The State of Marriott Travel Packages & Strategy Moving Forward

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We have been watching the merger of Starwood Preferred Guest and Marriott unfold for a long time now. The next big phase, the combining of their separate reward programs, will happen in August, and Marriott recently made a bunch of announcements that I began to break down Friday.

• Marriott Award Category Assignments & Strategy Moving Forward
• The State of Marriott Travel Packages & Strategy Moving Forward (this post)

Today, I’ll dive into the second half of the news, regarding the fate of Marriott Travel Packages.

Here’s a brief history of the Marriott & SPG merger.

• First we learned how these changes will affect both SPG and Marriott members in regards to the new elite status qualifications and benefits, how earning points from hotel stays will change, and what redeeming points for hotel stays will look like in the future in What August 2018 Holds For Marriott/SPG: Part I
• Then we took a look at how earning points through credit card spend would change, the new Marriott credit cards, and how redeeming points as airline miles would look in the future in What August 2018 Holds For Marriott/SPG: Part II
• In Book Top Tier SPG Properties Between August & December 2018 we explored the huge window of opportunity this fall and winter will present for booking current Category 7 SPG hotels for massive (10k to 15k SPG point) discounts
• On Friday, I covered the new Marriott category assignments, how the new unified program’s prices compare to the old, and strategies to employ now/in August to make the most of it.

Marriott Travel Packages

Put simply, Marriott Travel Packages will suffer a devaluation in August.  If you have been looking at booking one, do so as soon as possible, and definitely before August.

The Old

Here a few important reminders about how Marriott’s Hotel + Air Packages currently work.

• You are exchanging Marriott Rewards for seven nights in varying category levels of Marriott hotels + varying amounts of airline miles, depending on which package you choose.
• You do not have to redeem the 7 night hotel certificate at the same time as the airline miles. Once you buy the package, the hotel certificate lasts a year, although Marriott is known for extending the expiration date if you call. The airline miles are deposited into the appropriate frequent flyer account and then become subject to that programs’ rules and expiration dates.
• You can upgrade a Travel Package to a higher category of hotels later by paying the difference in Marriott Rewards required.
• 20k SPG point = 60k Marriott Rewards = 25k airline miles (this is not directly related to travel packages but key to remember when valuing them)
• You get the fifth night free on Marriott Rewards stays, so a seven night stay booked with points would require only enough points for six award nights (this is also not directly related to travel packages but key to remember when valuing them)

The last three bullets should not change come August, except of course that all SPG points will be converted to Marriott Rewards 1 to 3.

Marriott Travel Packages are currently broken down in five types, depending on which airline you want miles with.

The best deals of the current Travel Packages are typically trading in 270k Marriott Rewards for 120k miles and seven nights in a Category 1 – 5 hotel in Package 1…

…or trading in 270k Marriott Rewards for 132k United miles and seven nights in a Category 1 – 5 hotel in the RewardsPlus package.

Depending on your specific situation, there is value to be had in other hotel categories/mile amounts/package types. But since these are two of the best value and most popular deals now, I will compare them specifically to the new Travel Packages.

The New

As of August, the unified SPG/Marriott/Ritz-Carlton program will have a single pricing chart for buying packages with all airline mileage partners. This simplification is perhaps the only silver lining of the changes.

Marriott is maintaining their relationship with United, which means you get 10% more miles by purchasing a United Travel Package (either 7 Nights + 55k United miles, or 7 Nights + 110k United miles). You’ll also be able to trade in Marriott points for United miles at these continued rates.

Old VS. New

You can’t exactly compare the old and new charts completely outright, as the whole rewards program is changing come August with SPG hotels being added to the portfolio and a new categorization system. But what is pretty comparable at least is the Category 1 – 5 tier of the old Travel Packages to the Category 1 – 4 tier of the new packages, since Category 5 on the current Marriott chart costs 25k a night and Category 4 on the new chart also costs 25k a night.

First of all, there will be no more 120k mile (or in United’s case, 132k mile) packages. There will also be no more option to buy a Travel Package with JetBlue TrueBlue points.

The most you’ll be able to get is 100k of the majority of miles and 110k United miles, and you’ll be paying quite a lot more Marriott Rewards for them: at least 330k versus the 250k needed before for a 100k (or 110k United) miles. That’s 80k more Marriott Rewards, or ~27k more SPG points if your brain thinks that way. Ouch.

I don’t see any examples where it’s a better idea to book a Travel Package in August as opposed to now. They are all getting more expensive.

Will any of the packages on the new chart ever be a good deal?

I concur with Frequent Miler that there are two perspectives to look at this from. That of someone who does place value on the hotel certificate, who would book a seven night stay anyways, and that of someone who just wants to turn their Marriott Rewards into airline miles.

As for those that would book a seven night stay anyways…

I determined whether a Travel Package was a “deal” or not by calculating the amount of points it would cost (at Standard pricing*) to book the hotel outside of a Travel Package, subtracted that amount from the cost of the Travel Package to get the amount of Marriott Rewards you are essentially trading for the amount of airline miles, and then converted that leftover amount of Marriott Rewards to airline miles at the rate it would normally convert (3 to 1) with bonuses of 5k airline miles for every 60k increment. Doing so will tell you whether you’re better off redeeming Marriott Rewards for hotel award nights and converting Marriott Rewards to airline loyalty programs separately or better off buying a Travel Package.

And yes, there are certainly instances on the new chart that represent a deal in this sense. That would be pretty preposterous if there weren’t. They’re not nearly as good a deal as the current packages in comparison–and I want to emphasize that you should at least buy your packages before August–but yes, there will be times when it will be worth it to book a package versus booking awards/transferring points to miles separately under the new pricing scheme.

I’ll run you through an example with actual numbers: The seven nights in a Category 1 – 4 + 100,000 miles package that will cost 330k Marriott Rewards.

1. A Category 4 on the new chart will cost 25k points per night. You will continue to get the fifth night free on award bookings, so a seven night stay would run you 150k Marriott Rewards (6 x 25k).
2.  330k points, the cost of the package, less 150k points, what it would cost to book award nights, is 180k points.
3. 180k Marriott points will be exchangeable for 75k airline miles, so that’s a deal since 100k miles is better than 75k miles.

I ran the numbers for all the various packages. The ones that are deals–when you get more miles redeeming for a Travel Package as opposed to separate transactions–are in bold.

Here is a separate chart for United RewardsPlus Packages. Those that are deals are also listed in bold.

Nearly half the time it is worth it to book the package instead of booking award nights and transferring points to airline miles separately.

To circle back, the other perspective we haven’t gone over yet is that of a person who doesn’t care about the hotel certificate portion of the travel package. They just want to convert their Marriott points into airline miles and the hotel certificate for seven nights is a bonus. 

So will there be an instance when one who only cares about the miles should buy a Travel Package? Either because they get more miles + a bunch of free hotel nights or they at least get the same amount of miles + a bunch of free hotel nights? Well… there are circumstances NOW where that is the case. Like if buying a United Package, Package 1, or Package 3 (seven nights in a Category 1 – 5, the 270k point price level). But there will not be come August.

If you find yourself with this perspective, as of August, you will always get more miles for your points by transferring directly from Marriott to airline loyalty partners.

*Note that this section is based on the assumption of Standard award pricing which only lasts through 2018. If the hotel nights you want to book with a travel package would otherwise fall victim to Peak Pricing which we won’t know anything about until 2019), then a travel package could turn into a much better deal as you’d effectively be paying less Marriott Rewards for the miles you’re getting as the hotels would cost many more points to book. Alternatively, if the hotel nights you want to book end up falling under Off-Peak pricing, that would make the Travel Package a worse deal.

Travel Package Strategy

If you are interested in a Marriott Travel Package, book it before August. You will pay less points for the seven night certificate and get more airline miles.

However I would wait out booking the hotel, not necessarily until August, but until we hear more from Marriott. We don’t know what’s going to happen to existing but unbooked Travel Package hotel certificates next month. It’s likely they will announce what they’re going to do with what are being called the “floater certificates” soon, and you can make a better decision as to whether to book now or wait until August based on how they will be treated in August. Maybe they’ll turn the certificates back into Marriott Rewards, at a favorable rate (which would be a huge win if you don’t care about the hotel certificate part and that was just a bonus for buying airline miles). Or maybe not. Maybe they’ll turn your certificate into a certificate redeemable at even better properties. Or maybe not.

If we don’t hear any more news from Marriott regarding “floater” certificates before August 1, then if you know which hotel you want and the award price of your desired hotel is shooting up in August, go ahead and book. If you didn’t care about the hotel certificate part of the package to begin with, or are willing to roll the dice in hopes of a win, then I would wait until August to see what happens.

If you want more SPG/Marriott points to buy a Marriott Travel Package before they change in August, the best way is to buy SPG points with a 35% discount through July 20. Read details about the sale here. If you’re close to having enough SPG and/or Marriott Rewards to buy a current Travel Package, I would seriously consider buying more SPG points to be able to do so. There are some amazing deals to be had on the current charts, and that’s going away in August.

There are Chase Marriott Rewards Credit Cards you could open with big bonuses, but I don’t think at this point you’d get the bonus points in time to put them towards a Travel Package before the changes kick in.

Bottom Line

The Glory days of Marriott Travel Packages are ending. There will be instances when the new Travel Package prices effective as of August will be a better deal than booking Marriott award nights and transferring Marriott points to airline miles as independent actions, and I’ve outlined them in the charts above. Sadly there will not be any incentive to buy Travel Packages if all you really care about is airline miles, but I guess that shouldn’t surprise us too much. To me it’s pretty clear they are trying to nudge out customers who are in the program for the airline mile side of things and focus on rewarding those that patron their hotels. I guess that makes sense, but they’re also hurting their customers that like both sides of the program.

The biggest take-away from this post should be the following: BOOK MARRIOTT TRAVEL PACKAGES BEFORE AUGUST. Whether you actually book your hotel before August will depend on various factors.

I had planned on going over the new Cash + Points Pricing coming in August as well, but I think what’s included is enough for today. I’ll hit on it another time.