A few days ago I posted my suspicions about Marriott/SPG’s overwhelmingly positive reception. One Mile At A Time posted that there were some great new values in the new award chart that probably wouldn’t last. Friends, readers, strangers – I have some bad news.
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Live From The Freddies
My wife and I were able to attend the Freddies (an award event for travel loyalty programs) and found ourselves milling around before the start of the event. When the Marriott folks walked up behind us in line for a Coca-Cola I thought I should take the opportunity to ask these leading representatives of the world’s largest hotel chain about the transition with SPG and some of the discrepancies in the new award chart that would make more expensive properties in SPG’s line (with a 1:3 ratio to Marriott points) a far better deal. In some cases, the new price would come in less than 2/3rds of the old price. A 35,000 SPG point redemption should cost 105,000 apples to apples, but on the new chart, there is a period where that room would only cost 60,000 [unnamed Marriott loyalty program] points. Even peak prices of 100,000 would technically bring the price down, though by less than 2,000 SPG points by comparison.
A perplexed look appeared when I asked about the great new deals. Then a look and tone of indignation. This unnamed representative was a little brusque generally, though my tone was upbeat talking about the great new deals in the program. [Their] hubris was offputting and lacked pleasantness at best and humility at minimum.
While there are no specifics as to what the new categories will be, how much the nights will cost nor the swing from peak to off-peak there were some preliminary indications eluded to. It was clear by the look on [their] faces and the tone of the response that things were about to change. Indeed, one representative said as much. “There will be new categories” and friends, they won’t be lower prices.
I asked about sweet spots and was again greeted by a perplexed response. “Sweet spots? What’s a sweet spot?” It’s funny to me that at an industry event where half of the attendees are award nominees and the others are bloggers, that this particular program executive was so removed from what we all know and write about all the time that the concept of an outsized value was foreign. So I clarified, explaining to an executive at the world’s largest hotel chain, a person senior in their loyalty program’s management, what an outsized value is and why we are so passionate about loyalty programs. Because a commenter recently mentioned a particular Marriott property, I used specifics to illustrate my point.
“For example, the Ritz-Carlton Jakarta prices nights at $300-400/nt, but the award prices were just 30,000/night while a Courtyard runs $130 and 30,000 points but the Bohemian [boutique owned Marriott] down the road [ in Orlando] costs twice the money but the point difference is only 5,000 more points/night. The Ritz in Jakarta delivers outsized value and makes me want to earn more Marriott points.” I wasn’t trying to out the forgotten cheaper redemptions in the system, I was making a point about loyalty program basics that should not have been new information. It’s startling to me that this seemed to be virgin ground.
“That must have been an odd weekend or off-peak.” The representative said, completely focusing on the wrong thing. Not a surprise in and of itself, but disappointing all the same.
Their statement though suggested that these anomalies should remain anomalies. When pressed further regarding whether they were pursuing a more direct relationship between redemption cost and room price as Southwest (and Hilton) have done, they stated that not exactly but close.
Seeing my reaction (I wear these things on my face) [he/she] indicated that some properties would move up and some down in cost. I mentioned that another program bases their categories on occupancy. That is why (in the other program) one property charges the second-from-the-highest redemption level for a hotel that routinely sells for $250-300/nt while the same category is home to another famous property that runs $800-3,000/nt. The less expensive hotel is just as busy on an occupancy basis as the astronomical property thus, they are in the same category.
That’s not how [the new, still somehow unnamed Marriott] loyalty program will price their rooms. They will be attached to a historical ADR (average daily rate) from the previous year. This removes sweet spots in effect.
Unambiguous new information count (3):
- New categories are coming and they will be at the higher end of the chart, not the lower end.
- Some hotels will move categories going up and down (nothing earth shattering there) but this seemed to defend that if you add categories you have to fill them so prices will increase.
- Those redemption rates will be based, at least strongly correlated (I presume in price buckets) with the previous year’s ADR.
The executive and their compatriots standing amongst us went along with this so it appeared to be public knowledge at least within the hallways at Marriott.
Book Your Stays Now!
Given the rest of the above conversation, I picked a date reflective of other milestones in their new [still unnamed Marriott] program. “So will those new categories and redemption changes roll out by August 1st?” Oh yeah was the response I got. The new categories which by definition will result in at least a partial devaluation of their most expensive properties will occur by August 1st. When that day happens I don’t know, but we at least have this.
So in review – I was right to be suspicious/pessimistic, as was Stefan. While the initial reports were overly positive in my opinion, it’s clear they do intend to charge more than what they have posted in their new chart.
You have been warned.
Are you going to make some bookings for the future before devaluation/new categories are added? If so, what are your target properties? Are you surprised by their move to devalue their brand new program within a few months of launch?
This just confirms that I’m going to burn the points I have in the program and then utterly ignore it as a loyalty platform in the future. Especially when you factor in that credit card earn has been devalued by 33% as of Aug 1.
Burn and turn. Burn your points and turn your back.
So question. I’ve got around 50k Starpoints in my account right now. What would you do with those points?
You mean specific property redemption or burn vs hold? If it’s the former, that really depends on where you plan to travel, I think the Le Meridien Chiang Rai is supposed to be the best value in the system. If you’re asking hold vs. burn, if you can book in advance burn, if you can’t hold and just combine with Marriott points to convert to airline programs.
Why Le Meridien Chiang Rai? It’s category 3 for 7K SPG/nt and goes for less than $100 – so points price is over $220 for a $100 room. I see no logic there.
On the other scale, few MA Protea hotels sell for $260/nt. or 10,000 MA points which equals $70 – you can get more than triple value there.
Some SPG properties has been upped in category in last couple of years, which makes them prone to lower category in the new Marriott scheme.
Didn’t you just do the equivalent of calling an airline about a mistake fare? Leave it alone! If they don’t know their program well enough and leave sweet spots out there to exploit, that’s exactly why we play this game. If you cause them to wake up and they price everything consistently, then what’s the point of reading your blog for tips?
I thought someone might comment that, I assure you, this is a forgone conclusion. Others have already posted at length that there is a whole in the award chart at the top. They laughed and were very arrogant when talking about it. It’s a done deal, trying to give you a heads up.
When I spoke with them about, I was trying to give them an example of how there would still be opportunities in their program and allowing them to highlight those for me. They weren’t interested in such.
Its interesting that supposed professionals in the industry can’t see the value of loyalty beyond a very narrow dollars and cents view. I’m amazed that they can’t seem to comprehend that aspirational redemptions and/or sweet spots in their charts drive loyalty spend that otherwise wouldn’t occur. Loyalty spend that the chain ultimately benefits and profits from. They are stepping over dollars to save pennies.
It’s disheartening more than anything else.
Kyle, it’s disheartening that you are helping them eliminate the sweet spots by educating them about it. From their behavior you saw that they are rude arrogant jerks. Now you are helping them stick it to us.
1) It didn’t stick, 2) They were going to stick it to you anyway, but now you have some advance notice and can burn those points before they burn the program.
+1. Sigh. Grab your ankles. We may be getting hosed, but thanks to Kyle, we know it’s coming. I do hope that this shortsighted viewpoint comes back to bite them, though.
if you’re going to play a travel blogger/expert on the internet, you ought to know something. LM Chiang Rai WAS a great value as a Cat 1, a good value as a Cat 2. It’s a Cat 3 now and no longer a bargain, much less the “best value in the system”. smh
Fair enough, guys. I haven’t shopped Chang Rai since they changed the category. It had been category 1 as long as I can remember.
It’s calling the airline.
Sure, but after the mistake fare is over. The horse has left the barn, they just haven’t pushed the button yet. I wrote this as a PSA because the change is happening.
Tweaking the loyalty program to get people to spend points at a lower value is the easiest way to lower the balance sheet burden. They weren’t about to go through this big exercise and increase the value of their points liability
That couldn’t be further from their minds Mark. It could be anecdotal, maybe there is no devaluation coming and the representative (part of the team that accepted the Freddie on stage) misspoke. But I doubt it both because of the logic behind a change (you can’t decrease the price of your most expensive awards with a change like this) and because of the literal words out of their mouth and the agreement from their co-workers.
“The initial reports were overly positive”, very diplomatic of you. In respect of the bloggers, more like a conga line of brown-nosers, dancing in sync to Marriott’s tune.
At least your original piece ,and one or two others , provided some balance to some of the over-the-top rubbish being hawked elsewhere.
My fellow bloggers feared the worst and were pleasantly surprised to see the program wasn’t completely nuked. That feels like Stockholm syndrome to me, but I also agree with them that it could have been worse.
We will see if my fellow bloggers feel differently post-devaluation.
I am definitely booking now for future stays ……at Hyatt and Hilton. Wish you would have asked why they ignored the high spend / high ADR members by not providing a pathway to top tier via spend (base points ala Hyatt and Hilton).
Yes, the mistake fare is over. But if an executive does not know what a sweet spot is, why educate them on what it is so that they can from here on make sure that their staff eliminates sweet spots? It’s best to leave them alone and not alert them to how to eliminate good deals for their customers.
These executives are our enemies, not our friends. Why are you helping them milk us? It’s like approaching North Korea and tipping them off on how the US is tapping into their communication system. Thanks for helping them make things worse for us.
We have different views on this topic. I don’t think they are our enemies. I thought Aaron Glick was an ally at Hilton and the changes he made during his tenure have lasted (better promotions, Hilton experiences, better enforcement of suite upgrades, etc.), a lot of bloggers felt that Jeff Zidell at Hyatt had their best interests at heart and shaped a program that was adored by many.
In my own defense, I was trying to find value in their program and they were deadset on suggesting that there would be no upside to their program and I was stupid for asking. For example, when I ran into Barclays reps, all very polite, and asked about whether they would bring out a premium card to compete as I left Citi Executive for lack of innovation. They, of course, couldn’t comment on any new products or decisions. But when it was discussed, one of their reps was discussing all of the benefits of the Aviator Silver, how they have an exclusive on EQDs, they offer companion passes when you reach $30k spending, etc. The rep was defending the program they worked hard to build real value in for the sake of getting one more customer. Marriott had no such approach and so when I clarified with specific details, they were perplexed that it could have been a possibility that there was any value left.
I’m not sure what’s stupider- that you pointed out holes to Marriott execs, or that you then bragged about it. Narc.
Doesn’t Marriott already set categories based on ADR?
Yes a change for Starwood, but existing Marriott values shouldn’t change much.
Greg, I don’t think they do based on my anecdotal searches. ADR and point redemption costs ranged in my last search from $.01/point to $.003/point. One blogger commented about another property and showed a $.015/point valuation. All over the board in my experience.
I read this post twice and still have no idea what you’re talking about. Are you saying that before the program changes on August 1, Marriott is going to update the previously announced new award chart through the remainder of 2018 to introduce new, higher redemption tiers during that 5-month time period? That the award chart effective 1/1/2019 will have new, higher redemption tiers? Both? The effect you’re hinting at in the post is very unclear.
New higher categories than the ones announced not previously disclosed. They essentially said “this will be the chart” but then will devalue in just a couple of months and haven’t said anything about it.
For post 8/1/17 redemptions or post 1/1/2019 redemptions or later than that? You make it seem like the 60k ceiling from 8/1/-12/31/2018 will not actually happen.
OK admit to being somewhat in disbelief here – and I am pretty cynical.
Effectively you are saying the officially shown chart on 8/1 is a temporary chart good maybe until end of 2018. They also have a new undisclosed but already internally developed chart will be revealed by Marriott end of 2018 that results in massive devaluations. And this is beyond the announced Category 8 applications and seasonality that have already been disclosed?
If so holy mother of hell. If true it says Marriott is actively lying to the entire SPG and Marriott community and sees no issues with doing so. I am usually somewhat blasé about the reality of devaluations. This though would be a whole other thing – active deceit- and we should all run away like crazy if its true.
My only comfort is I can transfer to Alaska and not get completely crushed in the end.
I really hope this is wrong or I am misunderstanding the post and comments, but this truly would be a boycott level action from my standpoint.
BCF – LPM/LSG
This does not make sense to me. They have announced the addition of Category 8 “Coming 2019”. You’re saying that they are going to announce Category 9+ on August 1st AND make them effective immediately, applying some properties to this category, but Category 8 will stay inactive until 2019. I don’t follow.
The reps I spoke with said that they were adding new categories as of August 1st to shore up category issues for higher end properties where their cost may have dropped as a result of the new program. Their words, not mine.
Steve, I too cannot claim to understand the authors point.
Kyle, if you’re saying that there will not be a “honeymoon period” between 8/1/18 and the end of the year, wherein top tier properties will be bookable for 60K MT, either you misunderstood them, they misunderstood you, or Marriott is doing nothing but blowing a bunch of hot air up the public’s collective ass. The likelihood of the latter, despite their botched and ambiguous rollout, nears zero, regardless of what you think you heard.
If you’re saying that there will be additional categories beyond Cat 8 post 1/1/19, that, too, is contrary to published details of the new program, but could be a bit more believable, if not still deceptive.
At the end of the day, two things are true:
1) these company executes knew little about the program for which they were there to receive an award, and likely misunderstood stood your question (or you, their answer), and
2) assuming the honeymoon period is coming, and all signs point that it is, the other bloggers were right to fawn, notwithstanding any other part of the program. Booking St. Regis Bal Harbour, SR Princeville (or possibly even SR BOB) for 16k SPG warrants fawning. Period.
I don’t think we need to read much into random off the cuff comments from random executives. I’ve worked in enough offices to know this absolute truth: people are just trying to say something that sounds competent. They don’t know anything (clearly), and nothing they’re saying has any actual weight. These are just idiot employees who got roped into representing Marriott at some stupid event, not evil genius talking their evil plan.
One had a bald head, Mandarin collar suit and was petting a shaved Egyptian cat… they introduced themselves as a doctor and kept looking for their son Scott. Does that change your opinion?
Only bank less trustworthy with their currency than a rewards scheme are the Bank of Zimbabwe.. earn and burn, earn and burn.
I reread your post, and I see what you’re saying. I’m going to side with you:
1. The MR exec stated explicitly that new categories were coming at the top (effectively, a devaluation).
2. Then, and only then, did you mention sweet spots, as a *planned* transfer of value to the customer, to their confusion. because they are working to eliminate sweet spots.
3. They countered with the idea that the revamp plan is to eliminate outsized redemptions and excess value/arbitrage.
You didn’t blow any secrets: they ALREADY KNOW about sweet spots and are eliminating them. If the goal is direct revenue maximization, sweet spots are to be eliminated as they are the exact opposite. All you did was ask if they planned on leaving anything extra for customers, and their answer was no. The reason why “sweet spots” weren’t “familiar” is because they see them as a bug, not a feature.
I am honestly surprised that so many people read points blogs, Flyertalk, etc and yet think nobody at hotel/airlines/banks has ever read them. the companies have authorized spokespeople who post in these areas; if it’s public they are aware. The question is rarely “did the company know this massive loophole, that we’ve been discussing for years in public forums, exists?” The question is “does the loophole cost them more to fix than to let X number of customer take advantage of it?” Exhibit A is that the Le Meridien Chiang Rai sweet spot you mention in the above comments went from a Cat 1 to a Cat 3. If Marriott didn’t know it was an outsized deal, it would still be a Cat 1.
Agreed w/the posters saying “GMAB it’s not like you are revealing ‘our’ secrets” here…these are people who actually have the data and look at it daily. No loyalty program will ever weed out 100% of the sweet spots. BA Avios aren’t great for long haul premium cabin travel (where many of us want to redeem)…but it is fantastic for short haul.
It has already been disclosed that some of the super-premium SPG properties (like all-suites villas in Bora Bora) don’t fit in the award chart that well, but I had assumed the new cat 8, making them usually peak season, would cover it.
Now IF this still isn’t high enough, and there’s a NEW cat 9 coming in…then that is some shady BS by Marriott.
Thanks for confirming what was obvious to everyone except the shill bloggers and fanboys on FT that kept blathering about how great the new program is. It is simply a massive devaluation – it won’t all happen in August – some will wait until January and even a year down the road. But 45k cat 9 is clearly going to 90k – say goodbye to booking rooms in London, NY, Paris, SF, etc. at reasonable rates anymore. And the removal of lounge access for Golds (and maybe Plat, who only get undefined “breakfast now”) is an additional slap in the face.
So in hindsight – not so bad after all!