Betting again on top value Marriott travel packages. Analysis of the “no upgrades/downgrades” rule.

As Nick reported a few hours ago, Starwood Lurker IV, via Flyertalk, revealed new information about Marriott Travel Packages:

  • Travel packages set to expire during the booking blackout period (you can not book unattached old Travel Packages certificates between August 18-September 18) can be extended upon request
  • Members will still be able to cancel unused 7-night certificates and get points back at a reduced amount.
  • After 8/18, certificates cannot be upgraded or downgraded, regardless of when they were purchased.
  • Between 8/18 and 9/18, you can cancel a Travel Package reservation, but you will not be able to rebook until after 9/18.

If we believe Starwood Lurker IV, then we now know that Marriott Travel Packages purchased today are like a box of chocolates: You never know what you’re gonna get, and you can’t trade in what you get for something else (i.e. you can’t upgrade or downgrade your package in the new program)

On the surface, this appears to void the logic in my post: A case for gambling on top tier travel packages.  After all, that post was based entirely on the following postulate:

  • It will be possible to upgrade and downgrade certificates (as of September 18th) and you will pay or get back the difference in price between categories based on new pricing.

That said, there is a bit of good news in the latest Lurker info leak:

Members will still be able to cancel unused 7-night certificates and get points back at a reduced amount.

While we don’t know for certain what that “reduced amount” means, I think it is a safe bet that certificate cancellations will work in the same general way as they do today.  Today, certificate cancellations work like this:

  • If you cancel a category 1-5 certificate, you get back 45,000 points (I believe this is what they mean by a “reduced amount”).
  • If you cancel a higher level certificate, you get back 45,000 points plus the difference in price between that travel package and a category 1-5 package.

In other words, with today’s packages, if your goal is simply to exchange points for airline miles at a favorable rate, it doesn’t matter what package you buy.  If you cancel the certificate, your final out of pocket cost will be the same.

Stated another way, if you buy a 7 night travel package today and then cancel the stay certificate (under today’s rules), your final cost for the miles received will be 270K – 45K = 225,000 points (or 75K Starpoints).  This is a fantastic transfer ratio.

How will cancellations of current certificates work in the new program?

There are two likely scenarios:

  1. Old residual value: Regardless of how Marriott maps old to new categories, you’ll get back the same number of points as you would today.
  2. New residual value: After your existing certificate is converted to a new category in the merged program, cancelling the certificate will give you back the same number of points as if you had bought the new travel package and cancelled it.

Personally, I think that option 1 is far more likely, but let’s look at each…

Old Residual Value: You can’t go wrong if your goal is to buy miles cheaply

The above table shows the pre-merger travel package prices, the per night value of each package (e.g. how many points that category hotel currently costs), the refund amount if you cancel the stay certificate, and the final out of pocket price if you cancel the stay certificate.  The chart clearly shows that if your goal is simply to buy miles at a very low rate, it doesn’t matter which package category you buy.  The final price will be the same.

So…

If cancellations are worth the same in the new program (i.e. the likely “old residual value” hypothesis), and if your main goal is to buy miles cheaply, then you can’t go wrong with any package.

Old Residual Value: What if you want to stay at Marriott/SPG properties?

Suppose Marriott maps your current stay certificate to a category that you’re unhappy with.  What options will you have if you really want a long stay at a Marriott or SPG hotel?  One option will be to cancel the stay certificate to get points back and then use those points for a regular award stay.

This chart is similar to the one above, but shows how many 60K nights you can afford with your refunded points.  The reason I picked 60K is that 60K will be the most expensive rate between this weekend and “early 2019”.  So, during that time, it should be possible to book the most expensive hotels in the Marriott / SPG portfolio for 60K points per night.

At the lowest category, you won’t get enough back to stay even one night at a 60K property.  With a Ritz Tier 4-5 package, though, you’ll get back more than enough for 6 nights.  How did I get to 6 nights when the chart says 5.3?  Thanks to Marriott’s 5th Night Free awards, the first five nights cost the same as four nights, so you’d still have enough to add on a sixth night, and you’d still have some left over.

It’s important to note that the math actually works out the same whether you start with 540,000 points and buy a Ritz Tier 4-5 Package or buy a category 1-5 package and hold onto the left over 270K points.  Either way, you would have 315,000 points in your account after cancelling your package and you can then use those points to book up to 6 nights at a 60K hotel.

In other words, as with the first scenario, in this one you can’t go wrong as long as you keep enough points in your account to cover the difference between the cancellation value and the cost of the stay you want.

New Residual Value: Greg’s Best Guess

What if cancellation point values are based on new residual value?  I described this scenario, above, as follows:

After your existing certificate is converted to a new category in the merged program, cancelling the certificate will give you back the same number of points as if you had bought the new travel package and cancelled it.

I think that this scenario is far less likely than the “old residual value” scenario, but let’s play this out…

We’ll start with the following hypotheses:

  • If you cancel a category 1-4 certificate, you get back 45,000 points (It’s possible that the new bottom cash-out value will be more than this, but I doubt it will be less)
  • If you cancel a higher level certificate, you get back 45,000 points plus the difference in price between that travel package and a category 1-4 package based on new pricing.

Now let’s look at how this all plays out with my best guess mapping of old categories to new:

The above chart shows my best guess of how old categories will map to new.  It also shows the refund amounts you may get in the unlikely scenario that refunds are based on new package prices and if the base refund stays at 45K.  Finally, the two columns on the right show:

  • Apply refund to 60K nights: This shows how many 60K nights you could get from the refund.  Keep in mind that 4 nights really means 5 thanks to 5th Night Free awards.  New category 6, would get you very close to 4 nights, so that really means that it would get you close to 5 nights at a top tier property.  Ignore the category 7 row because if you really wanted a 60K per night property, you might as well not cancel the certificate but rather use it as intended.  The really interesting row is on the bottom.  Cancelling a new category 8 certificate would give you almost enough points for 8 60K nights (you’d only be 15K points short of 8 nights).  If you book those as two separate 5th Night Free awards, then you would get 10 nights out of your 7 night certificate!
  • Final price for 120K miles: If you don’t care about the hotel stay, then this column shows you how many Marriott points you paid for 120K airline miles (or 132K United miles).  As you go to higher and higher categories, the value gets better and better.  The best overall is where cancelling a category 8 certificate would leave you with a final out of pocket cost of 75,000 Marriott points (25K Starpoints) for 120K airline miles (or 132K United miles)!

Based on my best guess category mapping and the scenario where cancellation values are based on new travel package pricing, buying a Ritz Tier 4-5 package today (if you have enough points) would result in a huge win whether you want to stay in top tier hotels or simply want to buy miles for less.

Next I’ll look at different category mapping scenarios…

New Residual Value: Map based on peak pricing (worst case scenario)

If Marriott maps old to new based on new peak pricing (and there’s a good argument that they might), they might map Ritz 4-5 to new category 7.  I consider this the worst case scenario.  Here’s what it looks like if you cancel your resulting package:

With this worst case scenario, things look far less rosy:

  • Apply refund to 60K nights: In this scenario, you have to go up to Ritz Tier 1-3 to get close to 4 nights (5 nights with 5th Night free Awards).  Ritz Tier 4-5, though, results in a category 7 certificate which will be good for 7 nights in a standard 60K per night property until early 2019 when they introduce category 8 and peak pricing.
  • Final price for 120K miles: If you don’t care about the hotel stay, Ritz Tier 1-3 is the only option that may save you points over the base category 1-5 package (a 30K savings).  Most other packages cost you 30K more than the base package.  But, category 9 in this scenario is the worst: it would cost you 60K more points.  (Note though that it is distinctly possible that if this category mapping happens, Marriott may refund the difference in points you paid between category 9 and category 8 or category 7 to make up for the reduced value of your certificate).

Based on this worst case scenario, Ritz Tier 4-5 is still the best bet if you want to book a 60K property.  As long as you don’t cancel your certificate, it should be usable for 7 nights at any property in the world until category 8 and peak pricing is introduced in 2019.  If you primarily value the miles, then the Ritz Tier 4-5 package isn’t your best bet.  You could hedge your bets with a Ritz Tier 1-3 (which does best in this worst case category mapping, and second best in my best guess category mapping).

New Residual Value: Map N to N-1

Another theory of how Marriott may map old to new categories is to drop down the category number by 1.  This makes sense since old category 5 maps perfectly to new category 4 (based on standard pricing, not peak pricing).

Let’s look at how this plays out:

  • Apply refund to 60K nights: Old category 8 maps to new category 7 which can be used to book 7 60K nights if you don’t cancel the certificate.  Even better, old category 9 maps to new category 8 which, when cancelled results in nearly enough points for two 5th Night Free awards!
  • Final price for 120K miles: This option gets ridiculous.  If you buy and then cancel an old category 9 (new category 8), you would then have more points than you started with.

Old category 9 is a huge winner in this scenario.  It’s also possible that the Ritz packages would be huge winners if Marriott decides to refund the original point difference between the Ritz packages and category 9 (since all result in the same new category in this scenario).

New Residual Value: Map N to N

Another theory of how Marriott may map old to new categories is to map by name.  Old category 6 becomes new category 6.  This seems crazily optimistic to me, but let’s look at it anyway:

  • Apply refund to 60K nights: Old category 7 maps to new category 7 which can be used to book 7 60K nights if you don’t cancel the certificate.  Even better, old category 8 maps to new category 8 which, when cancelled results in nearly enough points for two 5th Night Free awards!
  • Final price for 120K miles: This option is super-ridiculous.  If you buy and then cancel a category 8, you would then have many more points than you started with.

Category 8 is a huge winner in this scenario.  It’s also possible that the category 9 and  Ritz packages would be huge winners if Marriott decides to refund the original point difference between the higher level packages and category 8 (since all result in the same new category in this scenario).

Summary

The inability to upgrade or downgrade packages in the new program is unfortunate, but there may still be huge wins thanks to the promised ability to cancel stay certificates.

In the analysis above, I noted two key cancellation scenarios:

  1. Old residual value: Regardless of how Marriott maps old to new categories, you’ll get back the same number of points as you would today.  I think that this is 95% likely.
  2. New residual value: After your existing certificate is converted to a new category in the merged program, cancelling the certificate will give you back the same number of points as if you had bought the new travel package and cancelled it.

And I showed that with the old residual value you can’t go wrong with any level package.  As long as you bought a package resulting in 120K airline miles (or 132K United miles), and if you end up cancelling your certificate, you will have bought those miles for only 225K points (75K Starpoints).  That’s a phenomenal value.

With the far less likely residual value scenario, I looked at different theories as to how they may map old categories to new, and I came up with these “winners”:

  • Greg’s Best Guess Mapping: Ritz Tier 4-5 packages result in a big win
  • Peak Price Mapping (Worst Case Scenario): Ritz Tier 4-5 is the best bet for a top tier 7 night stay.  Ritz Tier 1-3 is a better bet if you plan to cancel for points back.
  • Map N to N-1: Category 9 is the huge winner here.
  • Map N to N: Category 8 is the huge winner.

The “make us whole” hypothesis: Regardless of how Marriott maps old to new categories, it’s possible that they’ll “make us whole” when multiple old categories map to a single new category (which happens in every scenario since there are fewer new categories).  By this I mean that they would refund the difference in original price between the package you bought and the cheaper package that resulted in the same new category.  If this happens, then Ritz Tier 4-5 is always the best bet across the board.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

More articles by Greg The Frequent Miler »

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Lukas
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Lukas

Do you remember how many points you get for canceling a 5-night certificate, two of which I managed to secure this morning?

fll
Guest
fll

If it is a Cat 5 old chart, it is 10K on 5 nights and 45K on 7 nights.

If your account is being audit, Marriott would lock your account pending review, then the certs being revoked and residual pts refunded. it has reported on the net, reddit and non English sites.
If your account has enough pts left Marriott would revoke the 5 nights and replace it with 7 nights by taking the needed 35K additional pts.
It has reported on FT related thread 2 or more weeks ago as well as on Reddit.

Lukas
Guest
Lukas

Thank you!

Jan
Guest
Jan

Im confused. I have a Cat 6 unattached. Does it seem like I will have 7 nights at new Category 5 or 4 or neither?

Matt
Guest
Matt

I’m in the same exact boat.. Not sure if I should upgrade to category 7 to be more certain it maps to new category 5.

fll
Guest
fll

We do NOT know. I detached a Cat 6 due to hotel is going down to 25K/night when my booking was made on June 1st, 2 weeks before Marriott announced the new charts.

Instead of the potential hassles to get my overpaid 30K back I just detached the Cat 6 cert and let it ride. I have 2 unattached Cat 5 certs that I can use one to book the same property that is now a 25K/night. I would just wait till the dust settled after Sept 18 to decide what to do, as in the same city there is another property also came down in pts, but from 40K to 35K.

So if old Cat 6 is converted to new Cat 5, I can use that to book a different property.

Lucy
Guest
Lucy

I’m in the same boat. Have a CAT 6 unattached with no specific travel plans. Trying to decide whether to just let it ride or whether to upgrade (have enough points left to upgrade to a CAT 7 or 8). Would really like to use the nights to stay in a new CAT 5 or 6 hotel next summer.

Matt
Guest
Matt

Still so conflicted on what to do with mine. I have a cat 6 cert right now and the properties that I am considering are all going down in price to 35k/night. I have the points to upgrade to category 7 but don’t want to waste them if my cert lets me book up to 35k. Anyone else in this position? What are you guys doing?

doublejade
Guest
doublejade

I am on the same boat. I have a level 8 and want to redeem for london hotels. However, all current level 8s all going down -5000 points. I think I am gonna just wait and take a chance to see if I could get new category 6. There are several good options.

Frank
Guest
Frank

I, too, am in the same boat. Greg’s analysis looks great, EXCEPT if you really have a particular hotel or hotels in mind that you want to use the certificate for and you can’t book them yet (they are SPG properties) or they will be going down in category after 8/18. So, I had a Cat 1-5 cert that I was planning on upgrading and using for a new Cat 5 property after 8/18 (now 9/18, I guess). But now I am thinking that I ought to upgrade it now to either a Cat 6 or Cat 7 to be sure that I can use it on a new Cat 5 property after the conversion. Yet I don’t know which one to do because i don’t know how the categories will convert, and I’d prefer not to “waste” 30K points on upgrading to Cat 7 if a Cat 6 would work. Plus, I am pissed that when I called in to purchase the Cat 1-5 package, the CSR explicitly said that was a “good choice” because I could always upgrade it once I decided what hotel I wanted to use it for.

Larry
Guest
Larry

“Postulate”! Check out the big brain on Greg!

Seriously, you, Nick and team are doing by far the best work out there on this subject and your Marriott/Starwood transition resources are the best out there. Thanks for all the effort.

Justin
Guest
Justin

FYI, I have now been told twice, by two separate Marriott Rewards reps that I cannot cancel my 7 night package for a 45k points refund. All I can do is extend the expiration date. Additionally, I was just told that the reps have not been told whether travel packages will continue to be extendable after this weekend and was encouraged to go ahead and extend one of my packages now that was due to expire in December.

jude
Guest
jude

i agree. such an unbiased analysis with the sole objective of helping us. You guys are the best.

I have an unattached cat 6. thinking of buying MR points and upgrading to cat 8

Jeff
Guest
Jeff

are we not expecting the details on the mapping to new categories till september? Or do we not know when they will announce the details for the old–>new categories. I would assume they give details before the mid september ability to book the travel packages again with the existing certificates

quasimodo
Guest
quasimodo

Greg – Enjoy your blog and have used an affiliate link of yours and will again…..but I think you are OVERanalyzing this Marriott / SPG travel package thing to death. All we have to do is wait a few more days…que sera sera.

Jan
Guest
Jan

Is the expiration date based on stayed by or booked by!

Mbh
Guest
Mbh

2 data points and an idea.
1. For you fellow last minute decision makers, it took me 2 calls, 3 reps, and well over an hour yesterday just to buy a basic travel package (car 8).
2. The rep assured me that it would work on the NEW cat 8, and told me it was a good time to buy because I was getting “a great deal” by buying before the price change and that it would be good for (and I do quote) “at least a category 8” after the change. I get that the reps are infamously poorly informed, but he was so certain and I have to wonder how many others he and his buddies have said that to. It will be awful P.R. if they pull the rug out of all those who assumed they got “face value” for the category of hotel.

Idea: Is it possible they combine 2 of your ideas and say “old value for point refunds” and “new cat value for actual stays?”

the other Sam
Guest
the other Sam

I have to echo this. Three days ago (8/14), I bought a Cat 5 & a Cat 6 TP after learning from the rep that I could book Cat 5 & Cat 6 stays in the NEW, post-8/18 award/pricing scheme. I was shocked, and had heard and read contradictory reports all over, just like the rest of you. I was working with the “Elite” department personnel, and even had that rep create a notation (“a case number,” she called it) in my account to document her news to me.

Bruce
Guest
Bruce

I don’t know if this is any indication, but I just upgraded a 5 night category 7 stay cert to a 5 night category 8 cert. The original cert for 120K AA cost me 270K points. The upgrade cost me an additional 30K points. Looking at the Marriott app where it lists my certificates it says “P650Partial PKG-CAT 8 75,000 points”. I am taking that to mean my refund would be 75K points should I cancel the certificate. This would be in line with what Greg has outlined above. Cancellation would result in my net cost for 120K AA miles to be 225K Marriott points.

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[…] has made me feel like I am in algebra class with theories with names such as, “New Residual Value: Map N to […]

John at Amelia Island
Guest
John at Amelia Island

Greg,

Thank you for all of your blog posts!!!! You have really helped me understand how this evolving transition and merging of accounts may result. Over the past months, I picked-up the Ritz Card and got my spend in prior to Aug. 18th. So have status and many other benefits in the year ahead. Also, combined my 3 accounts and now have a 5-night Westin Grand Cayman stay & Cat. 8 Travel Package with 132K miles for my United Account and some points remaining! Wow!!!, these stays will be fantastic for next year.

Again, my thanks to you and your team for all of the professional analysis and helpful information.

Christine B
Guest
Christine B

Even at my favorite hotels, I’ve never stayed 7 or more days in a row. My two favorite hotels are dropping one category each after the merge. Seems like for me, it’s best to just sit on my current Cat 1-5 7-night packages, and let them refund me the 45K points. Then, when it works for me, I can use those 45K points to book a shorter stay at a lower price using the 5th night free benefit.

Greg, thank you for all you do. My brain would explode trying to sort through all the possible options from scratch.

toomanybooks
Guest
toomanybooks

Sure would be nice not to sit on hold for an hour with these idiots.

Golden
Guest
Golden

Marriott posted an update on how the certificates will convert. Seems it is mainly based on the max point value and peak redemption rates in 2019.

https://insiders.marriottrewards.com/blogs/exclusive-news/2018/08/10/how-to-use-your-current-travel-package-certificate-prior-to-818

Existing Travel Package category | How Travel Packages will convert starting today (8/18)

Cat 1-5 (max 25K points) | Cat 1-4 (max 30K points)
Cat 6 (30K points) | Cat 1-4 (max 30K points)
Cat 7 (35K points) | Cat 5 (max 40K points)
Cat 8 (40K points) | Cat 5 (max 40K points)
Cat 9 (45K points) | Cat 6 (max 60K points)
Tier 1-3 (max 50K points) | Cat 6 (max 60K points)
Tier 4-5 (max 70K points) | Cat 7 (max 70K points)

fll
Guest
fll

The WORSE CASE SCENARIO COMES TRUE.

Conversion Table announced. Cat 6 and 8 holders are screwed.

The residual value has NOT yet announced. Let’s say if it is being screwed even further.

i.e. the Residual Value would be LESS than what they were before! At this point it would not surprise me any more how sleazy Marriott can be.