Starwood Preferred Guest hotels sold to Marriott a couple of years ago. Now, following the first full year of their combined loyalty program, it’s clearer than ever – SPG should have taken Hyatt’s acquisition offer.
SPG Was Openly For Sale
Starwood was struggling for some time. The Sheraton line is dated and needs a refresh, that weighed down the chain at close to half of the total property portfolio excluding Sheraton Four Points, the brand’s select service down line. They needed investments and sought mergers or acquisitions.
A number of suitors looked into the deal including IHG, Hyatt, Marriott and a Chinese Insurance/Investment firm. Their troubles were not down to the loyalty program, despite its generosity. The chain was larger in number of hotels than Hyatt but was otherwise much smaller than the Marriott, IHG and Hilton.
Hyatt Reportedly Had The Highest Offer
While not all of the details were leaked, one was, and Hyatt had a higher offer than any of the other chains. Matthew and I argued about it years ago when I was merely in my infancy as a blogger (though commenters suggest that’s still the case every week.)
Hyatt has a complicated share structure that preserves the original owner (the Pritzker family of Chicago) with special voting rights that SPG had a hard time swallowing. In the end, SPG turned down more money due to these voting rights and took the deal from Marriott for less money.
Marriott “Bonvoyed” a Great Program
SPG was notoriously generous with their elite guests. SPG properties would give the best available suite at checkin to top tier Platinums. That’s not a suite, a junior suite, or a room with a water view – that’s the presidential suite if it’s open. Platinums enjoyed free breakfast across the board, and they aimed to please.
Marriott has Bonvoyed the transition to a combined loyalty program. The chain has made benefits confusing and had trouble enforcing them. Bonvoy has made it nearly impossible to qualify for Platinum’s equivalent status level at just SPG hotels for those who wanted to stay with the brand by increasing them up to 240%. Promotions that were at least competitive in the industry have fallen off completely.
Marriott recently rewarded some elites for their patronage with 30-100 points just for having status. That’s terribly insulting. At a value of about $.004/point, that’s like sending customers who have spent 75 nights with the brand (at minimum $7500) a check for $.12 to thank them for their loyalty. No thanks.
Marriott either has no idea what their customers want or simply don’t care.
The Hyatt Merger Still Makes More Sense
Hyatt and SPG were just a better fit. Marriott already had so many brands, but Hyatt and SPG’s brands were more conducive to rebranding. Some Aloft hotels may have stayed as they were, others might have moved to a Hyatt Place brand. The Sheraton Four Points would have been the same. Andaz and W hotels have a similar concept, as do Westin and Hyatt Regency or St. Regis and Park Hyatt.
Both chains have select service options and business hotels but Hyatt and SPG are top-heavy with more premium and luxury properties than Marriott. Most importantly to travellers, their programs had a similar ethos. Hyatt and SPG not only gave confirmable suite night upgrades to their top elites but they were easy to come by, something Bonvoy has on paper but rarely delivers.
The two just seemed more aligned than Marriott and SPG.
After a full year of Bonvoy, the voices that are still displeased with Bonvoy tend to come from those who were SPG members and loyal to the brand. They want to be loyal to the hotels they love but those hotels are no longer loyal to them. Lifelong Marriott members don’t see Bonvoy for the failure it is because they never had SPG and then lost it. My DeLorean is broken (they all are in fairness) and I can’t go back in time, but I bet both shareholders and certainly SPG loyalty members wish they could to talk some sense into SPG management for taking the Marriott deal.
What do you think? Is Hyatt a better fit for SPG than Marriott? Do you disagree?