With yesterday’s announcement of the new merged loyalty program for Marriott and Starwood the reviews are in and they are mostly positive. But I remain suspicious…
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Merger
Earlier this year, Marriott International announced its intent to merge with Starwood Hotels and Resorts. While not the largest hotel company, Marriott will continue to be among the largest.
Unlike SPG, Marriott’s success has come from very few Marriott hotels the chain operates and franchise hotels lead the way for the company, with classic hotels often falling under the Autograph collection. The SPG/Marriott merger almost didn’t happen as Anbang Insurance Group, a Chinese company had made a play for Starwood instead but failed to close the deal.
The new loyalty program, “Marriott Bonvoy” rewards members and elite members for staying across its more than 30 hotel brands. The Ritz-Carlton Rewards and Starwood Preferred Guest programs were run independently from Marriott Rewards to this point. The new system will allow guests to earn points per dollar spent, redeem for travel packages, and other opportunities within the program. Business travelers favored SPG and Marriott for separate reasons prior to the merger.
Suspicious
Yesterday’s well-covered SPG/Marriott loyalty program announcement seemed nearly all positive. Stefan from Rapid Travel Chai was a little less positive and I echo his concern, that perhaps this is not all going to be rainbows and unicorns as presented. It feels to me that the blogosphere, more broadly, was concerned that Marriott would completely decimate the program. Therefore when it wasn’t utterly destroyed, everyone feels pretty good about it.
I’ll get into some specifics, but broadly speaking, Marriot has been far stingier than SPG with benefits, redemption rates and general treatment of elites than Starwood ever was. Further, as a survivor of a company merger when one culture dominates, the others typically fight upstream for awhile and then relent or leave, but the dominant culture usually prevails.
With a footprint as large as Marriott’s and with SPG actively on the market looking for a buyer, it was clear that this was going to be an acquisition and as such there was no need to merge people and ideas. Many Starwood Preferred Guest executives left, Aaron Glick went on to run Hilton Honors before leaving for another opportunity, and a couple of top executives now find themselves at Hyatt. How do you keep the culture of SPG if no one is left to influence such? It’s counter to everything I know of companies like Marriott and Starwood joining together.
Most of the information yesterday was rosy, but too many important details were left ambiguous or just don’t seem to make sense if you were a Marriott Rewards guest.
Redemption Rates
On the lowest end of the redemption chart, SPG members will pay a 25% premium on the worst rooms in the combined company’s stable. It should be noted I am writing this from a Sheraton Four Points in Houston that runs 3500 points per night or roughly a Category 2 hotel and considering my surroundings, “roughly” is the right adjective.
But at the top end, redemption rates are set to drop? The new standard top-level award runs 85,000 (Whatever they decide to call the program) points and using the currency conversion of 3 Marriott points to 1 SPG point (they have stated this will be the transition rate), a 30,000 point St. Regis Aspen reservation that retails at $3000+ for SPG members or 90,000 Marriott rewards points will cost less?
Further, Marriott already values their own properties higher than I would in most cases. For example, would you pay 12,000 Starwood points for a $132/nt Residence Inn Daytona?
How about the same amount for $167/nt boutique in Orlando?
I am less trusting of Marriott’s category pricing and placement for many of their own properties. Moving SPG into those slots seems like it will significantly increase the cost if based on cash rates.
Breakfast Benefits
A big question for top-end elites is the breakfast benefit. Good news for SPG members, breakfast is staying at their hotels including top-end properties like St. Regis. That seems mighty generous from a Marriott program perspective that only as of yesterday will allow free breakfast at Courtyard properties for elites that stay 50+ nights in their properties. They went out of their way to exclude four brands from the new, expanded breakfast benefit list, one of which is the Edition brand. How do you trust a brand that wouldn’t give you microwaved eggs at a $120/night Courtyard but will at a $900 St. Regis? And further to that end, why exclude the Edition hotels, less expensive than a St. Regis for example, and presumably breakfast would be too?
Call me a cynic, but I believe generally that companies make decisions logically and based on cost. There’s no way the breakfast options at an Edition will be superior to the St. Regis, nor less expensive. So why give the more expensive one away while charging for the cheaper one?
Crossover Rewards
Delta, China Eastern, and Emirates Crossover Rewards are phasing out by the end of the year. This appears to be because of the tie-up with United Airlines, but why would the world’s largest hotel chain want to alienate these customers while embracing United? The chain is big enough for two credit card agreements, why not two (or four) crossover partners?
Airline Transfers
This program is staying, with now 60,000 points earning 75,000 points transferring at a rate of 3:1 to airline programs. The program features 40 airlines and this was a highlight of the SPG program, but why would Marriott want to give their customers this option for free? I am untrusting of their intentions and execution on this front. The new program will also offer more point earning on spend for most SPG customers (a certain weak point in the SPG program in the past). But now, Marriott will flow even more of those points out to other programs? It doesn’t seem to make sense to me.
Moments
SPG Moments was a great program, one that I nearly took advantage of placing a softball team at Wrigley Field for a game. Things on my side fell through, but I loved the option to spend points on what I consider to be otherwise priceless opportunities.
Feel free to set me straight in the comments, but I couldn’t find any mention of the future of the SPG Moments program at all. Aaron Glick was able to start a similar program at Hilton before he left, but I have not heard anything from Marriott about this. If it doesn’t get mentioned, I have to assume it is going away.
It All Sounds Good, A Little Too Good…
If you have been reading the blogs from my peers, the overwhelming sense has been that yesterday’s event was a great combination of the two programs. I don’t want to discredit my fellow bloggers, I think many of them have good points. But I doubt that any of them would state that this program is better than SPG was on their own. The one advantage was that now SPG points and Marriott points will be the same, allowing guests from both programs to use their combined points on both hotel chains. In some markets, it will improve as SPG’s footprint was around 1/4th the size of Marriott’s but it will also open the door to Marriott guests who may have been looking for better properties with which to redeem their points. There are a lot of Sheraton Four Points out there that are tired but almost all of them would beat out early Courtyards and Fairfields. In small-town America, these properties may be your only option with Marriott which is better than no options with SPG, but not much better. At the top-end of the chain, Ritz-Carlton hotels will continue to separate themselves from the benefits of the broader program while St. Regis does not. Will this mean an influx of guests at St. Regis properties? Possibly.
The move from stays to nights has been glossed over but it’s really important to me. I currently hold top-tier status with Hyatt, SPG/Marriott, IHG, and Hilton. While I have already requalified for Hilton, halfway there with IHG, 92% of the way with SPG (and thus Marriott) and have left Hyatt to the side. Hyatt was previously my first call program but has since fallen to last because it’s just too difficult to hit 55 nights at their properties given their limited footprint and higher prices. Marriott will now require 50 nights unless I get the credit card, which I may do (giving me a 15-night leg up every year) – stays don’t matter. If you’re an SPG purist and had one of their AMEX cards, you’d only need 21 nights to qualify for Platinum but now that the switch to nights has occurred, holding their credit card will still require an additional 66% increase in single night stays. That’s an awful lot. It’s not as bad as Hyatt’s 140% increase when they made the same switch, but it’s still a huge increase.
It will likely also place SPG/Marriott as lower on my list while I re-qualify with Hilton first, then IHG should I roll nights over. Then SPG/Marriott if I have the card or even with Hyatt if I choose not to carry the card.
Just One More Thing
If you hold an American Express Platinum card, Starwood Preferred Guest Gold is still available. Once your status with SPG is claimed, you can then match to Marriott as Gold and the challenge to Platinum for nine nights. Given the requirements next year, I would say this is a must-do action item.
Read More: Marriott’s Unpublished Platinum Elite Status Challenge
Read More: Important Note on Marriott’s Unpublished Platinum Status Challenge
What do you think? Is my suspicion founded or baseless? Is it just sour grapes or is the program too good to be true?
Kyle, you knocked this out of the park. I am also very suspicious of what will happen to the program moving forward, even with the rosy announcements.
Thanks for the feedback, I will be watching my back (and my points) with them.
Showing which dates you’re searching for in terms of the Daytona and Orlando locations would be far less misleading. The Daytona location LITERALLY lets you walk out to the beach, so 35K seems actually reasonable. The Orlando location is within 15 minutes of SeaWorld and Disney. I would wager that those prices represent pretty low periods in demand, and increase significantly on a seasonal basis.
If you feel the dates were material than I fear I did not make my point well enough. There is not a courtyard in the United States that would be worth my 12,000 SPG points to pay for it. For reference, it was April 25th a week out but a weekday in a leisure destination.
I’m an 8 year SPG Platinum. I reliable have 25-30 stays a year. I rarely stay more than one night. 50 nights will be tough hurdle.
I’m also a former United flier with 1 MM so lifetime Gold (at least until UA takes that away). I lose on all counts here. My Marriott/ SPG Gold is basically worthless given that I value three things: 1) Executive Lounge Access 2) breakfast and 3) Suite upgrades when I’m on vacation, (Don’t care on one night work trips
I’ll have a hard time making Plat in the new program. I would have made lifetime Plat in the SPG program in one or two years. It’s not clear what the requirements will be for lifetime Plat in the new program.
It could have been worse but this won’t be driving me to Marriott/SPG. Maybe give Hilton a shot?
I have had a great experience with Hilton. They are generous with points, breakfast and service with an excellent footprint and lots of upside when it comes time to spend the points on luxurious properties. While they don’t state that you must be given a suite if there is one available, I rarely get a fight as a Diamond, and you can still qualify for that with a status match this year and then just 30 stays the following year.
On the one side, point earnings are going up with the new program, so I guess it’s fair that the redemptions might be a little more expensive.
Personally, I would save my points for a stay at an aspiring property instead of using them to pay for a room that retails at $132.
When you are comparing how SPG was so much better as a program, don’t forget that prior to the acquisition by Marriott, Starwood was not doing so well. Maybe a too generous loyalty program was one of the factor.
Alain, you and I agree completely that more points to SPG members than they are used to will result in higher redemption rates – but that’s not what they have stated, and that’s why I am suspicious.
Your point of saving your points for a more aspirational property is exactly what I am saying, they have aspirational prices on very ordinary products. I can’t see how they are going to continue to charge the same for the Le Meridien Chang Rai (as little as 2,000 points/nt) for a $100-150/nt room when they are getting the equivalent of 6x that rate for a Courtyard in Daytona.
And to your point regarding the downfall of Starwood, it is a possibility, but without looking at their numbers of elites specifically, I have my doubts about this. Suite upgrades on availability are unsold rooms at checkin, they likely would not be sold that day at market rate anyway. The suite upgrades you lock in mirror Hyatt (though not nearly as generous) and Hyatt is doing just fine financially – they actually put in a higher net bid for Starwood than Marriott. Starwood just didn’t like the makeup of the Pritzker shares. Breakfast is also pretty inexpensive, a loaf of bread, some eggs, coffee, and in the case of a buffet, those items are already out there. To suggest that even a dozen elites at a city center hotel were eating so many muffins that it was sinking the business is a pretty big stretch in my opinion. We know it wasn’t because they were too generous in awarding points to those elites based on spend as they were some of the worst in the business.
I do like your thoughts on the matter, you raise some interesting ideas. Thanks for commenting. This kind of open debate is what invigorates me about blogging.
>Delta, China Eastern, and Emirates Crossover Rewards are phasing out by the end of the year. This appears to be because of the tie-up with United Airlines
Or because Delta was asking too much from the deal and the latter two weren’t really driving much traffic?
Also, Marriott Moments is already a thing: https://www.moments.marriottrewards.com. They’ve been offering auctions parallel to SPG’s corresponding site for a while now. I just won one less than two months ago (after I was out-bid on the SPG side).
Jeremiah – You could be right in regards to how much traffic the crossover rewards was really delivering, but then you’d have to clip United out too. And Delta demanding too much might have led to their exclusion and I think you could also say China Eastern as Delta purchased a decent stake in the carrier. But Emirates would counter that argument quickly as I think they would love to stick it to Delta if possible, I am surprised Qatar didn’t jump in the fray. 🙂 I think it comes down to a comfort factor when dealing with one airline that they know and trust and United was that airline. On a net basis, simply because of the size of the Marriott program with respect to the SPG program, the members that had benefited from the United relationship would far outweigh the SPG crossovers anyway.
I will try to update the post reflective of Marriott moments, sorry you didn’t win. Coincidentally, after this went live, I got an email about “Hilton Experiences” undoubtedly in response to my widely-read publication.
I actually did end up winning the same package (and for fewer points!) by bidding on the Marriott Moments version. I’m guessing that there is just a lot fewer traffic on the Marriott side since SPG loyalists are far more familiar with the SPG Moments.
i’m actually guessing the real reason for the RC/Edition vs. St Regis discrepancy might be how their franchisee agreements are coded.
I think Marriott wants to have a consistent experience, but the legal agreements might (i’m just wildly guessing here with no insider knowledge) stipulate a minimum notification period of X months or even X years before such a change could be implemented for RC/Edition.
If i were to make a wild guess, I think marriott probably wants *NO* breakfast at the RC/Edition/StRegis level (or at least much more restricted access criteria), but since current SPG Plats already get it, they wanna soften the blow by not yanking it this time around.
My call – in 24 months time, they’ll offer breakfast at all Ritz / St Regis / Edition (sans Ritz Reserve), but ONLY to Ambassador level.
Henry, that logic makes sense, but I am sure the paperwork says that the program can change its mind, especially if it is officially discontinued – which Marriott could make a case for given that they will have a new name, new benefits, new structure, etc.
Your assumption regarding no top-tier free breakfast because they want to soften the blow is part of the reason I wrote this post, it’s something they will change in the future but they are… ahem… hiding from us now.
Dude.. stay safe. That Four Points is in a rough area.
Haha, there are two and I was at the one not at Hobby Airport. I do have some minimum standards Hal, but it goes to show you what a brand loyalist will do for status.
I was at the Four Points at Hobby a month ago… Sad, sad hotel. The lobby, furniture, airport shuttle, even the complimentary coffee was a hugeess with cream and coffee rings everywhere… everything just felt old and looked dirty. Staff did seem to care. I waited for an hour in the lobby for my room and none of the staff did anything but watch day time television and gossip.
Kyle – Curious why you are trying so hard for IHG Spire – seems like the benefits there are much less than all other chains at the top level, and 75 nights is a very high bar.
Good question Ben. For my day job I often stay in areas outside of major metros so sometimes IHG is the only option. But this year I rolled over 45 nights so I only need 30 to complete and the stays help. Accelerate is pretty valuable to me too given the Kimpton redemptions. But I agree and wrote a post called, Why doesn’t IHG treat elites better? http://bit.ly/2eQLFUT
I am completely with you – Marriott is Marriott and doesn’t change from one day to the other. It rather seems to me that the ugly mormon stepfather from Utah who destroyed my relationship with this Super Pretty Girl has disguised and tries to use smoke and mirror at this point.
In addition to not being able to qualify through stays, for Plat50 like me the SNA benefit was cut by half. Plus and more importantly, the suite upgrades don’t seem to be as much a guarantee as they are with spg. Currently it’s a guarantee to be upgraded to the best available room including (certain) suites. This wording has come very handy at some occasions and this kind of binding character helps to control standards – something SPG was a lot better at than Marriott. It seems that in the future it will be a lot more at the hotel’s discretion and while hotels may find this attractive at first sight it’s a bummer in terms of what customers can expect and if I can expect less from standards, ultimately I will change to some other chain…
Good to see someone else not praising this as highly as many of the articles and blogs I’ve read.
I was very disappointed to read the details about the merger of programs. Not sure why everyone thinks they were good (but maybe as you suggest, they were better than some had feared). But I expected it and guess I should be thankful I got a few more years since the merger to enjoy SPG benefits. Mariott has basically killed any loyalty for the more casual guest. I typically make Gold status with no trouble based on stays (not nights) and am very happy with the benefits (I value the upgrades and late checkout the most – the perks at other levels are nice, but not as enticing to me). But with “Silver” status, neither of those two items will be options any longer, and it’ll take more nights to get to Silver, even with a credit card, than it did stays (with same credit card). So they have completely lost my loyalty. Am I a big-dollar customer? No. But I think there are perhaps more customers at my level than they realize. If I have no incentive to stay with them, I’ll pick the cheapest hotel that fits my needs and stop paying a bit more for a Starwood (or Mariott) property when one is available. Or I’ll switch to a brand that does give me what I value most for less nights – but I would still leave Mariott just out of spite!
I did follow your details about the points values too – and totally agree with your assessment.
Basically, I guess we all have to come to grips with the fact that companies are no longer really “rewarding” you, but just pretending to value your loyalty—same as airlines have done over the last few years. But then maybe they really do make all of their money from the big-dollar customers and could care less about us more casual travelers.
I think a focus avoiding the casual guest will hurt them more than help their bottom line. I had a friend who I got hooked on American Airlines a long time ago. It happened because I was already searching their flights for myself and would send her deals as I saw them. She would spend WAY more than she every should have but only flew a couple of times per year. She did it because she felt comfortable (and frankly because I answered all of her 1.2 million questions) but she turned out to be a great customer for them over the years. Not because she spent $12k and became Executive Platinum, but because she searched them first and paid more to fly them or took connections to give them her business. My father is the same way with IHG. He stayed in their properties out of convenience at first, then out of loyalty and trust in the program. Some 30 years later he never goes beyond 30 nights/year, but 900 nights over a lifetime is pretty good generally speaking. While he might have been a slow burn than other guests (they don’t do well enough for me to concentrate on them) he has been very profitable for them over the years, filling empty rooms that would have otherwise been vacant.
That’s what companies will miss when they disenfranchise the masses. I don’t know that the changes they have outlined are wholesale to that degree, in fact on the surface I think the only one that falls into that category is the petty breakfast omissions and the switch from stays to nights. But it will bite them. When oil prices go back up and airlines aren’t filling every flight, we will see real change from the loyalty programs. The same will happen when people vote with their feet and walk across the street to another hotel chain. It has already happened with Hyatt losing a ton of elites from their changes, meanwhile Hilton enhances their program. I am and will remain suspicious until further notice.
Thanks Kyle for the write up. Very honest and straight to the point . I like your posts a lot – very easy to read and flows well. Is that status match from spg gold to marriott gold still working? I tried the link and it redirects. It doesn’t let me match. Do you have a link that you can share? Maybe I am clicking on the wrong one. The amex upgrade to spg gold link was also down last week, finally worked a few days ago and my account is now spg gold.
Did someone pay you to pen those kind words Angie? I would pick up the phone and call them for the status match now that you have Gold, and I would do it right away. There is so much new information that if Marriott “forgot” to mention that they had disabled this feature, the agents on the phone probably won’t know about it. 1 800 450 4442
Thanks Kyle =) I logged in last night and my account somehow became marriott gold. Woohoo! No call necessary. Btw – I love your wife’s posts too. I’m addicted to your Hyatt reviews. Gives me inspiration for my next trip.
Angie, I’m blushing. I am glad the status showed up for you, and I will tell my wife to keep them coming.
One thing definitely not said BUT definitely heard – no path to status and benefits via spend . A glaring omission when compared to Hyatt and Hilton in that they allow the ability to earn top tiers via base points determined by spend . No recognition of value of high spend guests under the new Marriott program.
I agree with this Mac, however, the revenue requirements (to earn without the stays or nights) were always so high to me that it was never really a factor. You make a good point though, and Marriott might think about awarding some status based on this.
I very much agree with your point about the crazy pricing for objectively mediocre Marriott hotels. I am more of a casual guest, but the SPG program always has been worth my time to stay at and keep points in for cost saving at category 1-3 hotels. But Marriott are not interested in giving fair valuations of their points at this level. So I will change accordingly.
I haven’t really seen or heard anyone say, “What are you talking about, look at this amazing property for hardly any points” on Marriott. They certainly do for SPG (Le Meridien Chang Rai comes up as the best value for money in the program often. They do for Hyatt with the Park Hyatt Mendoza available for just 8,000 points per night or the blogger favorite (I love it too) Andaz Papagyao in Costa Rica at just 15,000 points for a routinely $400+/nt property. Hilton has their fair share too, I found the Conrad Cartagena totally worth 48,000 points or the classic Conrad Hong Kong for 70,000. Even IHG has a sweet spot with some Kimptons as low as 30,000 per night. Where’s the Marriott sweet spot? What property is their greatest deal? Crickets Richard, crickets.
How about the Ritz-Carlton Pacific Place in Jakarta for 30,000 Marriott Points per night, with all rooms getting lounge access?
https://pointswise.ca/ritz-carlton-jakarta-pacific-place-mayfair-suite/
Hey Tyler, your review looks great and I would definitely add that property to my list when I am next in CGK. But you say it in your review, ‘it’s one of the best redemptions’ you have had in the Marriott program. There certainly has to be a good value here and there in the Marriott Rewards program, but we are pointing to a single unicorn in the world’s largest hotel chain. How many more Courtyards at an airport are there priced at the same 30,000 points? I felt like most SPGs were pretty close to the right amount, maybe a little rich from time to time, but nothing crazy. A $132 Courtyard for the same price as your $355 Ritz in Jakarta only further gives me a reason not to trust the program.
Hey Kyle,
I agree, Marriott has a lot of overpriced properties in the US. I would argue that their value comes from properties in Asia, which could be said of most programs I guess. Can’t wait to see how Marriott categorizes the properties with the new program.
Anyway, thanks for the interesting post!
In some respects I’m one of those people like your father. I don’t do enough paid stays to get rewarded on that basis alone so for me the credit card becomes the driver. On that front Hilton offers a very compelling value especially with the new card that was just introduced.
I had begun accumulating star points primarily because with the airline transfers it made it a compelling currency for daily spend. This of course led to me looking beyond Hilton more and for Hotels with SPG. However, with the changes that are being made to the points you can accumulate via spend cutting that by a third I no longer see value in this program for me.
Which means once A redemption opportunity appears I’m going to cash out and exit stage left. Marriott will never notice I’m sure but as you noted people like me can become steady sources of revenue over time and it’s a missed opportunity for them.