What’s Next After Marriott Gets Final Approval On Their Merger With Starwood?

It took longer than expected but the Chinese government became the final country to approve the merger between Marriott and Starwood.  Quoting from an internal memo:

Today, Starwood and Marriott received notification that our merger has been approved by MOFCOM, the Chinese regulatory agency, marking the last required step for our two great companies to become one later this week on Friday, September 23.

There were some rumblings that Marriott was getting cold feet and might be looking for a convenient way out of the merger.  While I’m sure there were a decent number of people (myself included) who hoped that might be true, I never saw a path where Marriott ended up walking away.

While I’ll mostly be sad when the Marriott/SPG merger wraps up, there are plenty of positives for Marriott members, and things haven’t gotten a little less ugly for SPG members (though still pretty bad compared to the world we’ve been accustomed to).

Marriott rolled out 4pm guaranteed late check-out, albeit in a painful way that did nothing to instill confidence in SPG elite members.

What’s Next?

The big teeth-nashing that SPG members still have to worry about is what their Starpoints will be worth in a Marriott world.  The actual combination of Marriott Rewards and Starwood Preferred Guest is still probably a year away, but we may get a hint when/if Marriott and SPG start allowing members to book award rooms at each other’s properties.

There’s been no firm timeline for developments such as that, but it’s been a typical step in the airline world.  I wouldn’t be surprised to see earning and redemption options pop up early next year, taking into account that Marriott’s computer systems have never really been referred to as cutting edge.

It’s because of the uncertainty surrounding the timeline that members should be burning their SPG points, not maintaining a big balance.  Now is not the time to be saving for your dream vacation a few years from now.  I suspect we’ll be fine with the existing award chart (and next year’s adjustments) until the end of 2017.

At that point, expect your Starpoints will be worth less than they are today, possibly considerably less.  I value my Starpoints about 2.5 times more valuable than Marriott Rewards points.  Because the Marriott Rewards program is so much bigger, I don’t expect the relative value of their currency to change as a result of the merger.  They may allow for a one-time transfer bonus when the two programs combine, though I don’t expect the value to be one that SPG members will love.

Suite Night Awards Will Be Less Useful If They Survive

Suite Night Awards were created a few years ago by SPG as a means of improving the complimentary upgrade percentage of their elite members.  It’s never really worked, forcing SPG to come out with alternative awards.  The majority of the Suite Night Awards I’ve earned over the years have expired, but given the poor value of the alternative choices (valued at about $100), I’ve always stuck with the Suite Nights.

Hotel Danieli, Venice.  One of My Favorite SPG Hotels

Hotel Danieli, Venice. One of My Favorite SPG Hotels

Marriott doesn’t really believe in complimentary suite upgrades.  It’s not a guaranteed part of the loyalty program now and I doubt they’ll add it post-merger.  With so many hotels and such a large loyalty program rolling out a suite upgrade benefit would likely cause some major teething, not to mention complaints from franchise properties about giving up their best rooms for little benefit.

Lifetime Status Will Get Less Valuable, Especially For SPG Platinums

I was much more excited about the prospect of lifetime Platinum status before the Marriott merger was announced.  And, I was definitely excited when my SPG Platinum card arrived in the mail.  Heavy!

Marriott lifetime status is a completely different matter.  Its requirements are much more stringent than SPG, and their top-tier elite status requires more nights per year.  I wrote previously about changes coming with the merger and talked specifically about my concerns surrounding lifetime status:

SPG’s Platinum tier is their top-tier, even though there are different flavors if you stay more nights.  Marriott could make the argument that since that level can be had for 50 nights a year, it matches to Marriott Gold status (their middle tier).  Gold members earn a 25% bonus on base points during paid stays.  You’ll also get free upgrade internet and club access (though not at any resort properties).  Compare that to a guaranteed 4pm late check-out at virtually all properties, 50% more points and suite upgrades (don’t believe it when Marriott tells you they might give you suite upgrades).  It’s easy to see that SPG Platinum is more rewarding that Marriott Gold.

But, even if Marriott chooses to match Platinum to Platinum, awarding top-tier elite status in their program to lifetime SPG Plats, you won’t see much more of an increase in benefits other than a 50% bonus on base points during paid stays.

The Future Holds A Lot Of Unknown

We still have some time to wait before we see what a combined loyalty program will look like.  It’s possible SPG members might not lose as much as I think we will, but I view that as unlikely.  The trade-off will be sold as the big benefit to having thousands of additional hotels to earn and redeem at.  To some degree, that is a plus for SPG members.  But, it’s not enough to outweigh the superior benefits SPG offered compared to Marriott.

While SPG has come back to the pack over the last 5 years from an industry leading place in terms of loyalty benefits, they still offer more value than Marriott in a number of key areas.  It’s a mystery how many of those benefits will survive.

The post What’s Next After Marriott Gets Final Approval On Their Merger With Starwood? was published first on Pizza in Motion

 

10 Comments

  1. Ed as always, love your dialogue. While I truly get you may be an SPG apologist on this matter, any chance you could play Marriott Motivator for a day and diagnose this merger from the other side? Heck, I’m surprised that you haven’t found a way to add Hyatt into this dialogue!!!! #noreally I’d like to see some comments from Marriott members and from you about the addition of SPG to MR rather than just MR to SPG.

    1. Touche, Randy. I’ll have to put together a post. But, off the top of my head, Marriott members benefit from the SPG Luxury Collection, which are all true winners. That’s the biggest plus I see. Partnerships with the US Open and other cool “SPG Moments” could be great additions if they make the cut. I won’t be wearing my Marriott Motivator shirt anytime soon. Mostly because I’m still the original Hyatt Homer.

      1. I’ll add that the biggest benefit for Marriott members is the availability of MANY SPG brands — not just luxury collection — how about Westin!

        Furthermore, the benefit to Marriott Gold elite members and higher is the availability of the above-noted brands of hotels with likely breakfast benefits at most of them!

        Hooray!

        1. Hadley, I definitely think Marriott folks get the better end of the deal here. Breakfast at some of those luxury properties is outstanding. One of my favorites is breakfast on the roof of the Danieli in Venice. Unbelievable: http://pizzainmotion.boardingarea.com/2015/01/05/10-days-italy-hotel-danieli/

          I’ll caution you, there are some tired Westins. Not as many as there used to be, but some work that still needs to be done there. Not as bad as the Sheraton brand.

  2. I predict a gutting of a good program from an SPG member perspective. In the end this won’t be too bad for me.. only gold for life here. It will provide me with the opportunity to explore the world of discount hotel shopping.

    1. holiday, I expect the same. I think there will be some small concessions that they can point to as positives, kind of like the gutting of AAdvantage. But, hey, you’ll have a LOT of mediocre properties in tertiary cities to choose from. Heck, there are 10 properties within 10 miles of the center of Harrisburg, PA.

  3. i don’t get why so many people love to hate marriott. i’ve been plat for years and am usually treated like a valued guest — even when i wasn’t one, which is why i continued to give my business to marriott. i love that there’s a variety of marriotts literally everywhere i need to go — for example, one town i visit regularly (tucson, AZ) has eight marriotts, four SPGs, and one hyatt. depending on my budget, wherever i go there’s always a marriott for me. so while 75 is a high bar for platinum, if you travel that many nights a year it’s easier to hit 75 marriotts than 50 SPGs (this year i’ve tried and failed to keep hyatt diamond after making marriott plat even though i’ve already had 120 hotel nights). with all the marriott bonuses the points pile up quickly, and I’ve never not been able to use points for nights when $$ prices are too high. the only thing that’s missing is luxurious properties — JW feels like a step down from even St. Regis, let alone the luxury collection, and the ritz doesn’t give marriott plat benefits. but other than that marriotts are fine — no need to be/get readers so apprehensive about the merger!

    1. Stacey, I respect your opinion as a Marriott elite, but the two programs just don’t compare in the areas that matter to me. The transfer ratios to the airlines are quite horrible and I just can’t justify 75 nights to achieve Plat given the benefits it comes with. Essentially, I’m getting some extra points and club access. That’s just not enough for me to commit 75 nights to.

      1. yeah, to each their own — for me it’s easy to spend 75 nights at $100-200 properties and get points (for free nights when prices are $500-600), free breakfast (+ light dinner/booze in asia/australia), high-speed wi-fi, free parking at some properties, free local calls, free check-in bag (thanks to crossover UA silver). it would be nice to have a lower bar and get more benefits … hopefully SPGs will jump ship to another chain when the merger happens.

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