Marriott’s CEO Says He Doesn’t Believe in Devaluations. Say What??

Marriott is buying Starwood and Starwood Preferred Guest members are nervous.

Marriott Rewards members are pretty likely to benefit from this merger. Marriott has a long list of properties you can redeem for, but not a ton that you’d look forward to redeeming for. That will change.

Starwood Preferred Guest general members may benefit from this merger. Marriott Rewards offers a better rebate for in-hotel spend than Starwood does. Though the Starwood American Express card is the far, far better credit card offering superior value. I probably wouldn’t even put Marriott spend on the Marriott card. It’s good for the signup bonus and for help towards status, but it offers weak return on spend.

Here are the concerns. Fundamentally the areas where Starwood offers far greater value to members derives from the size of the chain. As a smaller program they need to deliver more value, because it takes more effort for a member to be loyal to Starwood. Marriott doesn’t need to spend as much to promote their hotels because of the chain’s size. And they’re getting bigger.

  • Starwood offers fantastic points to airline mileage transfers. More airline transfer partners, and at a 1:1 rate with 5000 bonus miles when transferring points into 20,000 miles. That almost certainly goes away.

  • Marriott elite benefits are weak. Marriott Platinums are not entitled to upgrades to suites outside of Asia. They do not get breakfast at resorts or Courtyard properties. They do not even get guaranteed late checkout. Starwood Platinums probably can’t expect the entire Marriott chain to reflect better Starwood elite benefits.

  • A single Starwood point is worth far more than a Marriott point (2.5x – 3x?). Assuming Starwood Preferred Guest is ultimately folded into Marriott Rewards, what will the conversion rate be?

There was some excitement last month over four new benefits of Marriott Rewards that amounted to some pretty weak sauce.

Marriott’s CEO spoke directly to members in a new video, and says “Devaluing points or member benefits is not the way to preserve and strengthen these programs.” (HT: @Mommy_Points)

With due respect to the Marriott’s distinguished CEO, I do not think he’s familiar with the Marriott Rewards program.

In 2013 an unhappy Marriott Rewards member even wrote a song about it (to the tune of Les Miserables “Master of the House”).

Marriott Rewards is hardly alone in consistently delivering less value to guests. But there isn’t a lot of credibility here to claim that they don’t believe in devaluations.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. If you could find out WHY they’re even bothering to buy Starwood, that would be awesome. If they want it for it’s uniqueness they should just leave the two as separate entities with a cross-program participation plan for any member who wants to use SPG points at Marriott for example. If they plan to fold it in, they’re destroying the very thing they’re buying….and really are just acquiring real estate and nothing else.

  2. The clue could be in this quote “Devaluing points or member benefits is not the way to preserve and strengthen these programs.” It’s possible that they are simply not interested in preserving and strengthening any of those programs. Transitioning and dilution could be the goal. Just ask Delta. They are the kings of this while positioning it as new benefits added at the request of their customers.

  3. …little to gain here. I am curious how tied or individual SPG hotels or event who brands to the merger. As one SPG employee put it when I mentioned the news “how is that going to work (scrunchy face)”. Can hotels or chains just up and leave, and perhaps move to Hyatt. Would love if Westin hotels migrated. Aloft, Marriott can keep.

  4. First, I’m with @atxtravel in that it’s not a given that, the current SPG properties and brands won’t be watered down to the “Marriott level”. I hope not, but who knows.

    And I’m sure the CEO knows their program is junk. It’s just Orwellian marketing speak at play. Whatever devaluations occur will simply be labeled “enhancements” and “more of what our members want in today’s world” and “to better serve our valued members” and “to simplify the program…” and so on. In other words, they will simply declare everything “not a devaluation” even when it plainly is and no amount of squawking on the blogs and FT will make any difference to them

  5. Not having been a Marriott customer, it seems the chain has some nice properties JW/Ritz but more cheap business hotels and having a one size fits all loyalty program has to tilt towards a more economical budget oriented customer base than Starwood.

    Similar to taking a Meecedes in for servicing vs a Ford, the customer experience and expectation is different as are the car prices and servicing costs. For Martiott this meant tilting to lower end expectations, for Starwood, it meant tilting towards higher end expectations – I always thought I was making out like a bandit when staying at a Four Points or Aloft and getting the same nights or stay credit as when I stayed at a StRegis. It made no sense, but the company having one program just tilted upward. It must annoy JW customers they are treated the same as a Fairfield customer. But Marriott tilts downward.

    With this acquisition Marriott will have scale incentives to create and administer a program for higher end customers and lower end customers.. Namely giving lower end customers the chance for really nice reward stays and a program that allows higher end customers the service they expect.

    Ultimately staying a night at a W needs to be treated differently than at a Fairfield.

    There is tons to write about this concept but it is fairly straight forward, and I would be shocked if that does not happen. Marriott paid to acquire higher end properties and clients and would be silly to waste the opportunity to create a unique and powerful hotel concept.

  6. He wont devalue it. In his mind if you have 100,000 spg points, he will give you 100,000 Marriott points. That is not devaluing. Of course we know its not the points, its the award chart

  7. I’m wondering if we will see properties escape Marriotts clutches when their management contracts expire. I’m sure some have clauses about buyouts, takeovers and rebranding too. Perhaps this is where other chains such as Hyatt et al, could strengthen their portfolios.

  8. @garyleff- If you had 150,000 SPG points and no particular plans for them, what would you do with those points, and when? I’m assuming that allowing them to convert 1:1 with Marriott isn’t one of your answers…

  9. Dude… Learn to proofread or at least how to write without mistakes. Your posts are frustrating to read, especially since you consider yourself the expert of travel.

  10. It’s funny to see many of the poster comments about individual or groups of certain hotels “escaping” the “clutches” of Marriott.

    Don’t many of your posters know that many, if not most, of these hotels are not individually owned properties?

    Instead they are owned by lodging companies, or REITs that have multiple properties and have many properties flying the flags of other lodging competitors.

    They speak as if a Starwood property owner has not experience with a Marriott property, or any other chain.

    That is very unlikely to be true.

  11. @Gary

    Very curious why you say suites are not on the table for properties outside of Asia. Marriott suite upgrades are pretty rare across the board and I’m sure they’re much more common in Asia than in the US but nothing in the program T&C seems to specifically exclude them from being offered in the US.

    Infact the program T&C “allows” for suite upgrades to both Gold and Platinum globally.
    Was your statement a commentary on how it is in reality/practice or are you saying something more worrying (that it is so as a matter of written policy)

  12. 2.5-3?!?!? putting numbers in a blog that bad don’t help. are you really an SPG member who stays on points?!?! where the spg chart has real value is Cat 2 and 3, to a lesser extent 4 and 5. compare a 7k point SPG hotel to a LESS THAN EQUAL MAR nearby- the marriott garbage hotel will be 35k+. they have garbage AC hotels with zero elite benefits that are 20-30k points, while a 4 points down the road will be 3/4k with full breakfast for Plat.

    the way i redeem, it’s more like 7-1, with the absolute WORST being 4-1. and even then, the SPG properties are nicer with breakfast, 4pm checkout , upgrades, etc

  13. @Vineet Marriott does not EXCLUDE suites from upgrades [the way that they used to]. But no Marriott member is entitled to a suite at a hotel in the US or Europe. Every suite in the hotel could be empty for the duration of your stay, and the hotel has not broken any program rule by not giving it to a Platinum member.

  14. As a longtime Marriott Platinum, anytime I request a late checkout, I have received it. While some resorts have only extended it a couple of hours, it has never been a problem.

    Additionally, I can’t begin to remember all the times I have been upgraded at various properties whether I paid money or redeemed points.

  15. As for why Marriott bought Starwood…because Marriott has many ten year contracts expiring and generally has only opened new “franchise” hotels rather than Marriott managed, so it is an economical way to acquire a lot of management contracts (after all Marriott is a management company and not a hotel owner (with few exceptions). Will Marriott maintain SPG/Starwood? No, they will become Marriott’s (given some time) as Marriott is a large regimented company with lots of procedures and check lists- Marriott will not change, it is SPG that will change (unfortunately). And the name Marriott Marty? That was choose. Prior to the 2011 et al devaluations and when MMF (members of Friends and Family) rates still earned points and promotional bonuses

  16. As with Rick above, I have been a long time Marriott Plat and I can’t recall ever having a late checkout denied, and several non-us properties I’ve gone as long as 6pm without hassle or charge. I’ve been upgraded to suites many times in US properties and to Presidential suites at several Asian properties over the years, including one at the JW Marriott in Bangkok when I was a lowly Gold member.

    While it’s true you don’t get free breakfast at Courtyard hotels in the US, that isn’t true for non-us Courtyard properties.

    The reason that I’ve stayed a loyal Marriott Plat all these years? I know exactly what to expect when I stay at a Marriott hotel anywhere on the planet. I cannot say that about ANY other brand, especially SPG where I’ve stayed at some great places and some serious shit holes.

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