I receive compensation for many links on this blog. You don’t have to use these links, but I am grateful to you if you do. American Express, Citibank, Chase, Capital One and other banks are advertising partners of this site. Any opinions expressed in this post are my own, and have not been reviewed, approved, or endorsed by my advertising partners. I do not write about all credit cards that are available -- instead focusing on miles, points, and cash back (and currencies that can be converted into the same).
Marriott just announced details of their new single program. As expected Starwood was strong on elite benefits, and we get something much closer to the Starwood program on the elite side. And Marriott was strong on earning and redemption, and we get something closer to what Marriott has offered on the earn and burn side. Perhaps most importantly none of the worst fears that followed Marriott’s acquisition of Starwood appear to have panned out.
The bulk of changes go into effect August 1. From that point forward stays across Marriott, Ritz-Carlton, and Starwood will all count towards elite status in the same program and elite recognition will be provided across most hotels. Points will all be converted at the same rate of 1 Starwood point to 3 Marriott points in a singular currency.
Ritz-Carlton Grand Cayman
How Unification Affects Members
While we’re getting a unified currency and a single set of benefits on August 1, the three programs — Marriott Rewards, Starwood Preferred Guest, and Ritz-Carlton Rewards — don’t technically combine into a single program under a new name until next year. So the substantive changes happen now, the rebranding happens later.
Elite status in a single program means that it’s easier to earn status. You can keep all of your stays with a single chain, and all of those stays count. It also means therefore that more members will be earning even higher status than before and that creates competition for benefits.
When Marriott acquired Starwood we were told they were doing it for scale and leverage with their partners. The same applies to this program. In order to access the best benefits you’ll need to stay more and spend more. But the larger footprint means it’s easier to give Marriott a greater portion of your wallet share. And the new program means in many ways it’s more valuable to do so.
- More hotels for Starwood members
- More aspirational hotels for Marriott members
- Richer earning for Starwood members
- Better elite recognition for Marriott members
There are some things beig taken away. Stay-based qualification under Starwood goes away. Earning a full 10 Suite Night Awards requires 75 nights rather than 50 nights (50 night elites earn 5). Attaining 24 hour check-in privileges will require 100 nights and minimum spend. And it appears there will be a devaluation of previously-accumulated points for hotel stays, especially on the Marriott side, though mileage transfers remain in place at essentially the same structure Starwood had.
Overall for the program going forward this works out to being about as good as we might have hoped for with the bulk of partnerships retained and even Starwood’s lucrative points transfers intact, albeit with less lucrative credit card earn – certainly for miles transfers.
And although stay-based qualification from Starwood goes away in the new program, they will honor the requirements for elite status they had going into the year. So you can still qualify based on stays this year.
I spoke with David Flueck, Marriott’s Senior Vice President of Loyalty, about the changes and he shared,
What we’re incredibly excited about for our members, in August bringing together Marriott Rewards, Starwood Preferred Guest, and Ritz-Carlton Rewards under one program with one set of benefits. We’ve always had the two most awarded loyalty programs in travel. In bringing them together we’re bringing the best of both programs to our 110 million members, one program that provides endless inspiration.
[Historically the program with the best properties and the one where you needed to stay might be different.] We’re where members want to visit and the places they need to stay to earn points and benefits, we’ve broken that trade-off. As one program we’re going to give our members access to the largest, extraordinarily diverse collection of hotels to earn and redeem. We’re making the points richer.
I’m going to walk through all of the changes, and I think it’s fair to say he’s more right than he is wrong on this.
Starwood was a great elite program but weak rewarding in-hotel spend. Marriott was the opposite. Combine the programs and we’re getting closer to Marriott-level earn for the two programs, which is great.
Base earning remains the same as Marriott currently offers — 10 points per dollar (Residence Inn, TownePlace Suites and Element will have base earn of 5 points per dollar). Marriott silvers earn slightly less than they do today. But all other elites earn more. With increased elite earnings at Hilton this makes sense overall.
Increased earn — and Marriott pushing down program costs to hotels — makes you want to look very closely at the redemption side.
Starwood pioneered real reward night availability, if there’s a standard room available at a hotel you can redeem for it with points. Other chains largely followed suit, but Marriott – while offering good availability – isn’t as good at last room availability. Marriott says they’re going to get there, but not right away,
SPG will continue as is and we’ll be moving Marriott Reward toward the SPG model in the future.
Award prices are changing. Initially they’re collapsing Marriott’s categories down to 7, although a higher 8th category will be added next year.
Here’s what redemption is going to look like from August 1. Looking at the changes it appears to me to be a devaluation for Marriott Rewards, and a net improvement for Starwood members. The SPG earn and burn proposition improves on both sides. Although of course this is all dependent on which hotels fall into specific categories.
Here’s a straight comparison of the current Marriott Rewards redemption chart with the August 1 onward chart. Category prices go up pretty well across the board, without any hotels moving in category (other than category 8 and 9 properties perhaps now being in 7).
However I’ve converted Starwood’s redemption chart into Marriott points (so multiplied by 3) and compared their redemption category prices with the new chart pricing and things look pretty good — especially for higher category properties which have been relatively unaffordable under the SPG program.
Fifth night free remains, and cash and points awards remain. Those charts will be released soon.
I asked David Flueck several questions about redemption. He acknowledged that there while “more hotels are getting less expensive in terms of points required” that there “is some movement because tiers don’t line up, and we are sensitive to making sure markets make sense.” My sense is that markets like New York where Marriott is a great value today will see higher redemption costs as they move up in category under the new system.
Flueck indicated that we’d be seeing which hotels map to which categories in 4 to 6 weeks, and that they’re “hoping to share the top markets very soon” and far in advance of that. He also let me know that these charts do not account for pricing at premium all suite properties.
Starwood has charged double for their top category hotels where all rooms are suites, something I’ve complained about for years — their room rates are high because of the accommodations, so they’re in a high category, but because of the accommodations we get charged double points in the high category. We’ll have to see how pricing for these properties shake out once released.
If you have a booking that goes down in price under the new chart, you can call to get a refund of the difference in points price. It doesn’t even require cancelling and rebooking (so you’re ok even if there’s no award space left). Marriott explains,
Members would need to call, but they can then order and attach the new award certificate at the lower price. So, keep the reservation, but change the award “certificate” attached to the reservation. Members could also cancel the reservation and rebook if they so desire given in most cases there aren’t unique asks [attached to a reservation].
Next year we’re going to get a new more expensive category 8 and we’re going to get high and low season prices. Lower category hotels get discounts in low season, while higher category properties will both be discounted during low season and surge in high season.
David Flueck tells me that “We’ll make sure there’s a lot of equity in a market, in general roughly the same number of peak nights as off peak nights.”
Aspirational properties are going to get more expensive again, but not as pricey as they have been with SPG. And high and low season pricing allows Marriott to squeeze out some of the areas where customers would get outsized value out of their points at the top end.
Ultimately the earn and burn proposition is better than it was with Starwood, and while there is likely some devaluation on the Marriott Rewards side the merger has meant actual properties that Marriott Rewards members may really dream about using their points for.
However while earn and burn changes seem relatively balanced both going up, that’s going to be a big negative for already-accumulated Marriott points balances. If you’re someone with a lot of Marriott points today those likely become less valuable. You may want to make bookings with your current points prior to August 1. Another example of why you earn and burn and then re-earn, because your points do not retain their value over time.
This is a part of redemption but deserves a break out into its own section because it is so important. I didn’t think we’d get to keep the rich points transfers Starwood has offered to so many programs. I was wrong.
They essentially have adopted the Starwood airline points transfer structure. They will have “more than 40 airlines” to transfer to, with some airlines that were unique to Starwood and some unique to Marriott surviving into the combined program.
What’s more they’re keeping points transfer bonuses. Today transferring Starpoints into 20,000 miles generates a bonus of 5000 miles. Flueck tells me that they’ve kept this, and simply adjusted the numbers of the new points currency, just multiplying by three.
The only real change is that the credit card itself isn’t going to be as strong for earning as Starwood’s card is today, so it won’t be as lucrative as a credit card spend to airline miles program.
Korean Air First Class
Cash and Points and Travel Packages Remain
We don’t have full details on exactly what these offers look like, but Marriott shares,
Hotel + Air packages which will remain an incredibly rich offer in the new program and one of the best in the industry. Unlike SPG’s Nights + Flights currently, all members will be able to take advantage of packages throughout the portfolio and not just limited to categories three and four under SPG. We’re also making Hotel + Air easier to use by simplifying the mileage options and creating more consistency among the airlines.
For [cash and points], it will remain roughly the same as it is now requiring half in points plus the cash. There will be adjustments on the cash side to reflect the new program, but it should be negligible. We are planning to publish the new chart on our websites in June.
It’s easy to take this for granted since Marriott rolled out an experiences platform similar to SPG Moments already, but the new program maintains and expands on this.
I like redeeming points for travel, never merchandise, it’s almost always a better value to use points for the product of the loyalty program rather than making them go out and buy someone else’s product.
However the exception is where they can use their scale and relationships to access experiences you couldn’t set up on your own. And the combined program offers 110,000 experiences including “8000 moments events only available with points” including their new “Moments Live platform with artists and bringing in culinary talent” — to the extent that they have “over 22 Michelin restaurants in the portfolio, and countless celebrity chefs.”
There are 5 elite tiers. They’re basically keeping the Starwood elite program, shifting around some benefits, and adding in Marriott Silver at the bottom.
Although today you can earn Starwood elite credit on up to 3 rooms you’re paying for at the same time — great for families — however Marriott tells me in the new program “elites will earn points on their own room and two additional rooms” but “elite night credits are awarded for stays elites personally stay and pay for.”
Ambassador and 24 hour check-in benefits provided to 100+ night elites now have a minimum $20,000 spend requirement. So staying at Marriott 100 nights alone isn’t enough to earn top benefits.
The revenue requirement for top status, valued in US dollars, seems especially harsh considering the growth in Asia that Marriott is pursuing and gets from the Starwood acquisition, and especially in the limited service categories, where many hotels are available not for $200 a night or even $100 but even $50 a night.
It seems to me this is especially tough for Asian customers and the China market in particular, though Flueck suggests that “the ambassador service is an amazing experience that our members love, which typically has been for some of our most valuable guests so that’s really where our focus is.” The requirement tells you which guests are most valued.
Here’s the full benefits chart, which I’ll break down in detail.
Here’s how benefits compare:
- Bonus points. Under Marriott Rewards today, Silvers earn a 20%, golds 25%, and Platinums 50%. Under Starwood Golds and Platinums earn 50% and Platinums staying 75 nights a year or more earn 100%.
Under the new program Silvers earn 10%, Golds 25%, Platinums 50% and those staying 75 nights a year or more 75%.
Starwood Golds and 75 night Platinums earn a smaller bonus, but as part of an overall better earn-burn program. Marriott Silvers do a bit worse, and the heaviest staying members do better.
- Late checkout. Golds are reduced to 2pm late checkout subject to availability, everyone at a higher tier gets 4pm. That basically destroys what was the main benefit of Starwood Gold. Everyone else keeps their benefit, which had been ported over to Marriott in the first place after the merger.
- Breakfast. This becomes a choice benefit something you have to give up your check-in amenity for, similar to what Starwood introduced in 2012.
At the same time it rolls out to more brands — Courtyard, AC Hotels, Protea and Moxy — and resorts are no longer excluded. Ritz-Carltons, Editions, Design Hotels, Gaylord Hotels, Marriott Vacation Club, and Marriott Executive Apartments don’t have to feed you. Neither does Bulgari, they don’t participate in Marriott Rewards. Ritz-Carltons and Editions are a disappointment here.
Breakfast at the St. Regis Bali
- Upgrades. Suite upgrades become a Marriott benefit finally. 50 night elites are entitled to standard (or ‘select’) suites when available, which should be thought of as ‘the Starwood benefit.’
David Flueck tells me that the “expectation is that our members are upgraded to the best available room including select or standard suites, and we work with all of our owners and properties to make sure they’re delivering on the member benefits.”
Five Suite Night Awards are given as a choice at 50 nights, and 5 more at 75 nights. This should help to manage demand against availability, but is a cut for Starwood’s 50 night Platinums used to getting 10 (and a real win for Marriott elites who hadn’t gotten any).
Westin Stonebriar Chairman’s Suite Has 8 Rooms
- Guaranteed room type. Starwood used to guarantee you would get the room type booked on paid reservations. They stopped doing that last year. Marriott has never been good about that for non-elite guests. Going forward only Platinum (50 night) members and above get guaranteed room type.
- Club lounge access. As today with Marriott (Gold) and Starwood (Platinum) that’s provided at the 50 night level. Starwood Golds who were matching to Marriott Gold and getting lounge access on Marriott stays lose that loophole.
- Guaranteed room availability. Starwood offered guaranteed availability 72 hours in advance to Platinums. Marriott offered it just 48 hours in advance to their Platinum members which required 75 nights. They’ll keep the less Marriott benefit.
I’ve only ever used this benefit at Hyatt, when they often used to have guaranteed availability at reasonable prices. While there will be some 50-74 night members disappointed to lose this, it’s also available closer in to check-in.
- 24 hour check-in. Starwood introduced ‘check-in when you want’ subject to availability (but confirmed in advance by the hotel any time after booking) in 2012. You could check in at the time desired and check out based on a 24 hour clock. Any check-in 9 a.m. onward still allowed for late check-out. Marriott keeps this benefit, but only offers it to 100+ night elites who also qualify on spend versus 75-night elites at Starwood.
- Ambassador service. A dedicated reservation agent for all Marriott needs is something ported over from Starwood and provided to 100+ night elites who qualify on spend.
Elite benefits apply whether you book directly with Marriott or not. After Hyatt eliminated this last year, Marriott is now the only chain that officially honors elite benefits even on third party bookings. You don’t earn points or stay credit, but you’re still a valued customer. And this will roll out to legacy Starwood properties too.
In order to drive hotel compliance with all of these benefits that are new for Marriott properties one executive tells me “elite satisfaction is a measurement that all hotels are compensated on this year” and that’s something new.
Overall hotels are reportedly excited by the new program, which surprises me somewhat because there was a lot of consternation among owners and managers when Marriott first rolled out 4 p.m. check-out two years ago. Although they didn’t get full details until a webinar that was held today so in some sense it’s too early to gauge that reaction.
Qualifying for 2019 Status Under Current Rules
The new program eliminates stay-based elite qualification, and imposes minimum spend for 100 night Ambassador status. And it does this starting August 1, sort of. You can still qualify for 2019 status based on the current rules in place before the change. But there are a couple of wrinkles.
- You can qualify for status under the new rules, which can be advantageous, combining Marriott and Starwood activity towards elite status qualification.
- But if you’re taking advantage of the new rules, combining Starwood and Marriott stays, you need to do it under the new rules. In other words if you want to qualify on stays you need to do it with Starwood stays only. If you want to qualify for Ambassador status without meeting the $20,000 minimum spend requirement you need to do it with 100 Starwood nights only.
Marriott says, “we will honor all the legacy SPG thresholds for ‘18 achievement.” But Starwood legacy elite thresholds need to be met solely through Starwood stay activity and not combined stay activity.
Someone staying 100 nights at Starwood hotels in 2018 will have an Ambassador for the remainder of 2018 and for 2019, even if they don’t spend $20,000. Someone staying 100 nights at Marriott hotels in 2018, or combining Marriott and Starwood stays, won’t have an Ambassador unless they meet the $20,000 threshold.
Lifetime Elite Status
Lifetime elite status will be honored. Flueck tells me “we will be adopting a structure that’s more similar to Starwood based on the of nights and years of elite status.”
Here’s the new lifetime elite status earning chart:
Current lifetime elites keep their current lifetime status. If you’re close to a lifetime status tier under the Starwood system, you have until December 31, 2018 to earn that lifetime status under the old rules which requires fewer nights.
In the new program you will not be able to earn anything higher than lifetime Platinum (50 night status). Existing lifetime Platinum (75 night) members will be grandfathered as “Lifetime Platinum Premier Elite” (75 night status).
For status under the new system, years of status in both the legacy Starwood and Marriott programs count — indeed if you have status in both programs in the same year, that’s two years of status.
This new program is more generous than the current Marriott program, and I’m told that “anyone who has achieved the thresholds on August will automatically be upgraded to Lifetime Elite status.”
Marriott did a deal with both Chase and American Express for credit cards. Chase gets the bulk of the personal business, but American Express gets to issue a premium personal card. American Express gets the small business cards. And cardmembers keep their legacy products.
On May 3 Chase launches a new personal card — Marriott Rewards® Premier Plus Credit Card — and in August American Express will launch the Starwood Preferred Guest® American Express Luxury Card.
- The Chase card will earn 2 points per dollar on all purchases and 6 points on Marriott spend.
It will include an anniversary free night valid at any property which prices up to 35,000 points and comes with Silver elite status. It will have a $95 annual fee.
- The American Express card will earn 2 points per dollar on all purchases, 6 points on Marriott spend, and 3 points per dollar on airfare and at U.S. restaurants. It will include a $300 annual statement credit for on property purchases, an anniversary free night valid at any property which prices up to 50,000 points, Gold status, a Global Entry credit, and Priority Pass Select. It will have a $450 annual fee.
The current Starwood card effectively earns 3 Marriott points per dollar, and that’s before any devaluation of the award chart. So credit card earning on these products is weaker than the Starwood Preferred Guest® Credit Card from American Express offers today. Award prices may go down compared to current Starwood prices (although we won’t really know until we see which hotels are assigned to which categories) and that may hold the value of spend for earning hotel stays roughly constant. But it means the card is less effective earning miles than before.
In August the legacy Starwood American Express card will introduce the same earning value proposition as the Chase card: 6 points per dollar at Marriott hotels, 2 for everyday spend, and a free night certificate annually for hotels that cost up to 35,000 points. Flueck points out that while the earn per dollar may go down, for those spending less than $35,000 a year on the card they can come out ahead with the new free night — and that those spending more can do better with the premium American Express card.
Meanwhile Flueck says the Ritz-Carlton card “will end up with same or similar value proposition as the luxury card coming from American Express in August.”
Another change is that there will be a convergence of how cards help towards elite status. The basic cards will come with Silver status (and Silver replaces Starwood’s “Preferred Plus” so it loses late check-out). The premium cards come with Gold. Each card offers 15 nights towards elite status and you cannot double dip. The elite night credits from co-brand credit cards are “per member and per account” not stackable across multiple cards.
The Platinum Card by American Express will still offer Gold status.
Marriott says there will be changes to their cards in Canada, Japan, the UK, and UAE as well.
Marriott Platinums Get United Silver … Board in Group 2
Winners and Losers
Marriott customers get great redemption opportunities out of this merger at Starwood’s aspirational properties, and much more elite recognition. Starwood customers get better earn-and-burn and a bigger footprint to achieve and use their status. Marriott members with big balances from past activity may take a haircut.
I asked David Flueck whom he saw as the biggest winners, and he said,
We designed this program with all of our members in mind, part of it our less frequent members will love. We are adopting the Marriott Rewards earn structure. That leads to dramatic increases for anyone that was in Starwood Preferred Guest, their base points are multiplied by 3… for our elite members we’ve really added the benefits most meaningful to them, suite night awards and ambassador, breakfast expanding to 23 brands including resorts.
Al Maha Desert Resort
I see downsides for Starwood Golds losing some benefits, and for Starwood customers who used to qualify on stays. I also see the new credit cards as less rewarding as a tool to earn airline miles than the Starwood Amex has been over the last 17 years that it’s been in my wallet, while the Marriott co-brand increases in value.
There’s a lot I like here. There are things I don’t like. But compared to what some of us feared might happen with the merger the new program details are far better than that.
And these changes leave this as the best ‘large’ program going forward. Based on what we know today it appears better than Hilton Honors and better than IHG Rewards Club. Overall I think Hyatt offers a better top tier elite value proposition but their footprint is literally 1/10th the size.