16 I see:

Sheraton Grand London Park Lane 69k
London Marriott Hotel Grosvenor Square 71K
The Park Tower Knightsbridge, a Luxury Collection Hotel 67k
St. Pancras Renaissance Hotel 72k
London Marriott Hotel Regents Park 46k

Yes, some of these have gone up. They are all reasonable FS properties at much less than 100k a night.

Yes we are all getting bonvoy'ed. I struggle to find availability to get the "reasonable or expected value" out of the points. It is leading me to make other decisions regarding my loyalty and initiate a long term divorce from Bonvoy. (Approaching the end of the tunnel known as lifetime plat is a major factor)

But resistance is futile. All roads lead to the balance sheet and the outstanding points balance is too juicy of a liability to not write down. The grass might be greener, but their own devaluations are inevitable.

And yet, the thread immediate before this one shows insane value
https://www.flyertalk.com/forum/marr...-marriott.html

As long as there are award programs, there have been and will continue to be some people claiming they cannot get any value out of them, some getting astronomical value out of them, and some (most of us?) who find a good value using points some times and not others.

Exactly, you'll find these same discussions on the Hilton, IHG, and each of several airline forums.

Hyatt has been a bit more stable lately (but this is not to start yet another "Hyatt is the best program if the limited footprint works for you" discussion).

My response to this is to earn-and-burn, not building up more than 100k-200k in each program. Diversification also helps. For two recent trips, there weren't any decent Bonvoy redemptions to be made. Instead, I found nice SLH properties at attractive Hilton points rates.
I don't throw Marriott the majority of my business, but am also opportunistic and consider multiple chains when booking cash stays.

That's just how it goes these days, unfortunately. Using points to stay at desirable locations and properties for good value is practically a unicorn these days. There are exceptions, but more and more I find myself preferring to pay cash for the hotel and transfer my Marriott points to non-US airlines for business class international airfare. Example: 240,000 MR points gets me a ~$5k business class seat. It's hard to beat that value by redeeming at desirable Marriott properties.

Yes hurricane price fixing is a great every day data point. I would really like to look at the back of the door to see if that price is over the "Maximum Room Rate" on the door. My gut says no, but given that it's augusta, maybe they have it astronomical for Master's week.

Getting a Marriott on points within 20 miles of Taylor Swift concert or most scheduled events is ugly.

I find it fascinating that people here are both surprised and appalled that redemption prices have gone up. Cash prices have gone up, too, so we're earning more points on paid stays. And are there a lot of industries in which prices haven't gone up over the past few years?

Obviously, a lot depends on where you're staying. Personally, I prefer LC and StR properties, and I rarely stay in the U.S. I think that StR Doha is a bargain. Just checked a random night for this coming January. Cash rate of USD $310, bonvoy redemption at 40,000. It's a magnificent property, with both hard and soft products superb. Others are not such bargains, I'm thinking of StR Rome, where I was for a week in July. But, yes, prices have gone up and undoubtedly will continue to do so. No surprise there.

I know that others will disagree with me and have different perspectives. That's OK, there is no objectively correct view. Like the umpire, I call what I see. Someone else will call it differently.

It is reasonable to expect points prices to increase as cash prices have jumped. It maintains some level of equivalence and also yes those higher cash prices are also putting more points into the system.

But it is certainly much more of a game now. Last week I booked one night somewhere for 22k points. The following night it would have been 46k points, even though the cash price was only around 10% higher.

It has become more work but for as long as points don't have a fixed cash equivalent value, there are still opportunities to leverage dynamic pricing in our favour.

All of my upcoming points bookings in Bucharest and Venice are more than 1 CPP.

No, but the thing is that redemption price growth has outpaced general inflation in some cases (hello, IHG!). In other cases, the earn proposition has deteriorated tremendously. Some industry insiders suggest that the move to redemption based award mileage earning decreased point issuance by three-quarters! That's huge, effectively meaning a quadrupling of award prices.

Marriott hasn't been the worst offender in this game but they've certainly managed to reign in on opportunities providing outsized value.

I think a lot of this is driven not by adjusting the earn-and-burn proposition along with general inflation. Instead, it is driven by miles and points sales being hugely profitable. So hotel chains and airlines sell a ton of miles. But redemptions are supposed to be primarily for rooms (or seats, respectively) that would otherwise have remained empty, with both rooms and seats being perishable goods. Burn rates for aspirational redemptions have gone through the roof in trying to ensure that the highly profitable miles/points sale business does not cannibalize the traditional sale of cash tickets/rooms.

In other words, those miles/points sales through credit cards and such jack up the nominal outstanding miles/points liabilities. With much less growth in award seat/award room inventory, the redemption price must adjust for the market to clear.

I don't have a problem with any of this. They're running a business. These programs don't exist primarily to provide us with free rooms/flights. They exist to make money for the companies. Look at airline mile redemptions. It's much harder and more expensive to redeem miles now because cash load factors are much higher. If you're in QRPC, you know that it's harder than ever to get seats at the regular redemption rates, you have to use the ×2 rate much more often. Cash airfares are much more expensive, too, rising faster than inflation.

Aspirational redemptions? I don't expect them to be cheap, or even reasonable. They're aspirational. Same as cash prices for the The Apartment on EY.

It's a demand/supply market. Airlines and hotels use their prices (among other things) to manage demand. Sure, they could fill their seats/rooms immediately by cutting their prices in half tomorrow morning. But that's not their goal. They try to find a balance. If their prices go up too much, that will reduce demand to an unacceptable level. And I'm sure that all of the major hotel chains and airlines have banks of MBAs modeling this stuff and figuring out the optimal pricing, both cash and redemption.

I have an upcoming booking in January at a 2.5 cpp rate - there are good redemptions out there. Even some of the London redemptions can be o.k., depending on current cash prices

It is no worse a data point than the OPs chosen date where, allegedly, all of the hotels in London are 100k points per night (including ones that were allegedly 30k per night last year).