If These Rumors are True Marriott Will Destroy Both Their Program and Starwood’s

Yesterday I wrote about the first rumors of a new combined Marriott-Starwood loyalty program coming soon. There would be 5 elite tiers and finally free elite breakfast extended to resort properties and 25 of 30 hotel brands.

It seems like we’re going to know soon enough, in fact there appears to be an announcement coming on Monday. In the meantime we’re hearing plenty about what could be included in that announcement.

While not necessarily in the final version of the program some of the things reportedly discussed in building the program include,

  • Minimum spend requirement for all elite levels above silver. That’s contra yesterday’s rumor about a spending requirement for 100 night Ambassador status only. My guess is that the spending requirement for Ambassador makes a certain kind of sense, but I’m not sure how much upside there is to requiring it at each level other than to copy the airlines.

  • Suite upgrades for 75 night elites only. Marriott hasn’t been good at delivering suites the way Starwood has. And with many more elites in the combined pool, in order to deliver them effectively, they may need to limit demand.

  • Guaranteed suites 4 times each year for 75 night elites. This would be copying Hyatt (which offers them for a smaller chain at fewer nights) and would be a true killer app if availability is uncapped.

  • “Guaranteed lounge access only for levels platinum 75 and above” essentially another indication that 50 night elites just wouldn’t matter under the new program.

  • Free breakfast at resorts for platinum 75 and above What’s so special about resort breakfast anyway? It’s the only time many people have time for breakfast, and many business travelers aren’t getting it reimbursed. Marriott has excluded breakfast where it actually most matters, if they’re going to deliver something the rumor is that they deliver it for customers they think matter.

  • Guaranteed late checkout changes: 2pm at Gold, 3pm at 50 nights, 4pm for higher elites.

  • Dynamic award pricing instead of categories. Can Marriott IT reaelly deliver this in time for a new program? This would eliminate the possibility of getting outsized value for your points.


    Marriott Headquarters, Bethesda

I put less stock in these rumors than in the more modest claims that came out yesterday. However the one message that comes through here, regardless of the specifics that’s in the final program, is that 50 night elites don’t matter.

Remember that Bill Marriott said the reason they bought Starwood was for more clout over their counterparties. That includes more clout over customers.

I’ve long said that smaller chains had to be more generous in order to get customers to go out of their way to stay at less convenient hotels. Larger chains have had to do less, and historically Marriott has had to do less.

Two years ago when I sat down with Marriott CEO Arne Sorenson he asked me why I didn’t believe him that he wanted to offer a better loyalty program than either Marriott or Starwood had offered before. And it turns out his desire for a strong program is that the loyalty program ties together all of their 30 brands, too many brands for consumers to understand, but hoping they won’t care because it’s all part of where they earn their points and status.

However they’re also cutting loyalty program costs for hotels which doesn’t rebound to the benefit of consumers though no doubt is largely funded by the new credit card deal Marriott has with both Chase and American Express.


Battle House Renaissance Mobile, Alabama

Hyatt took tremendous heat for their ‘World of Hyatt’ program changes where they essentially fired customers staying fewer than 55 – 60 nights per year. With a larger footprint it’s easier to concentrate stays with the Marriott chain than the Hyatt chain, but the rumors here are that as Marriott has gained scale it takes 75 nights to matter to Marriott and otherwise members are essentially being fired in the same way.

We’ll learn more soon enough it seems.

(HT: Doctor of Credit)

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. Suddenly LT Gold becomes LT Silver with marriott. Great!

    The difference between airlines and hotels is simple.

    AA killed their reward program but they have the monopoly in my area. I have to fly then most if the time.

    Marriott can kill it rewards program, I will just use hotels.com to book an be loyal to my wallet just as they are loyal to their wallet.

  2. I agree and I say that as a SPG Lifetime Plat. Gary, where would your focus now be for hotel programs, or is it now just time to focus on OTAs and aggregators?

  3. 1) Revenue requirements for a truly global hotelier is absurd because Asia and the Pacific are Marriott’s fastest-growing markets. This is the Asian century. You can get many of the Marriott brands for $30-$50 in Southeast Asia. Without a revenue exception for foreign customers how would Marriott actually do this without losing valuable customers? You could easily do 75 nights in Kuala Lumpur and not spend $10,000. Also, revenue requirements would make counting nights on award stays useless. Remember, this was a big addition to its program Marriott made around 2016. Previously, award nights weren’t elite-qualifying.

    2) I call fake news. Marriott does these culinary nights all the time. Even if there is a new program I cannot believe the program would launch in August.

  4. Right now, Marriott platinum premier is unpublished but most people say they only got it after at least 125 or 150 nights. Ambassador is also unpublished except we know there is no room night requirement. Why would Marriott lower the earning requirement for both of these statuses in its new program? If anything it should be:

    Silver 25 nights
    Gold 50 nights
    Platinum 75 nights
    Diamond 125 nights
    Ambassador 150 nights

  5. I don’t know why everyone gets their proverbial panties in a bunch over the POSSIBLE loss of lounge access for gold elites.

    I’d wager that most international business travelers have either platinum or one of the unpublished statuses. Anyone who has gold probably doesn’t travel to abroad that much.

    As such, most golds are probably only used to the North America lounges. Are there really any good North America lounges? I don’t know of a single property with complimentary alcohol. There isn’t much value, especially if you’re traveling for business and can expense breakfast or dinner.

    Right now, the only value in access to North America lounges for golds is you can eat fried chicken, cubed processed cheese and carrots for dinner for “free” when you aren’t taking cans of Pepsi back to your room.

    I’d rather Marriott give platinum or whatever the top-level is called complimentary breakfast in the restaurant.

  6. Since Bill Marriott appears to be screwing up the loyalty program across his 30 hotel brands, perhaps he should acquire fresh executive talent from the airline affinity programs or purchase an airline so he will be more successful in his race to the bottom.

  7. It’s funny how things have change, five years ago I used to check Orbitz/SPG/Marriott/Hilton websites for hotel bookings, now my first move is VRBO/Airbnb. This helps me solidify that decision. All of these hotel chains REALLY need a strong loyalty program if they don’t want to lose market share.

  8. Seems stupid to change much. It’s not like most of the benefits actually cost them that much. Late checkout, better internet, upgrades etc. They just risk losing customers if they do too much fixing of a non-broken system.

  9. This is very bad news – another Hyatt-like change. These changes will definitely keep our travel spending away from Marriott. I am sure the vocal SPG elites who been pushing for these changes are ecstatic with this change!

    Any word about their reciprocal relationship with United?

  10. I’m really curious what will happen with Platinum Lifetime. I currently have 1,156 nights and 3,329,840 lifetime points. Having just recently retired, I don’t travel on business anymore, but do quite a bit of pleasure travel. Really hope I will be Platinum 75 lifetime!

    Gary, any news or rumors on the lifetime status?

  11. I’m interested to see how they integrate the two lifetime programs. How they combine LT nights between SPG and Marriott along with the associated LT benefits.

  12. I stay where I want and not give a damn about hotel loyalty programs (something I wish I could do with airlines). The only time I ever stay in a Marriott is when I travel for work and it’s always underwhelming (regardless of the brand within the portfolio). Except maybe for late check out, I don’t see a reason to go for hotel chain status…definitely not interested in a free breakfast or a marriott lounge.

  13. Do you think the combination of the SPG credit cards (both versions) and the Marriott credit card will stack elite nights into the new system? Giving you 25 ‘free’ nights towards status. Plus potentially any other new credit card products.

  14. I hate to be a pedant…no, that’s a lie. Regardless, the word is “redound,” not “rebound.” A thing redounds (contributes) to someone’s benefit.

  15. At the end of the day – Loyalty is Loyalty.
    We’ve all been heavily rewarded, sometimes more than we need based on limited nights & levels…we become so used to everything that we come to believe that it’s a right….

    But I actually think the more you stay – the more you should get. 5, 10, even 25 nights for a frequent traveller really isn’t all that much. But 50, 75, 100+ – that’s truly being LOYAL to a program or brand.

    I think that airlines and hotels are coming to realize that the higher levels of loyalty should be rewarded. I remember when CO merged with UA and their programs changed – everyone at the 50K level or less freaked out. It’s the same here.

  16. I didn’t see anything on here about Lifetime Status and how they will address this…?

    SPG is saying on the phone that the LT benefits will be grandfathered in….does anyone know? Do I have to start from scratch?

  17. For me I think I will reduce from three to having only one hotel loyalty elite status to use when I have the need for a late checkout. Otherwise it is best to be a free agent for the lowest price. Just wait for the next recession when the occupancy rates take a dive again and the benefits will return.

  18. My Concern is what will
    Happen to lifetime
    Nights? With my 170marriott and 340 spg nights as status guest- will they merge these and give platinum life time as spg did? Also i am hoping they will honor lifetime gold status from spg in the new program…

  19. Hmm I’ve been gold for the last two years and plat before that. If these changes are true I will likely just go with what as whatever chain has the best price/quality. No more staying at Marriott for upgrades/lounge access. I actually may shift my stays to Hilton so I at least I have a chance at a perk with gold. No reason to keep the amex bussiness plat. I got it to maintain my gold status. So I’ll just go with the CSR in the future. This is a mistake because I went out of my way to stay at Marriott over the years, but no longer. Even if I do book marriott it will likely be through third parties instead of directly from marriott.

  20. “Guaranteed lounge access only for levels platinum 75 and above” = Death Sentence for Marriott. I am Platinum Premier and Lifetime Platinum…but Plat Premier is year-to-year and if Lifetime Plat is Plat 50, it DESTROYS that lifetime achievement!

  21. I’m so close to lifetime Plat with SPG, this is frustrating to read. I doubt it will be as dire as it sounds, but I also doubt it will be better. I always cringe when I hear that a company has bought out a rival to better serve the customers…

  22. “Anyone who has gold probably doesn’t travel to abroad that much.”

    34 countries last year, how about you pal?

  23. I hope ambassador is actually a status (as opposed to plat-100)… i stayed 206 nights spg last year and am embarrassed to say that i hate it when check in person thanks me for my platinum status and says they will try to accommodate my late checkout. Also, have stayed at ritz reserve properties in thailand and bali this year to the tune of about $15k for a combined 4 nights. Huge hole in program that i dont get any points or nights – hope they address that!

  24. Sad to say it, but devaluations are becoming the new normal. There’s plenty of blame to go around:

    1. Corporate profits are up- so are salaries in the brackets that travel. That adds up to more travel generally. Demand is starting to chase supply.

    2. “Travel hacking” has devolved into a credit card pumping cottage industry. The result is thousands of newly minted elites. And thousands more trying to redeem all of those points and “free night” signup bonuses derived from card churning.

    3. Major chains are merging and gobbling up competitors. The new motto will soon become “we don’t give perks to people who spend fewer than 100 nights with us. We don’t have to.”

    The party was nice while it lasted. My guess is that more people will see that elite status as credit card benefits and hotel points as signup bonuses are becoming nearly worthless. You can only play three-card Monte for so long before losing grows tiresome.

  25. I stay at Marriott Properties upwards of 5 nights a year. I will take my Gold Status from the Amex Platinum Card elsewhere!

  26. As a LT Plat with Marriott, really concerned about how this will shake out. Disheartening to work so hard to get something and then potentially have it taken away. Like Worried, I am on the verge of retirement and was hoping to enjoy the benefits of status while traveling more. Never seem to get a suite upgrade but other perks are most appreciated.

  27. Yet another question mark is what happens to cash plus points. In addition…

    While I’m as pessimistic as most here, I could see Marriott retaining some appeal if it retains or even expands (dare I dream?) the unpublished SPG benefit of occasionally offering better rooms (or even suites?) for more points at certain properties. But even if it did, another big factor is whether and to what extent we see a devaluation in the points required for a given stay.

    And as long as I’m departing just a bit from my pessimism, I’d think that it would be in Marriott’s interest to throw in some sweeteners even if these rumors prove true. As others have already pointed out, even with consolidation the hotel industry is not an oligopoly and city-specific near monopoly the way the U.S airline industry is.

    Oh well, just more speculation. I suppose we’ll find out more on Monday.

  28. Why don’t hotels or airlines ever have status achievable solely by dollars spent? It seems that it is always a requirement in addition to a certain number of nights/miles/points, etc. I easily spend in excess of $20,000.00 per year but often only over 20-25 nights, they all seem to want a spend requirement but never a status for straight revenue, why must it always be revenue over a much larger time?

  29. I am going to agree with Patt above and say that this is fake news. I can’t imagine them merging programs not only in the middle of the year, but with 3 months notice.

    That said, I don’t sit in the boardroom when they discuss this stuff, so I don’t know how loyalty plays into revenue. I’m in my 2nd year of plat status and while I am a small fish compared to the road warriors, I bet I spend an extra $1000 a year to stay in SPG properties as opposed to other places which are similar or better quality for cheaper. And what do I get in return? Free fast internet, late checkout, a few extra points and an upgrade maybe 20% of the time. On top of that SPG doesn’t have to pay an OTA because I book direct. Certainly the revenue brought in by people like me exceed what is “spent” on benefits.

  30. The only killer here for me is the dynamic award pricing based on room rate. If they do that adios…. I will cancel all of my Starwood and Marriott cards.

  31. I trust that the SPG Amex cards must not be valuable. Because they are about to lose a lot of customers.
    When Sorenson said he liked the SPG program, did he mean that the SPG program was attractive and MR wants to kill it? So acquire SPG and eviscerate the program?

  32. I have a decent number of points in SPG right now… I haven’t transferred them to an airline yet because I’m waiting to see where I need to fly to, next. Am I at risk of losing all those potential airline points?

  33. Sounds like Lifetime spg Platinums are about to get thrown under the bus
    No worries I am ready to run and take my 20 plus years of loyalty elsewhere
    See ya

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