Marriott & Starwood Merger – Time For A Reality Check

---

TravelingForMiles.com may receive commission from card issuers. Some or all of the card offers that appear on TravelingForMiles.com are from advertisers and may impact how and where card products appear on the site. TravelingForMiles.com does not include all card companies or all available card offers.

Some links to products and travel providers on this website will earn Traveling For Miles a commission which helps contribute to the running of the site – I’m very grateful to anyone who uses these links but their use is entirely optional. The compensation does not impact how and where products appear on this site and does not impact reviews that are published.

Now that the Chinese authorities have given their blessing to the Marriott and Starwood merger the two entities are expected to become a single company by tomorrow (Friday 23 September). In the miles and points world this is causing a lot of teeth gnashing, wailing and discontent from some areas and what can only be described as serious denial from others. While I understand the reasons for all of those emotions I think a few people need a bit of a reality check when it comes to what the future holds.

Let’s get two things straight before I move on:

• This isn’t really a merger – Marriott is taking over Starwood. The two companies can call this deal whatever they want but the reality is that this union is Marriott swallowing Starwood up.
• Marriott is a behemoth in the hotel industry compared to Starwood. While Marriott has multiple properties in most major location in the world Starwood does not so Starwood and its customers will be forming just a small part of a gigantic organisation.

Right, now that I’ve got those two things out of the way let’s take a look at what aspect of this merger is causing the most discontent – the loyalty programs.

The gulf between what Marriott Rewards offers guests and what Starwood’s SPG program offers is significant and, understandably, SPG members are worried about what the future holds for their Starpoints and are wondering what kind of loyalty program the combined entities will be offering.

Starwood SPG v Marriott Rewards

Over recent months Marriott Rewards has upped its game a little by guaranteeing Gold & Platinum Elites 4pm check outs and by introducing a concierge service for the very top elites (those who spend the most) but there’s still a big divide between what both rewards programs offer.

Here are some of the more important differences between Marriott Rewards & SPG:

• Right now you can earn top-tier status with Starwood with just 25 stays (which can be a few as 25 nights) while you have to stay 75 nights to earn top-tier status with Marriott.

• Starwood’s Platinum elites who stay 50 nights or more can choose to receive 10 suite night awards while Marriott does not offer its elites any kind of suite upgrade option.

•  Starwood’s Platinum elites who stay 75 nights or more (so the same as a top-tier Marriott Rewards member) also get a great benefit called “Your24” which gives guests the flexibility of choosing a later check-in time in order to get a later check-out time. For example, check in at 9 p.m. and check out 9 p.m. on the day of departure. Marriott doesn’t offer anything like this.

•  Starwood’s Platinum elites who stay 100 nights or more can make use of the SPG Ambassador service where they’re given a personal concierge who becomes their “point person” each time they stay with Starwood. Marriott has no equivalent.

• Starwood’s Starpoints can be transferred to a large number of airline programs at a ratio of 1:1 while Marriott Rewards points have a significantly inferior conversion system.

It’s not all bad over at Marriott – the Ritz-Carlton St Thomas has some beautiful scenery

The Brutal Truth

I have no more information that the next person on what the Marriott/Starwood combined loyalty program will look like….but I do have a good idea of how Marriott operates and what it considers to be important – generous Elite benefits aren’t high on Marriott’s list of priorities.

Marriott knows what works for Marriott and it hasn’t exactly had many issues with its customer base while offering considerably fewer rewards than Starwood and I don’t see this changing just because Starwood is being brought into the fold.

Starwood, like Hyatt, has always had to offer significantly better elite benefits than chains like Marriott and IHG because, purely and simply, they couldn’t compete on size.

You’ll find a Marriott or IHG property in just about every city in the US and in most major cities worldwide so travelers don’t have to go out of their way to be loyal to those larger chains. That’s definitely not the case with Starwood or Hyatt so it’s hard staying loyal to a smaller chain (as I’m finding right now with Hyatt).

Marriott’s take over of Starwood is only going to make them bigger than they already are so I don’t see an incentive for any big improvement in benefits for elites.

A Marvellous suites at the W Bali

Here are a few predictions for the new combined rewards program:

• Top tier elite status will require 50 stays or 75 nights (an improvement of what Marriott currently offers but a lot worse than SPG’s current offering)

• If Marriott decides to introduce suite upgrades (which I doubt it will) it will only be for those who stay 100+ nights in a year.

• The option to transfer points to airline reward programs at a ratio of 1:1 will disappear – there may be a modest improvement to the points & miles awards that Marriott currently offers but I doubt it will be significant.

• SPG Ambassador status will cease to exist.

• I expect Starwood lifetime status to be matched at the appropriate level

• Lifetime status thresholds will be set to Marriott’s current thresholds (750 nights and 2,000,000 points for lifetime top-tier status).

While a lot of SPG members are being realistic about what’s coming there appear to be a few who believe that Marriott will go out of its way to keep them happy – that’s not going to happen.

Marriott is profitable as it is and its Membership Rewards program works very well for the corporation so why change things to keep a few SPG elites happy?

Sure, there may be a few frills thrown in that don’t cost much to provide but I cannot see Marriott adding to its cost base just to keep some SPG members from jumping ship.

Marriott has a proven model that works well (for Marriott) and it knows that SPG elites don’t exactly have a wealth of choices to jump to so it’s holding a winning hand.

I wonder how many points the new St Regis Maldives will cost under the combined rewards program?

Bottom Line

As a Marriott Platinum Elite I’d love to see all the great benefits that Starwood offers migrate over to the new combined rewards program…but I’m very aware that’s very unlikely to happen.

When two companies “merge” it’s almost always the company doing the buying whose culture wins out and I don’t see things being any different in this situation – SPG will be going the way of the DoDo and there isn’t much any of us can do to prevent that from happening.

As an American Airlines top-tier elite I made the mistake of thinking that the US Airways management team that took over American would go a long way to ensuring that I and my fellow Executive Platinums members were kept happy……and look where that got me – a decimated set of benefits and a vastly devalued award chart. That’s the reality of mergers.

If you believe that your SPG benefits aren’t about to be slashed then it’s time for a reality check and time for you to start making plans for what you’re going to do when you don’t like what the new rewards program looks like. Don’t say you weren’t warned.