Marriott Rewards Announces Upcoming Changes and News Regarding Marriott Rewards 2.0
Our award-winning loyalty program, Marriott Rewards, develops relationships with our most profitable guests to drive revenue and shift share to our hotels, and also creates our best barrier to OTAs. Members deliver 50% of paid roomnights each year, equating to over $12B in annual revenue.
We continually evaluate the program and its benefits, and strive to provide you with the lowest-cost, highest-value program. As we begin preparing for next year, I wanted to share with you some important program information as well as news of necessary changes and their timing.
Program Changes
Supporting the economics of the program and ensuring continued investment in development of the program are critical next steps as we head into 2015. Over the past four years, we have enhanced our redemption policies to address increasing redemption demand, seasonality, and displacement on high-occupancy nights. We have added multiple occupancy thresholds to our daily reimbursement policy including an undiluted ADR. Over this same period, the average reimbursement rate paid to hotels has increased by 22%. In 2014, we have continued to see the multi-year trend of reimbursement revenues to hotels exceeding the funding coming into the program. In light of the rising cost of reimbursements, and in conjunction with the need to invest in the future of our most loyal guests and combat OTAs, we are making the following changes to the program:
Increasing Charge-Out Rates (To be effective with billing charges issued in January 2015)
Every year we assess each brand’s funding capacity to ensure it can cover the costs and reimbursement expenses for that brand. We take any increase in property expenses very seriously and have worked diligently to keep rates generally flat even in light of inflation and other economic pressures. Even with these changes, the charge-out rates for hotels in the Marriott portfolio of brands are lower than, or on par with, competitor rates. We will continue to monitor the impact of changes to the program on properties and guests to make adjustments as needed.
Effective with Rewards billing charges that will post in January 2015, the charge-out rates for each of Marriott’s brands will be impacted as follows:
| Brand | Current | Effective with January 2015 Billing | Change |
| Full Service (RH, JW, AUTO, MH, EDITION and GH) |
4.4% | 4.5% | 0.1 pts |
| Courtyard | 3.8% | 3.9% | 0.1 pts |
| Fairfield | 3.6% | 3.7% | 0.1 pts |
| Residence Inn | 2.0% | 2.1% | 0.1 pts |
| SpringHill Suites | 3.4% | 3.5% | 0.1 pts |
| TownePlace Suites | 2.0% | 2.1% | 0.1 pts |
| AC Hotels by Marriott | 3.6% | 3.6% | No Change |
Program Policy to Implement Cap on Total Redemptions
In order to further help reduce hotel reimbursement costs in ways that better align with the spirit of the program reimbursement policies, Rewards will be implementing a ceiling on the total redemption nights that may be reserved at a hotel. This cap will be at 50% of the total rooms available in a hotel on a given night. This does not change the No Blackout Date policy, nor does it change the reimbursement rate paid for any of the redemption nights at a hotel.
Annual Business Timeline
Every year, the program re-calculates the blended reimbursement rates & determines Hotel Category placements. Here are some upcoming dates to aid in your business planning:
- Mid-December: 2015 Blended rates will be calculated and delivered via MRW5 report.
- January 1, 2015: New blended rates & charge-out rates take effect.
- March/April 2015: Annual Hotel Category Placement communicated and implemented.
Marriott Rewards Looks to the Future
In the same way we changed the game with the launch of Marriott Rewards decades ago, we are now innovating and changing the program to secure the future loyalty of Next-Generation travelers and the revenues they will bring to your hotels. These innovations are focused on making Marriott Rewards engaging, compelling, and relevant to the Gen Y customer to ensure they choose our hotels in the decades to come. As our greatest tool for organizing and building customer loyalty, Marriott Rewards continues to be one of the company’s top strategic focus areas for 2015 and beyond.
This past summer, we started engaging with Marriott Rewards members in new ways, launching several proofs of concept (POCs) to test and learn with innovations that meet the needs of Next-Generation travelers. The POCs aimed to make earning and redeeming points instant, simple, and relevant, and to allow members to connect with one another in new ways – including enabling them to enjoy our hotels in their own neighborhoods.
The POCs are just the “tip of the iceberg” of things to come with Marriott Rewards:
PlusPoints | Launched in May 2014
Members can earn points in real-time through social actions, such as posting pictures with our hashtag on Facebook, Twitter and/or Instagram.
FlashPerks | Launched in July 2014
Each week we offer high-value, limited inventory hotel and merchandise offers for points or cash. These offers are available to members for 24 hours every Thursday or until sold out. This is a 12-week campaign through late September.
LocalPerks | Launched in July 2014
Members receive mobile marketing offers and messaging via iBeacon technology to enhance their on-property experience. Marriott International is the first major hospitality company to implement this type of marketing, and we are testing its feasibility at 15 properties through year-end.
MyDashboard | Launched in July 2014
We have redesigned member account pages, currently being called “MyDashboard,” to be mobile-friendly and interactive to encourage social sharing and earning points.
Learnings from these POCs, along with ongoing research and innovation, will be used to sharpen our long-term vision and strategy for Marriott Rewards. This is just the beginning of great things to come for the program, and we look forward to communicating more about this groundbreaking and industry-leading work in the months ahead.
Marriott Rewards Remains “Best of the Best”
Marriott Rewards’ 47+ million members continue to go out of their way to stay at our hotels, and in doing so, pay a higher average rate. In addition, Marriott Rewards continues to be the “best-in-class” loyalty program among our guests, and the program is consistently recognized as the “Best Hotel Loyalty Program in the World,” including most recently being awarded:
- 2014 Top Hotel Loyalty Program (for the second year in a row) | U.S. News & World Report, August 2014
- Highest in Overall Customer Satisfaction with Hotel Loyalty/Rewards Programs | J.D. Power 2014 Hotel Loyalty/Rewards Program Satisfaction Report
- Program of the Year (seventh year in a row), Awards in The Americas for: Best Promotion – MegaBonus, Best Redemption Ability, and Best Customer Service | Freddie Awards, April 2014
- 2013 Golden Horse Award for the ‘Most Popular Membership Program in China’ | Hotel Magazine
- 2014 Flyertea Award for the Best Business Loyalty Program (China)
We are focused on delivering greater returns to you by using Marriott Rewards to encourage travelers to book direct instead of booking through higher-cost OTAs, building loyalty with the Next-Generation traveler, investing in new mobile functionality, and aggressively acquiring new members in emerging markets.
While I realize this is a lengthy update on the program, I wanted to share the full spectrum of everything that Marriott Rewards is achieving to ensure continued program dominance. If you have any questions, please let me know.
Best regards,
Liam Brown
President, U.S. & Canada, Select Service & Extended Stay Lodging and Owner & Franchise Services