Many Marriott blogs don't do points math correctly

Many Marriott blogs, including the major ones, and point calculators are less accurate in their points valuations because they do not always take into account taxes, service charges, and fees which can easily add up to 10% of the total cost. This also means their points valuations may be off by around 10% in some cases.

Short simplified version:

You will find more good Marriott redemptions by understanding these concepts which apply to most locations. Other hotel chains may differ.

You do not pay taxes on a points redemption.

Other blogs calculate points value based on the room cost, ignoring taxes and fees, so they are less accurate in their points valuation.

The higher the taxes, the more value for your points redemption.

There are more nuances, but remembering the 2 points above is enough for you to get more savings using points without getting your Marriott loyalty program PhD.

Long-read version:

You will find more good points redemptions despite once you understand costs beyond the room cost and how you can avoid or reduce them.

1. Tax: You do not pay taxes on a points redemption, with few exceptions.
2. Fees: Many types and varies by location. Points redemptions may eliminate, reduce or not change the fee.
3. Service Charges: You do not pay service charge on a points redemption.

Tax is typically the greatest cost after the room. Fees and service charges are typically less than the tax.

Why no taxes on a points redemption?

Taxes are complicated. Governments come up with all sorts of taxes to generate revenue, and depending on the complexity, they can strongly support an industry of tax consultants.

In the US, there is no federal sales tax (yet), but there can be state, local and even country taxes. This means taxes vary by location. Marriott lumps all applicable taxes up into a line called Est. Taxes & Fees.

There are 2 broad categories of how tax is calculated:

1, Percentage-based taxes such as sales tax are common. Using a simple example, if the room costs $100 and there is a 10% tax, there is an additional $10 you have to pay, so your total cost is $110.

$100 + 10% tax = $110.

My thought on why no taxes on redemptions, is because the tax rules were written for the currency the hotel bills in. Marriott points are not managed by the US government. To tax points, at the minimum, you would have to have an exchange rate of USD to Marriott points.

I do not see a future where the US government taxes points, as that would require the US government to maintain exchange rates with every single loyalty program that exists out there. Any business with loyalty programs would lobby against this as tax integration in this form would essentially kill all loyalty programs.

2, Fixed-rate taxes such as a "tourist levy" is common in Europe. This could be per hotel night, per person, or even per person per hotel night.

Marriott points redemptions are for the room, not the number of guests. You're likely to benefit more from points redemptions in places with fixed-rate taxes.

Only when you get the final hotel bill, you will see the breakdown of taxes if there are multiple types and/or not covered by the points. A more accurate statement is:

Majority of taxes are gone on a points redemption

Example 1: All taxes and fees gone

In the example below from Redmond, WA in the USA, Est. Taxes & Fees, in addition to the Convention / Tourism Fee are eliminated via a points redemption.

Example 2: Taxes mostly gone, some fees gone.

At the W Seattle hotel which is under 10km (6 miles) away from the hotel in the previous example, there is an additional Destination Fee. The Convention / Tourism Fee was eliminated when using points, but the Est. Taxes & Fees was only reduced, although by about 92.5%.

I'm not entirely sure what the USD 4.40 is, but I speculate it's the Seattle Tourism Improvement Area (STIA) Fee for hotels in the downtown core, although the charge is a flat $4.00 per night. If I change the stay to 2 nights, it goes to USD $8.79, so it does seem to be ($4/night x 2) + 10% tax of some sort applied to the STIA fee.

What are fees?

A Fee is a targeted charge meant to recover the cost of a specific service used by the payer, whereas a tax is a mandatory payment to fund general government services (like roads, schools, or the military) for everyone. There may be multiple fees also due to the multiple levels of government; national, state, local and county.

Fees can be fixed or variable (percentage-based). Fixed fees could also be per hotel night, per person, or per person per night. My examples above already showed 2 fees:

1. Destination Fee
2. Convention / Tourism Fee

What are service charges?

Service charges are mandatory fees (usually 10%) set by the hotel. It is intended to ensure staff are compensated consistently regardless of individual tipping habits or customs.

You will find an example of service changes further down.

Tips (Gratuity) are voluntary. In countries with high service charges, tipping is often not expected.

Getting more value out of points redemptions

Now that you understand the basics of no taxes on points redemptions and what fees are, you need to learn additional mechanics to maximize the value.

Redeem at Platinum or higher in APAC

There are 2 points being made here, but it's easier to remember fewer rules.

1, If you aren't Platinum, you redeem points for a room and pay for breakfast, unless the brand offers breakfast to everyone (e.g. Residence Inn). There are no points redemptions for rooms with breakfast; you only get the room, so you will get less out of a points redemption than if you had Platinum status.

2, More Marriott brands offer free breakfast in APAC to Platinum members. You are less restricted than before to brands that offered breakfast to Platinum members (in North America or Europe), which mean more choices of hotel location, cost, etc.

e.g. Moxy in the US does not offer breakfast to Platinum members, but a Moxy in Asia does via the breakfast option in the Welcome Gift for Elites.

Double-dip points and breakfast

Stay at Courtyard with lounges outside of North America. Guaranteed Lounge Access means you get breakfast at the restaurant if the lounge is unavailable for whatever reason. Regardless of whether the lounge is open or not, this means you can choose the Welcome Gift of points instead

If a Courtyard with a lounge in North America is closed, sorry, no free breakfast for you at the restaurant. Your choices are points or F&B credit.

If you stay at a Renaissance in APAC with a lounge, although Renaissance is not listed in the Guaranteed Lounge Access, you will get breakfast at the restaurant, as well as the Welcome Gift of points.

Some hotels will let you choose breakfast in lounge or restaurant.

Redeem points when traveling with second adult

Marriott generally does not charge more cash or points for a second person staying in a room. The exceptions will trip you up.

E.g. Occupancy-based charging is common in Japan, but not consistent even within the same Marriott brands. Location may also come into factor. The hotel below in Kyoto charges extra for a second person, perhaps due to Kyoto being overrun by tourists. Service Charge and Est. Taxes & Fees also go up accordingly with a second person.

Kyoto also charges local accommodation tax due to over-tourism that is not covered by Est. Taxes & Fees nor points redemption.

The example below is not used to show a good points value redemption. I have only included it to illustrate how additional person costs, service charges, and Est. Taxes & Fees all go away using a points redemption. The local accommodation tax is not charged by Marriott so it does not go away.

Stay for 5, pay for 4

Receive a complimentary night when you redeem points for five consecutive nights. You only pay for the 4 highest nights' worth of points. e.g. you pay 40K points in the example below:

What does an amazing redemption look like?

I think over 2.5 cents per point ($0.025) is amazing. You are more likely to find these at more expensive hotels when combined with Stay for 5, pay for 4.

$3428.91 / 137000 points = $0.025

Conclusion

The impact of points redemptions on taxes and fees is a complex topic, but generally taxes are gone when using points redemptions. Combine points redemptions with Stay 5, Pay 4 as a Platinum status member to get the most out of redemptions in APAC.

FAQ

Tax on Cash & Points Redemptions?

You still have to pay tax, but your taxes are reduced to only the cash portion. Recall tax rules apply to the currency it taxes and does not apply to loyalty programs.