How Much Marriott Hotels Have To Pay When Bonvoy Members Stay

Marriott claimed over 140 million members at the end of 2019. At some brands members represent about two thirds of revenue. Based on franchise disclosures, the average Marriott Bonvoy member pays AC Hotels a $200.74 daily room rate and at Westin hotels it’s a $185 daily room rate.

Guests aren’t customers, they’re Marriott’s product – and the product that all hotel chains sell to hotel owners. While hotel chains push ‘book direct’ as a way of lowering costs, distribution isn’t free. Franchisees pay more for Bonvoy members than non-members, on the theory that Marriott is delivering these “leads” to hotels. And those fees fund points that members earn.

For Westin in 2021, Marriott is charging 4.2% of “qualifying revenue generated by customers earning loyalty points or miles” for the cost of Bonvoy, not including elite bonus points. The cost of those is higher than you’d expect.

For AC Hotels, though, the base charge is just 2.3% of qualifying revenue which includes awarding of base (but not elite) points.

These fees add up, with all of the points members earn. During the pandemic Marriott went $800 million into the hole with American Express and Chase, pre-selling these points. Marriott reported $5.7 billion deferred revenue as program liability. That makes continually devaluing the points so irresistible. At too many of these programs its the CFO that wins over the long-term value of the business.

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