Marriott Promises Members: Your Points are Protected

Marriott is buying Starwood in a deal expected to close in June.

Nothing will change right away. It took two years for Marriott to integrate 100 Protea hotels, and Starwood is more than 10 times the size. The data migration project alone is likely an 18 month IT effort. I’ll still be using my Starwood Platinum status in 2017, I’m sure.


St. Regis Bali

Winners and losers:

  • 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. Marriott Rewards points will gain the value of redemption for Starwood’s portfolio of aspirational properties.

  • Starwood Preferred Guest general members who stay at their hotels may benefit from this merger. Marriott Rewards offers a better rebate for in-hotel spend than Starwood does.

  • Customers who earn points primarily through credit card spend may lose. If the Starwood American Express card goes away, that will be a shame, ending one of the real enduring values in loyalty. I’ve been an SPG American Express cardholder since 2001. American Express would love to find a way to continue issuing their card, but based on the earnings offered by the Marriott co-brand it’s hard to imagine the economics remaining as favorable to consumers.

  • Starwood elite members may lose. Marriott doesn’t guarantee late check-out, promise suite upgrades, or even breakfast at resorts. That needs to change.

  • Starwood lifetime elites may be nervous. Starwood offers lifetime Gold after 5 years at Gold or higher and 250 nights and lifetime Platinum after 10 years at Platinum or higher and 500 nights. What status will they be transitioned to at Marriott, and what will those benefits look like?

  • The devil is in the details for SPG members with big balances. A Starpoint is worth at least 3 times as much as a Marriott point. If SPG is folded into Marriott Rewards, and Starwood points become Marriott points, what ratio will they transfer at? Anything less than 3-to-1 is a devaluation.


W Seoul Walkerhill

The truth is that Marriott doesn’t know the answers to these concerns yet. But their CEO really wants to reassure members.

Sorenson told CNBC that they wanted to create a combined plan that offered everything a guest could want: “Something that is even more powerful for our customers so they’ll say ‘Why should I get a card with anyone else?’”

“We’ve heard from SPG members loud and clear when they say ‘Tell me I’ll be OK,’” Sorenson said. “You’ll be OK. I want to make sure we continue to earn that loyalty.”

Sorenson was reiterating comments he made earlier on the company’s earnings call. “How do you take these two leading loyalty programs in Marriott Rewards and Starwood Preferred Guest and create something which is more powerful?” he said during the call. “The only concern we hear in response to the deal are Rewards and SPG members who want to know their points are protected. The principle reason for the deal is to redouble our commitment to them.”

Reassurance will come from specifics, which they won’t know until some time after the merger closes.

However members aren’t just concerned with whether ‘their points are protected’ but with the benefits offered by the program. Marriott needs to figure out how to match benefits that Starwood has consistently offered to elite members, how to capture the value of the Starwood co-brand American Express card, and how to respect Starwood lifetime members as well as Starwood account balances.

Marriott can begin to earn the trust of customers when it begins to answer these questions.

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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Comments

  1. Spg is toast to quote a recent poster and I agree
    The Iconic program even with its aging warts and wrinkles and it’s positives will likely never be the same in our lifetime
    They were the game changer of the past few decades soon to be mundane and routine
    Whatever unique value proposition or select hotels that had a true value will be dead
    Marriott will wrangle every dollar out of your pocket till you bleed and they will be so large and entrenched they will be hard to ignore
    It’s a big behemoth and they’ve got most travellers pretty locked in
    It’s so scary it’s like waking up from a very bad dream

  2. I think the previous poster is a SPG member. For me I am lifetime PLT with almost double the requirement. So based on that I have been a member for a very long time and have never been disappointed with Marriott across the board. The consistency of their product and the quality of their reward program is great. I have two Marriott and Hyatt both satisfying.

    To add something SPG’s program was good, no question but there was a reason for that, they had to in order to attract and keep members. Their product brand was growing stale across the board, yes there are some great properties, never the less stale.

    While I am not a proponent of all these mergers it is what it is and there was a real reason SPG is going away.

  3. Every moment the CEO delays in finalizing a transfer ratio is costing Marriott $. Because of the uncertainty, people like myself are going to burn those SPG points instead of waiting for an answer. If he wants loyalty from SPG members, he will need to put a fair ratio out there and quickly. A fair ratio will stop the bleed of SPG points. Besides acquiring the portfolio of properties the next big thing is acquiring those members as well. You are guaranteed the portfolio under the merger and contract terms. You are in no way guaranteed any loyalty from members. They can walk away. Love capitalism and competition.

  4. In my office’s reception area they have a TV that had CNBC on, I happened to walk by and caught this interview. I must have looked pretty serious/upset because another person walking by (who couldn’t see or hear the TV) popped their head in to ask if something bad was going on in the news. When I replied “Marriott’s buying Starwood” she just said “oh” and walked away. Clearly wasn’t as bothered by the news as I am… :/

  5. @Ghostrider
    I’m lifetime Plat in both programs. Starwood blows away Marriott in most ways, except points accumulation from stays.

  6. Gary – You didn’t mention SPG’s ability to transfer miles to many different airlines, most at a 1-1 ratio (better when you transfer 20,00 points). Losing that, after all these years of stockpiling for dream trips, would be devastating.

  7. I have pretty much switched to Hyatt whenever possible at this point. I find the Hyatt Grand beds to be more comfortable anyway.

    Marriott should never have been allowed to scoop up Starwood, but that’s our government these days. Facilitating monopolies rather than preventing them.

    I will probably burn all of my points this summer in London. After that, it was nice knowing you, SPG. It’s been great. :'(

  8. I agree with KC and William. Any lifetime SPG Platinum knows that Marriott Platinum is no equal. The only hope is that Marriott will let SPG run separately as they sort of do with Ritz Carlton. If not, I will have Hyatt Diamond as a back-up as SPG will be a pleasant memory, and I will be transferring quite a few Starwood points into Singapore and Emirates miles as a last hurrah.

  9. I have been Marriott Gold for years. The only reason I choose Marriott is b/c my business travel budget requires fairly low cost hotels,. If I had another option I would use it. The service that Marriott gives to its elite me vs if aweful. If there is ever a problem Marriott Rewards will take your call and do nothing for you. They will only “pass your complaint on to the hotel,” and then you can wait weeks if you are lucky for resolution. Requests for like room upgrades and late-checkout (aka things every business traveller needs) are treated like you just asked for someone’s first born. And The overwhelming number of Marriot and Renaissance hotels are just shabby. I envy SPG members their privileges, and I can ABSOLUTELY GUARANTEE that, however long it takes to integrate them, nice it happens, you’ll wish it hadn’t.

  10. I think it will work out fine. SPG has higher end properties than Marriott and thus they generate higher margins and allowing for greater freebies for SPG members to encourage recurring visits.

    That is why the company sold at a premium to book value and to keep those customers Marriott will have to be competitive.

    But time will tell…

  11. I could care less what the transfer ratio to Marriott will be. Given sufficient notice, I will never allow that to occur with our SPG points. Transferring to most airline programs at 1.25 for 20K increments, and transferring 1K increments to top off FF programs for awards, is the only reason we value SPG points so highly. While I don’t believe that our points will be “protected” in the long run, I do hope you are right that we will have at least another year to acquire and transfer them to our FF accounts.

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