Marriott Cash + Points Revised. Good deal?

This morning Marriott announced several changes to Marriott Bonvoy awards (details here).  One of the changes is that they revised Points + Cash pricing for peak and off-peak awards.  I wasn’t too excited about the original plan, but how about now?  Did Marriott redeem Cash + Points?  (see what I did there?)

The chart, above, shows the regular award prices (Points Only) and the Cash + Points prices.  The Cash + Points rates are the same as previously announced for standard award nights, but the Peak and Off-Peak rates have changed quite a bit in order to keep the cash portion consistent within each hotel category.

The idea behind Cash + Points rates is that you might not have enough points to book your desired stay, so you can instead pay partially with cash.  You can think of it as indirectly buying the points needed for the award.  Take, for example, a category 4 hotel that would normally cost 25,000 points.  If you didn’t have the full 25,000 points, and if Cash + Points rates were available, you could use 12,000 points plus $105 in cash to book the room.  This is like buying the extra 13,000 points for $105.

Is that a good deal?  Let’s crunch the numbers:

As I said above, booking a Cash + Points award is similar to buying the difference in points between the points portion of the Cash + Points award and the full points price of the award.  The table above shows the point “purchase price” for each award.

I highlighted the chart in green where I think the “purchase price” is a good deal, and in red where I think it’s a bad deal. Green means that the purchase price is similar or less than the Reasonable Redemption Value for Marriott points, which is currently 0.72 cents per point.  In other words, the cells in green show where it’s possible to buy points for what I’d consider a good price.  If you buy points for around 0.72 cents each, it’s a good bet that you’ll be able to redeem them for more value.

One Cash + Points option particularly stands out as a good deal.  Category 6 peak priced Cash + Points awards are equivalent to buying points for only 0.63 cents each.

Marriott lets you buy points directly for 1.25 cents per point.  There’s no reason to pay a higher Cash + Points rate when you could buy the points for less and then book a points-only award.  As you can see in the above chart, category 1 standard and off-peak awards are a bad deal with Cash + Points.

The rest of the cells, those not shaded red or green, could make sense under certain circumstances.  When there’s no sale on points, and when you don’t have enough points for your award, it can absolutely make sense to book these.  See the next section for details.

Comparing to all-cash

Another way of looking at Cash + Points awards is as a way of saving money over all-cash rates.  When all-cash rates are very high, a points-only booking usually makes the most sense, but Cash + Points can make sense too if you don’t have the points to spare.

Let’s take a simple example: A category 3 hotel costs 17,500 points at the standard rate, or $80 + 8,500 points. And let’s imagine that the all-cash price for the same hotel room is $150 all-in.

If you had the 17,500 points available, a points-only booking makes sense.  You would get $150 / 17,500 =  0.86 cents per point value.  That’s not amazing, but it’s more than the current Reasonable Redemption Value.

Now suppose you started with zero points and simply bought 17,500 points for 1.25 cents each.  That would cost you $218.75.  That would be a very bad deal compared to booking the room for $150 straight up.

Cash + Points, though, is less obvious as to whether or not it’s a good deal.  If the room rate was only $80 it would obviously be stupid to spend $80 + 8,500 points instead.  In this case, though, the 8,500 points saves you $150 – $80 = $70.  Is that a good deal?  Actually, yeah, it’s not bad. In this example you would get $70 / 8,500 = 0.82 cents per point value from your 8,500 points.  Since 0.82 cents per point is more than the Reasonable Redemption Value, it may be worth doing.

The above example glossed over the fact that you can earn points on your all-cash booking, but it should give you a general idea of how to evaluate when to go with Cash + Points.

Summary

Marriott’s revised Cash + Points scheme is sometimes a really bad deal (especially with category 1 standard or off-peak awards), sometimes a good deal, but often a deal that depends upon circumstance.  If a points-only booking makes sense (e.g. the cash-only price is high), then there’s a good chance that Cash + Points makes sense too if you don’t have enough points for a points-only award.  Keep in mind, though, that Cash + Points awards are not always available.  They tend to be much harder to find than points-only awards.

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.

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[…] Cash + Points pricing has changed. For my complete analysis, see: Marriott Cash + Points Revised. Good deal? […]

jon
Guest
jon

Taxes on cash portion?

Alan
Guest
Alan

I would think there are taxes. I booked an award with a cash room upgrade and was charged tax on that so no reason the cash portion for a cash+points shouldn’t also be taxed. I don’t think it’d make a big difference to the point value but could sway things one way or another.

OR97
Guest
OR97

Interesting that the cash portion is fixed (unlike IHG or Hilton where the cash portion is based on the going rate)—that could be a big savings for those properties that have a high rate in any given day. If I am understanding this correctly…

Joseph N.
Guest
Joseph N.

You are understanding it correctly. Due to the unique way Marriott assigns hotel categories (by popularity, not by room rate) this new system is going to lead to some cases where a high priced hotel is going to be a huge deal with P+C.

When Hyatt used to have this same P+C system, it created huge values.

Brands
Guest
Brands

Do you actually purchase the points on a points+cash with Marriott? If so, can you cancel the reservation and have the points you purchase deposited into your account? If so, this would be a great development!

Joseph N.
Guest
Joseph N.

Greg, thanks for the great overview.

I will make a small complaint. You seem to be assuming that Marriott elites have an unlimited supply of points, and an unlimited numbers of nights to choose from. They don’t. Therefore, I suspect there will more times that P+C is a good value than you think.

Fio
Guest
Fio

WRT Marriott FNA 35k certs – will you be able to use these in points and cash bookings – up to cat 7 standard+250?

Treesha
Guest
Treesha

What happens if you cancel your P+C booking? Do you get the purchased points deposited into your account like IHG? Or a cash refund for the cash portion?

Fio
Guest
Fio

Greg – please change the calc on cat 8 peak – the details are wrong. Sorry!

Ray
Guest
Ray

For years I made frequent use of cash and points for Starwood property reservations. However, in recent years and especially since the merger with Marriott, the value proposition for cash and points hotel stays has diminished substantially, in my opinion For example, a couple of years ago I stayed at the Boston Sheraton and the cash portion was $110, now it is $190. With a AAA discount, I was able to find a room for $240 for a recent weekend stay. So in this case using 25,000 points would have only saved me $50 instead of $130 like in the past. I have also seen situations at other Marriott properties where the cash requirements for a cash and points stay was more than the cost of a cash rate with a AAA or similar discount. Further, I have found much less availability of cash and points since Marriott has taken over the Starwood hotels. Perhaps with the new rules for variable pricing, there will always be a cash and points option. In which case there may be some value for these types of stays when the cash rates are particularly high.