In Stepping Stones post, Re: New Offer From the Marriott Rewards Premier Credit Card, he laments the loss of 7 nights at Category 7 for 150K points. With 'sticker shock' a reality, it compels me to ask, What will it take to make Marriott 1st in Award Redemption? I ask this because I lament that Hilton placed 1st in Award Redemption at the Freddie Awards.
"Sticker shock" and "Point Inflation" and "Devaluation of Points" fall into the same bucket. Among the leading contributors to inflation is the cost of power, labor and taxes. When we redeem for points, we all know that room tax is covered. For example, assuming a one night mid-week stay, checking in Tuesday, July 7th:
The point (pardon the pun) is, when we redeem these rooms, Marriott still has to pay the government taxes. By covering the taxes, Marriott has actually made award redemption easier and affordable. Yet, no one to date - that I am aware of here at Insiders - has gone under the hood to look at the impact of taxes on Marriott award redemption.
What if Marriott reduced the points required to redeem and the guest was liable for paying the taxes? What impact would that have? OMG, can you hear the whining? How does Hilton or Starwood deal with this?
In one of Stepping's posts, he aptly quotes a comment that "Marriott Rewards is an enterprise within an enterprise." Based upon the 14+ page newsletter we just received by mail, it must be very expensive to operate Marriott Rewards day-to-day. The postage alone must be staggering. What about the Platinum Elite line? Who said, "You get what you pay for". A high quality program like Marriott Rewards does not come cheap, why should a hotel room?
What will it take to make Marriott 1st in Award Redemption? What do we want to see happen?
In 1987 I purchased Marriott Vacation Ownership. I was given the opportunity to exchange each one week of that time for 110,000 Marriott Reward Points.
In 1987 Gas cost 85 cents a gallon. Today it costs $2.60.That is a mark up of about x 3. I know a direct correlation between gas and vacations cannot be drawn, but as a very rough guide Marriott should now be giving me 330,000 points per week exchanged!
My timeshare week now rents for Euro 1844 per week.UnfortunatelyI do not know the 1986 rental values of my ownership, or, say, a room at the Marriott World Centre hotel in Orlando to make a sensible inflationary increase of the current value of yesterday's 110K points.
I have arranged 6 nights accomodation at Marriott's Druids Glen hotel in Ireland in July. This is costing me 105,000 points (pre Jan2009 increase rate) This 105K points is practically what I get for my timeshare - 110K points (for 7 nights)
The advance rental price of Druids Glen is Euro 100, that is Euro 600 for the 6 nights that I have a reservation for.
This is only one third of my traded rental value for points. Euro 1844/Euro600.Also to obtain my 110K Reward points I also have to pay an Admin Fee of Euro 73.
So that is a total of Euro 1917 given up for an award valued at Euro 600. (This again suggests that 110K traded Reward Points should be increased to 330K points.)
When making an award stay at Marriott hotels no meals are included. ( Incidenetally to answer another question - I have never had to pay tax for an award stay)
Now comes the crunch: Marriott has a special promotion for my hotel of choice:
HOTEL SPECIALS: DUBLIN From 1st July to 1st October 2009, stay Thursday-Sunday (Friday or Saturday required) and for only €199 per night, you'll receive:
- Two interconnecting rooms (deluxe king room interconnecting with a deluxe room with 2 double beds)
- Breakfast for 2 adults and 2 children
OK, so the extra room only saves one Euro, but 4 breakfasts must be worth Euro 76 in anyone's money ( especially in expensive Ireland)
So my award room value is: One room at Euro 100 less breakfast cost Euro 76 = Euro 24.
Therefore my exchange gives me Euro 24 x 6nights = Euro 144. for an exchanged rental value of Euro 1917.
A REALLY BUM DEAL.
So to directly answer your question, for me to vote for Marriott as the best reward programme in the FREDDIE'S, Marriott would have to increase my exchanged points from 110K to maybe 330K. That of course is unrealistic as they are now 'rented' by Marriott for points at 180K.
So that 180K is the timeshare exchange figure that they must aim for to ensure my Freddie vote!
"So that 180K is the timeshare exchange figure that they must aim for to ensure my Freddie vote!"
Well said. As stated earlier under the "Lakeshore" post, Marriott Vacation Club and Marriott Rewards have not mastered the aspect of "Fair Value Exchange".
After sitting through the sales presentation on the Enclaves at Shadow Ridge, there is a HUGE disconnect when a referring owner gets 100,000 points when the referral purchases, and the owner who just purchased a Gold week gets 75,000 points when electing to trade for points.
At the prices these units are going for and the prices that our villas now command plus the annual maintenance fees, Fair Value Exchange when trading for points should come close to if not match the 180,000 points as you aptly suggest.
When we were in Palm Desert, we learned that there are at least two owners, both of whom are women that are legendary. For what its worth, they independently own 52 weeks of Marriott timeshare! When the average multiple week owner owns 4 weeks, 52 weeks is quite remarkable.
Every January, can you imagine? If they traded all 52 weeks for points at an average of 100K per week, that's over 5 million points!