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.

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.

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