Marriott, Starwood

Details on the SPG/Marriott combined program

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A big shoe appears to be on the verge of dropping with regards to the much-feared combination of Starwood Preferred Guest and Marriott Rewards following the merger of Starwood and Marriott last year.  This post from gokeeper indicated the announcement will be at 4pm (ET?) on April 16th. It’s been indicated the changes to be announced will likely take effect August 1st of this year.

According to a post on Flyertalk, ColtonATX says that the new tier levels have been decided, as follows:

  • Silver status after 10 nights
  • Gold status after 25 nights
  • Platinum status after 50 nights
  • Platinum Premier status after 75 nights
  • Ambassador status after 100 nights and $20,000 of spend

Lucky at OMAAT adds (or maybe it’s somewhere in the FT thread but I didn’t notice until I read OMAAT) that all earnings will now be 10 Marriott points per dollar (5 at Residence Inn and Townplace) and free elite breakfasts (currently for Gold and above) will expand to 25 properties.

There is also a rumor, based on a call center employee, that April 16th could be the last day to transfer points from SPG to all current airline partners. I want to say I don’t think this is true because it goes way against the SPG grain to pull something so crucial to the program without real advance notice. Not to mention all those that have applied for the SPG Amex recently expecting the option.

And then there is this bit of info later in the FT thread that gets a bit scary: 
Originally Posted by OU812 @ FlyerTalk

FWIW speculation on changes to MR as we currently know it, based on discussion with someone in the know at MR but not privy to final decisions:

  • Names of status levels above Platinum have not been confirmed. MR wants to differentiate status levels above platinum to ensure proper recognition and avoid confusion among front line staff. Working names are Platinum 50, Platinum 75 and Platinum 100
  • Instant recognition of status at all levels upon checkin, with points, free HSI, food & beverage vouchers, and choice of other benefits depending on status
  • Spend requirement for all levels above silver. If spending level not reached, but nights are, status is at appropriate level based on spend.
  • Gold and platinum 50 upgrades limited to preferred level, concierge floor, higher floors, corner rooms, or view rooms at resorts. (No suites!)
  • Guaranteed suite awards (4) per year for platinum 75 and above
  • Guaranteed lounge access only for levels platinum 75 and above
  • Free breakfast at resorts for platinum 75 and above
  • Guaranteed late check-out, 2:00 pm for Gold, 3:00 pm for Platinum 50, 4:00 pm for Platinum 75, Plat 100; resort and conference hotels subject to availability.
  • Platinum guarantees: 48 room guarantee remains, others guarantees are gone (platinum arrival gift, bed type, room type, lounge access, ultimate reservation guarantee)
  • Lifetime status changes coming. If status level not obtained, lifetime status identified in system. New Lifetime Level above Platinum will be added in 2019! Benefits reduced to upgrade to preferred floor for LTG; upgrade, late check-out for LTP
  • Big changes coming to awards! Dynamic award pricing, points required for award night based on hotel room rates at time of booking. No black-out dates, no categories!

This is a LOT to try and take in, especially when it is – and I want to be very clear here – ALL unconfirmed. I assume that next Monday we will get a ton more info.

My hunch is that we are looking at an announcement of changes that will affect Marriott Rewards first, with SPG rolled in for 2019.  That is because a) Marriott is the acquiring company and b) all the changes we see use the Marriott program as a baseline. They couldn’t reasonably change benefits for SPG mid-year and I suspect that even for Marriott the changes will be rolled out in stages – first August 1st, 2018 and then January 1, 2019.

Even then, I think what we will mostly see is a complete picture of how your activities this year across Marriott and SPG will affect your status and associated benefits in 2019. I do not think that anyone at any status will suddenly have benefits removed for the second half of the program year in 2018.

Assuming many of these changes are credible, most come as no surprise. Marriott Gold had been given to SPG Gold which was a taste of the good life, so to speak, because Marriott Gold provided much more than SPG Gold in the form of breakfast and lounge access and real upgrades.  I fully expected more membership levels and tougher qualification criteria to get things like lounge access and suite upgrades.

Let’s also remember that there is expected to be a high-end SPG/MR Amex card launching later this year and I fully expect a $450 annual fee which will include Platinum status (of some level).

But a few of these would really degrade things. First, lounge access only for 75 nights and up is a tough pill to swallow for loyal Marriott elites which are used to this benefit for 50 nights. 2pm checkout for Gold? Wow, even as SPG Preferred Plus years ago I was getting 4pm checkout – something that really made me loyal to SPG.

And for those that have lots of one-night stays? Forget it. SPG’s “stay credit” system looks to be gone and only nights will matter now. That does make sense, though, as SPG’s footprint was small in comparison to Marriott so SPG had to be creative knowing that, often, they just wouldn’t have a property where a loyal member needed to stay.

But the potential nail in the coffin for the entire program?

OU812‘s comment that the program could be going revenue-based.

NO, NO, NO!

This would be catastrophic. Hilton went mostly revenue-based last year, fluctuating the price according to room rate, though they have seemingly kept a max in points of 95,000 Hilton points a night – meaning that you can still aspire to dream properties without needing a million points a night.  That at least keeps the most important thing in the Hilton program – for now.

Travel loyalty programs need aspirational redemptions. 

They need two things, actually. Great benefits that increasingly reward loyalty as you stay more and spend more – and aspirational redemptions.

In case it’s not clear why…. 

The multiple loyalty bands and associated benefits do work to drive incremental spend to the loyalty chain. If I can stay 50 nights in a year with SPG or Marriott I can probably do 75 in the combined program. The extra benefits inspire me to stick with MR/SPG on those nights rather than, for example, test driving Hyatt.

But the aspirational awards are what make me want to earn the loyalty program’s points – and book directly to earn them.

If I spend $100,000 at Marriott and earn a million points, and then one night at a property in the Maldives costs 1,000,000 Marriott Rewards points or if my stay over New Year’s Eve when rates are $1,200 a night now costs 1,200,000 points a night, why exactly do I need to earn the points, exactly?  I can stay wherever it is cheaper and save cash and take my vacations with that spend.  It’s the same reason I’d rather earn any points or miles (or even cash) that aren’t Delta Skymiles… because they move more and more towards pure revenue-based redemption every day, averaging around 1.5 cents per mile in value. Do you want to pay 750,000 miles for a round trip business class ticket to Australia from the US? Unless your answer is yes, you do not like revenue based redemptions.

The way most major hotel loyalty programs work now, I can redeem my points when it’s crunch time. When a whole city is unaffordable to me, I have my points.

Let me be clear, I understand the reasons to adopt revenue-based earning. Spend more and get more. It does, for airlines, make more sense to give more miles to someone that spends more. Same for hotels.

But awards, whether flights or free nights, need to be capped in cost – even if capacity controlled – to be worth earning. Otherwise, it’s just cash back good for use at one hotel chain – and that is worth less than cash.

If the future there isn’t yet written, Marriott, do what you will but keep free night award levels in-tact.

What do you think about the rumors here?  Let me know here, on Twitter, or in the private MilesTalk Facebook group.

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