We have quite a lot to unpack here. There will be plenty of time to discuss the merits of the changes. For now, this post will be largely informational. There are also plenty of outstanding questions, so look for updates here and in future posts as we learn more.
Marriott announced a slew of changes as they align Starwood Preferred Guest with Marriott Rewards going forward. Additionally, the Ritz-Carlton Rewards program is going away as well.
Earning Under The New Program
Most members actually come out better on the earning side in the new program. Smart folks will immediately ask, “Well, what do redemptions look like?” We don’t have all those details. But, we’ll get into what we know so far on earning. Here’s a chart that Marriott distributed that outlines the changes:
The only case where a specific membership tier earns fewer points in the new program is Marriott Silver members. Every other level of membership earns more points. In the case of Starwood Preferred Guest, earning get significantly better. A 50-night Platinum member currently earns 3 Starpoints per dollar spent at a property. That translates to 9 Marriott Rewards points. In the new program, that same member will earn 15 points per dollar. That’s a big change. It also obviously brings up questions about redemption.
Redeeming Under The New Program
Here, we have significantly more questions than answers. The announcement covered a new award chart. We just don’t know what properties will actually cost at this point. We should have that information in August. For now, we have a new award chart with a total of 8 categories:
The chart acknowledges the “Point Saver” model that Marriott Rewards currently offers, using the nomenclature of “Off-Peak” going forward. It also provides some more flex for Marriott to move properties up to a “Peak” category at certain times a year.
The chart doesn’t detail one of my favorite scenarios. Right now, there are certain room categories that exist at hotels which you can’t book online. One of my favorite hotels, The Danieli in Venice, has a number of rooms that are only 1,000 or 2,000 points more per night to book. Considering an entry-level room is 30,000 points, paying an extra 1,000 points a night to get a room on your desired dates is a big win. Since these rooms can only be booked by calling a call center, they’re generally available closer to arrival than standard rooms.
The bottom of the award chart is cheaper for SPG folks. Category 1 hotels under the current program cost 3,000 Starpoints per night. That translations to 9,000 Marriott Rewards points. The new chart shows the cheapest properties will be 7,500 points. They could potentially be as cheap as 5,000 points on the new “off-peak” part of each category.
The bottom line here is that we need to see where properties fall in each category to really judge how good the “earn and burn” equation is going forward. Everyone is earning more points. Those points cost Marriott money. Where do those points go?
This is the area where I really think Marriott over-performed my expectations. I’ve been bracing for Marriott to reduce the value of elite status. Starwood Preferred Guest elites will see very similar benefits to what they receive now. Marriott elites see some good pluses here. Get your magnifying glass out to read this chart:
I could write a post just about the details of elite benefits. Here are some highlights to consider for right now:
- The path to elite status via stays versus nights goes away. This comes as a shock to nobody paying attention.
- Elite members staying at least 50 nights a year will now have an option for breakfast as a benefit at virtually all hotels in the system, including resorts and conference centers.
- Suite Night Awards live on. Members staying at least 50 nights will get 5 Suite Night Awards. Reaching 75 nights will earn another 5 Suite Night Awards. They’ve reduced the number a 50-night elite member receives from 10 to 5. I may still choose this as a benefit if the scarcity helps improve availability.
- SPG Gold members will lose guaranteed 4pm late check-out, moving to a 2pm check-out based on availability.
- Ambassador status sticks around, but picks up a $20,000 minimum spend per year. I have some data here that seems to indicate that the average minimum spend for ambassador members now is much lower than $20,000.
Best of Both Paths
Marriott is taking a path similar to how Hyatt handled their recent changes. You can earn status in 2018 (for use in 2019) through these newly announced paths. However, you can also still use the SPG stay paths already in place. You have until the end of 2018 to do so.
Additionally, the lucrative airline transfer bonus that so many SPG fans celebrate (and I was just discussing on my podcast) stays in place. It over to a higher number of points to get the bonus, thinking back to the 3:1 ratio of Marriott Rewards points to SPG points. That will have a lot of folks breathing a bit easier today.
I’m only going to touch lightly on this. I saw two interesting things at first blush. For starters, the SPG American Express Card will earn fewer points on everyday spending. Those ratio changes might make transfer partners like Chase Ultimate Rewards more valuable to access a broader list of airlines. I haven’t done that math yet. This certainly won’t be my last post on the matter.
The other interesting detail is that the new premium SPG AMEX card will have a $300 credit for spending on property.
Going forward, lifetime status will be honored for folks who earn it by the end of 2018. SPG Lifetime Platinum members (like me) will be match to 50-night Platinum status. Current Marriott Platinum members will be honored at the Platinum Elite level, though that will go away in the future. 50-night Platinum status will be the highest lifetime status that can be earned going forward past the end of 2018.
The Final Two Pennies
As I’m approaching 1,000 words, it’s time to wrap it up and leave some time to breathe. There will be lots more to discuss. Lots. There are even items I haven’t covered from the announcement.
The short version of my opinion here is that this is noticeably better than I was expecting from Marriott. I foresaw more cuts than this. I anticipated more pain points. We need to see how the award charts impact how much a property will cost for an award redemption going forward. Once we have that, we can really start to score this.
For now, it’s a bit of a relief and more information to come.
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