Yesterday, Greg published the latest edition of his brilliant spreadsheet for determining which expensive credit cards to keep: Which Ultra Premium Cards are Keepers? Version 3.0. Someone in the comments brought up a question that we receive from time to time: is it worth MSing Platinum status on the Ritz-Carlton Credit Card (no longer available to new applicants but possibly available via product change) or the Marriott Bonvoy Brilliant card? The initial answer in my mind is an unequivocal “NO!”, but that was entirely subjective; I hadn’t actually run the numbers on it. After running the numbers, my answer is still a pretty firm “NO!”, but here is my rationale from both subjective and (relatively) objective viewpoints.
My subjective take
In yesterday’s post, Greg made the point that when determining the relative value of an individual card benefit, you should consider how much you would be willing to pay for a subscription to that benefit. Forget how much you’ll “save” and consider instead the price at which you’d subscribe. For example, if an airline credit card comes with free checked bags, how much would you be willing to pay for a subscription to get free checked bags on that one airline’s flights? Let’s say you think you’ll probably spend $300 over the course of the year on checked bags. How much would you pay up front to probably save $300? You’d need to be saving a substantial amount to consider subscribing and pre-paying (because you don’t know for sure that you’ll save $300 since you may fly another airline or travel less often than intended or find a cheap first class fare that includes free bags, etc). Maybe you’d pay $150 for that subscription; I doubt you’d pay $250. In that case, it makes sense to value the checked baggage benefit at about $150 (the price at which you’d pay to subscribe to it).
We should therefore pose the question: How much would you pay for a subscription to breakfast at Marriott hotels? (Side note: I’m surprised that IHG hasn’t offered this!).
If you’re going to value free breakfast, it makes sense to consider how many nights you are likely to stay and how much you would otherwise pay for breakfast. Then figure how much you would pay for a subscription to that benefit.
For argument’s sake, let’s say you intend to actually spend 10 nights on vacation in swanky Marriotts where you would otherwise have to pay $120 per day on breakfast for two. Faced with that option, I think most of us would probably find a more reasonably-priced option for breakfast off-property, but now that I am a family traveler I do understand that it is much more convenient to have breakfast on-property. Let’s therefore suppose that you think you’ll likely spend about $1200 on breakfast over the course of the year. How much would you pay for a subscription that locks you in to only having those swanky breakfasts at Marriott hotels? A subscription would have to cost substantially less to interest me; I don’t know for sure that I’ll spend those 10 nights at swanky Marriott hotels (maybe I’ll get sick and miss a trip or maybe there will be a hotel price mistake at a Hilton or maybe this or that) and I further don’t make a habit of spending $120 on breakfast. As a guy who is totally happy with a Texas Sausage Melt at Waffle House for like $5, I’d be kidding myself if I said I’d lock myself in on ten breakfasts at an average price of even $60 for two people. Maybe I’d pay $500, which works out to spending $25 per person for breakfast over those 10 expected nights. Maybe. That’s about as far as I can realistically imagine stretching it.
Whatever you decide you’d pay for a Marriott breakfast subscription is your valuation of Marriott Platinum status. OK, Platinum status comes with a slightly better chance of an upgrade and 4pm late checkout, so you may assign some value to those things, but I wouldn’t recommend valuing them very highly. You only get Suite Night Awards if you actually collect 50 elite nights, so don’t count those in your valuation if you’re considering MSing Platinum status. You also earn a few more points per dollar on paid stays, but if you’re not staying enough to reach status naturally, then I can’t imagine that the few extra points you’ll earn are a benefit to which you’d pay to subscribe. Also note that if you earn Platinum status via $75K spend, it does not get you closer to Titanium status. You still need 75 nights of elite credit to get to Titanium (spending $75K doesn’t get you 50 nights, it just gets you Platinum status).
In the end, I think you’re fooling yourself to value Platinum status at more than about $500 or maybe $600 if you’re going to spend those 10 nights in swanky hotels where you’ll have an expensive on-property breakfast. If you had to spend more than $60 cash each morning on breakfast for two people, you’d probably accept the inconvenience of getting breakfast off-property for $10 per person or buying a box of cereal to enjoy in your room. But feel free to adjust your valuation as you see fit.
But what if you’ll stay more than 10 nights?
If you’ll stay more than 10 nights at those swanky Marriotts, I think you’re crazy to even contemplate spending $75,000 on a credit card to earn Platinum status. Here’s why:
- You get 15 elite night credits from having one of the Bonvoy credit cards
- You can get 10 elite night credits for hosting a meeting once a year at a Marriott
- You’ll get 10 elite night credits for the 10 nights you intend to spend at hotels with swanky breakfast
That’s a total of 35 nights of elite credit, which puts you just 15 nights shy of Marriott Platinum status. The cost of hosting a meeting where you get elite night credits will vary and it will take a little effort to be sure you get it set up correctly to get the elite night credit (see our shortcuts to Marriott Platinum status post), but let’s say you pay $150 to host a meeting (anecdotally, I’ve certainly heard of people finding hotels willing to host a meeting for less). Still, you’d be within striking distance of Platinum once you get that sorted out. If you intend to stay more nights at a Marriott hotel, you’re even fewer than 15 nights away from qualifying for Platinum status naturally (which will come with your choice benefit where you could choose suite night awards for example).
Let’s assume for a moment that you’ll only have the 35 nights of elite credit outlined above. I’ve previously written about the fact that Category 1 properties now cost 5,000 points per night off-peak. Since the 5th night is free on award stays, it costs 20,000 points to book a 5-night stay at a Category 1 property off-peak. Therefore, if you can find a Category 1 property with off-peak pricing, 60,000 points would be enough to cover three separate 5-night reservations — giving you the 15 nights you’d need for Platinum status.
Since the various Marriott Bonvoy credit cards earn 2 Marriott points per dollar, your worst case scenario (and I do think this is a worst case since I wouldn’t actually do this) is that you could spend $30,000 on any of the Marriott Bonvoy credit cards to generate 60,000 Marriott points and then use those points to book your three 5-night reservations at locations / times that are convenient for you to be able to check in (whether or not you actually intend to stay). Admittedly, there might be some complexity here: if housekeeping sees the room unoccupied day after day, there is a chance that the hotel could check you out early. If you actually followed this approach (and I do not recommend you do), you’d probably want to be up front with the front desk and make sure that the manager knows you are planning to come and go and may not be there every day but you don’t want to be checked out early since you may need the room again at some point over the next few days. This plan, which I think is your worst case scenario, requires $45,000 less spend on Marriott credit cards than the option to spend $75K (and may therefore be worth a little inconvenience to you to pursue).
Of course, if you wanted to follow the above plan to book three 5-night reservations at Category 1 properties, you could manufacture the 60,000 points required pretty cheaply via Chase Ultimate Rewards. Greg recently wrote about the best cards for buying Visa and Mastercard gift cards and showed that you could easily generate Ultimate Rewards points at a cost of 6 tenths of a cent per point ($0.006). That’s a worst-case scenario that doesn’t take into consideration promotions like next week’s fee-free Visa Gift Cards at Staples. Since Marriott is a Chase transfer partner, you could therefore generate 60,000 points at a cost of $360 (likely less because you will likely take advantage of fee-free promotions by keeping an eye on our current Visa and Mastercard gift card deals page). Add your $150 cost for hosting a meeting and you’re at about the $500 I previously said I might consider spending to subscribe to free breakfast (or less cost with fee-free promos). This is not a great deal and I generally wouldn’t consider transferring Ultimate Rewards to Marriott, but the fact of the matter is that at 5x, you could generate the 60,000 points necessary to pursue the off-peak Marriott Category 1 strategy with just $12,000 spend on a Chase Ink Cash card. To be clear, this would not be my strategy for attaining Marriott Platinum status, but my point is that it could be yours and would require sixty-three thousand dollars less in spend.
If you’ll stay even more than 10 nights at a Marriott hotel over the course of the year, the strategy to manufacture Category 1 nights becomes even cheaper since you’ll need fewer nights to fill the gap. For example, if you’ll spend 15 nights per year at Marriott hotels naturally, then combined with 15 elite nights for having a Marriott credit card and 10 elite nights for hosting a meeting, you’d only need to manufacture the points for 10 nights at Marriott Category 1 properties (40K points if booked off-peak in 5-night increments). Adjust the options above down accordingly.
What if you’ll stay fewer than 10 nights at Marriott hotels?
If you’ll stay fewer than 10 nights at Marriott properties with swanky breakfasts, I recommend a visit to your psychiatrist to explore why you would consider spending $75,000 on a single credit card to earn elite status that you’re not actually going to use.
A (slightly) more objective viewpoint
The above is heavily influenced by opinion, including how much I think free breakfast is worth and how averse I would be to spending so much on a single Marriott credit card. However, I think there are more objective arguments as to why it doesn’t make much sense to spend $75K on a Marriott credit card for Platinum status.
Spending for Marriott elite status comes at a very high opportunity cost. If you complete $75K spend on a a Ritz-Carlton credit card (as an example) at 2x, you’ll have 150,000 Marriott points and Platinum status. According to our Reasonable Redemption Values, the points are worth around $1080 (at a value of 0.72 cents per point) when used towards Marriott stays. If we continue to value Marriott Platinum at around $500, that’s a little less than $1600 in total value from spending $75K. Let’s look at the alternatives:
- Spend $75K on a credit card that earns 2% cash back, get $1,500 in cash back
- Spend $75K on a credit card that earns 2.5% back or better, like the Alliant card or BOA Premium Rewards with Platinum honors, get at least $1,875 cash back
- Spend $75K on a credit card that earns 3% back in the first year (like the Alliant card or the Discover IT Miles card effectively), get $2,250 cash back
- Spend $75K over several new credit cards to earn welcome bonuses and earn a lot more
It’s worth noting for #4 that if you have the capability to spend $50,000 within 6 months, you could earn $3,000 total with a single new cardmember bonus and the return on everyday spend at the time of writing. If you split your spend over multiple new credit card welcome bonuses, you could easily eclipse that total.
My point here is this: even at just 2% cash back, you’re earning almost a wash with the value of the Marriott points plus Platinum status and you would be earning cash instead of funny money and a breakfast subscription. To me, that’s more valuable than Marriott points and a wishy-washy valuation of Marriott Platinum status. If you know you’ll get those 10 nights with swanky morning breakfasts, maybe you could convince yourself to trade the opportunity to earn $1500 in cash back for 150K Marriott points and Platinum status, but if you have the chance to earn any more than $1500 in cash back for that spend (as outlined above), I think your choice to spend on a card to earn Marriott Platinum status becomes more and more questionable. If you could earn close to $2,000 in cash back, I think it makes more sense to go for cash back and just buy yourself breakfast if and when you stay at the swanky Marriott (or mix things up and perhaps choose to buy breakfast for 5 nights, sleep in and miss breakfast for 3 nights, and go find a local place for breakfast for $20 two other nights — if you’re earning cash back, the choice is yours). Furthermore, if you earn cash back, you won’t be locked in to spending those nights at Marriott properties: feel free to stay at a Hilton or Hyatt or vacation rental and buy yourself breakfast with your cash back since you won’t feel like you’re locked in to Marriott based on having spent $75K on the card to earn status.
Let’s also consider that if you spend more than 10 nights per year at Marriott hotels (and therefore have more than 35 nights of elite credit as outlined in the section above), you could concentrate your spend on cash back and use some of the cash back to book cheap Marriott hotels for the nights needed to fill the gap.
Of course, those who MS heavily may make the argument that they can have their cake and eat it too by earning cash back while also MSing Platinum status. I still think the value of MSing Marriott Platinum status is tenuous at best. In order to value Platinum status, you obviously need to be able to leverage that status by staying at Marriott hotels. While I’m basing the analysis above on plans to stay 10 nights at Marriott properties, I think that’s a low threshold: I personally wouldn’t value status very highly if I only intended to use its benefits ten nights per year. As you increase the number of nights per year that you’ll stay at Marriott properties, the gap between your elite credits and Platinum status becomes smaller and the value proposition of spending $75,000 on a single credit card becomes more and more questionable. I think most people who stay enough nights per year to value status but not quite enough to get to 50 would be better off with a strategy to combine hosting a meeting with booking a few throwaway Category 1 nights to fill the gap to get to 50 nights and earn Suite Night Awards or to instead earn cash back and buy themselves breakfast, forgoing status entirely or if very close to 50 nights to earn cash back and use some of that cash to book cheap paid nights to fill the gap. I just couldn’t justify $75K spend on one of the Marriott cards.