MAJOR Changes – Marriott & SPG Merger Announcement: Hotelion Reacts

Premise

As you may know, the Starwood and Marriott merger from a couple years ago kept the current programs. However, today they announced that major changes would be coming starting in August of 2018, with more coming in 2019. I could do a summary, but that was covered excellently by the Doctor of Credit, as well as Reddit and Marriott. I read through their posts and wanted to recap some of my initial thoughts. Full disclosure, I’ve swapped over to the Hilton Aspire & Ascend, as I am not able to earn SPG or churn anymore (also that I have a full time job and do not travel nearly as much).

I would encourage you to review the DoC and Marriott details, as it is a decent amount of information. I write this from a Starwood perspective, since that is where my loyalty lies. This is my initial reaction and opinion.

 

New Combined Award Chart!

Initially, it isn’t too bad. It will have 7 categories, with an 8^th top-tier one added in 2019, with base prices ranging from 7,500 to 85,000 points. Note that Starwood will convert at 3x to Marriott points for a one time transfer, so these really are from 2,500 to about 28,000 SPG/night.

However, with the introduction of Peak & Off-Peak redemptions in 2019, there is a new problem – scheduling around peak times. Previously there was very little change (except for Starwood’s higher categories) of booking, and you could reasonably estimate your point cost. These new tiers of price discrimination allow Marriott to capture more of the consumer surplus, and avoid those cheap 3,000 point hotels for $150+ valuations.

On average, Peak is 19.5% more expensive than standard pricing. Similarly, off-peak is 19.5% less expensive than standard pricing, on average. Thus the range of possible point cost is nearly 40%. Yes, I did the math, as that is who I am. Thankfully, they are keeping the Stay 5 pay for 4 promotion that both Starwood and Marriott currently have.

 

Credit Cards

This section just makes me sad. With the introduction of two new credit cards with middling benefits, while also devaluing the SPG card (that I currently have), it leaves me demotivated.

Currently my spend on my SPG card gets me 1 SPG per dollar, which equates to three Marriott points. After August, I’ll earn 2 Marriott points per dollar, for a devaluation of 33%.

They did introduce an annual night benefit of one category 1-5 (up to 35,000 points) for the SPG card, which is more of a “meh”. Is that worth $95? I’ll have to see what kinds of hotels fall in those categories. Or would it just be “pre-paying” the cost of that night? Not sure as of yet.

 

Status Tiers

This one won’t apply to me as much, but there are some critical changes that may affect targeted players. Marriott introduces two new status tiers: Silver, for those guests with 10-24 nights, or corporate/plus status, as well as Platinum Premier, for 75+ nights.

Good news is that they adjusted the bulk of platinum benefits to match the current Starwood tier (50 nights) as compared to the current Marriott tier (75 nights), with 50% bonus points, guaranteed 4pm checkout, and breakfast. They also include 5 Suite Night Awards annually.

However, the bad news is they moved over to the Marriott way of counting status, which is only through nights – not through stays. Previously, you could attain Starwood status through stays much more quickly (25 stays or 50 nights for Platinum) leading to mattress runs. Now, all elite status is earned through nights only.

 

Remainder – Lifetime Status, Airline Transfer, Etc.

The remainder doesn’t apply to me as much – I don’t have anything close to lifetime status, and it is good of Marriott to keep the airline transfer bonus (transfer 60K, get 15K bonus, for 25,000 miles). However, there wasn’t much detail on the current United partnership (would members save 20% there as compared to other airlines on transfer costs?)

 

Merger Announcement Conclusion

I’m concerned. That’s the honest truth of it. I value SPG points highly, but this devaluation and introduction of new award tiers bothers me. I would not put it past the new merger entity to devalue the points even further by moving hotels up a category (if it costs 10K Marriott now to 15K, etc.) and the same for Starwood. Even by rounding up to the next category would be bothersome. However, it would be in poor taste, especially as all the categories and properties were revaluted as recently as last month.

I suppose I just have to burn off the last batch of points that I have. One bright spot is that Marriott spoke in length about the Moments program, of which I am a huge fan. However, it looks like they addition of paid experiences isn’t as useful – I prefer the curated deals, rather than buying something I could get on groupon or elsewhere for a fraction of the cost.

 

 

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