The Wall Street Journal (subscription required) reports that Marriott, along with other major hoteliers has seen an uptick in points redemption for merchandise:
"Marriott, which manages more than 3,200 hotels globally, logged a 14% increase in the number of points redeemed for merchandise in November in comparison to the same month last year. Marriott's most popular items include Dyson vacuum cleaners, Nintendo Wii video game consoles, iPods, laptop computers and flat-panel televisions."
This maneuver reduces the outstanding points balances in the pool of Rewards Members but many are still earning points. This year, the article says, Marriott has reserved over 1.5 billion dollars for those points, to be paid to hotels for reward stays. An interesting trend and one to watch.
I would guess that the benefits to Marriott are more than in rooms redemption.
What is so ironic about the trend is the carbon footprint it leaves behind. Assuming it cost $30 million to print 30 million MR merchandising catalogs and another $15 million in addressing labels and bulk mail postage, that's a staggering number of trees.
While I am certain that the merchandisers pay a tidy sum to have their goods in a MR catalog, Marriott could send a postcard pointing to a URL with the same content in a digital format and shift the business model online.
Members would still perceive the benefit, while reducing costs and the carbon footprint. Member opt-in/opt-out would also improve targeting.
Postscript 3/22: Redeeming MR points for merchandise doesn't help Marriott hotels struggling with low occupancy who are in danger of missing debt service payments, face increased turnover and increased guest dissatisfaction because of the declining service.
Why not Loyalty Buys Elite Status? As Hilton has done, why not recognize redeemed nights as Elite Qualifying Bonus Nights? Promoted correctly with No Blackout Nights and Elite Rollover Nights, point redemption for free room stays can boost occupancy and incremental spend on other services.
Just a thought.