Starwood’s New Terms and Conditions Tell Us What to Expect in the Future

Marriott’s merger with Starwood closed yesterday. They immediately launched the ability to status match and move points between accounts. In Scott Mayerowitz‘s interview with Marriott CEO Arne Sorenson, it was revealed that the very first transfer was from Starwood to Marriott, using points to book a stay in Osaka.

What dictated the 3:1 transfer ratio between Marriott Rewards and Starwood Preferred Guest is the decision to allow members to move points back and forth between the programs.

  • If they were just going to move Starwood points into Marriott Rewards when combining programs later, it might have been tempting to tell Starwood members they’re getting a great deal, they get 2 Marriott points for every Starwood point! And in the process they’d be reducing their liability of accrued points, and some members wouldn’t know the difference.

  • But because points can go both ways, getting 3 Marriott points for each Starpoint also means getting 1 Starpoint for every 3 Marriott points.

  • Had Starwood members only been given 2 Marriott points for each Starpoint, Marriott members would have had a field day moving their Marriott Rewards points over to Starwood and redeeming points for vastly more value (and at a big expense to Marriott). The balance that comes from letting members move points in each direction required a roughly equal transfer ratio.


Presidential Suite, Sheraton San Diego Marina

But what comes next? Marriott isn’t ready to talk about the future of lifetime elite status, their co-brand credit benefits, or what upgrades will look like. For now they made a good first effort.

What comes next at a top level is actually embedded in changes to Starwood’s terms and conditions (Line breaks added for readability):

Effective September 23, 2016 Marriott International, Inc. and Starwood Hotels & Resorts Worldwide, Inc. merged to create one lodging company.

Following the merger, the SPG Program and the Marriott Rewards program and the Ritz-Carlton Rewards program (collectively, the “Rewards Program”), will continue to operate as separate programs until a newly combined loyalty program is launched, which is expected to take place no earlier than 2018.

Until then, the SPG Program and the Rewards Program will each have separate terms and conditions, including those governing how members will manage their accounts, book reservations, achieve elite status, earn and redeem points, the expiration of points as well as the ability to use points with third-party partners such as airline frequent flyer programs.

Stays at hotels that participate in the SPG Program and the Rewards Program will continue to count toward earning points and achieving elite status in the program with which the applicable hotel is affiliated.

There be will a newly combined loyalty program that will be launched and it seems that’s not just for Starwood and Marriott, but appears to be for Ritz-Carlton also.

This unified program may not just be combining Starwood into Marriott Rewards, but could be a new program as I suggested back in April.

Randy Petersen reminded that’s how Starwood Preferred Guest itself was born out of Westin Premier and Sheraton Club International.

Regardless, this happens “no earlier than 2018.” Programs continue independently in 2017, and there’s no guarantee at this point that programs will combine in 2018. The only guarantee seems to be that won’t happen before that and that’s great, because until that time members have choice they can move their points between the two programs to take advantage of the best each has to offer.

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. “What dictated the 3:1 transfer ratio between Marriott Rewards and Starwood Preferred Guest is the decision to allow members to move points back and forth between the programs”…EQUITABLY, based in the relative REDEMPTION “values” and/or EARN rates of the two programs. So, fairness dictated the 3:1 transfer ratio, which favored neither program, since it resulted in starpoints having the same “buying power” in MR that they have in SPG, and MR points having the same “buying power” in SPG that they have in MR.

  2. You had to mention SCI? Really sore subject for me, because my SCI nights were *NOT* counted towards my lifetime status, which is why I have lifetime gold, as opposed to platinum.

  3. With Mariott unwilling to talk about life time status… says it all.

    Loyalty to your customer = customer’s loyalty to a company.

    Should my life time status disappear I will be switching my loyalty to companies like price line and hotels.com. May as well save big $ if hotel loyalty programs are too onerous.

    Personally I dropped IHG from my hotel loyalty and encourage my employees to do so as well. I suspect , should the change I fear happen, I’ll strongly encourage my employees to follow suit.

  4. What we know is that the program in the future will be more like the Marriot program that to the SPG program (elite status harder to get, a million points for a $80 room, etc). So this is not going to end well for SPG members

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