The Future of Marriott and Starwood Programs

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As you probably know, Marriott won the right to acquire Starwood in 2015, the deal closed in 2016, and their programs very quickly integrated to a large degree in that you can match your elite status levels from program to program and you can transfer points back and forth at a rate of 3 Marriott Reward points = 1 Starwood point.

Starwood Preferred Guest® Credit Card from American Express

The merging of the two companies began in 2015, but from the beginning of that process the earliest date we have heard for a combined loyalty program was 2018. Now we are half-way into 2017 and we have a further update from Leeny Oberg, the EVP and Chief Financial Officer for Marriott, who recently spoke at the Goldman Sachs Lodging, Gaming, Restaurant, and Leisure Conference. If you are interested, you can listen to this talk online here, otherwise I will outline some of what she said as it relates to the future of the SPG and Marriott Rewards programs and brands.

Neither Starwood Preferred Guest or Marriott Rewards is Likely to Survive

What I mean by neither program is likely to survive is that the stated goal is still to have one combined loyalty program at some point, and Ms. Oberg’s statement was that the combined program will likely have a new name. Marriott Preferred Guest?  I selfishly wish they would keep both programs so we can continue to maximize the strengths of each, but if you are going to combine programs, it is a decent idea to just have somewhat of a clean slate with a new name rather than giving the impression of one program ‘absorbing’ the other.

St. Regis Punta Mita

Late 2018 Is Still a Target for One Program

Late 2018 is still being mentioned as a target for when the very complicated IT capabilities to have one engine running the two programs may be complete. However, she did not promise that target would be met, and hinted at that it could be later. That said, 2018 is still being talked about as a timeline goal for there to be one program instead of two.

Big Changes May Happen Sooner

Even if the IT project side of things takes longer than desired, it sounds like big changes might happen sooner, or at least not later. For example, she said that they can harmonize the programs more before they are truly combined, and make it to where “a point is a point is a point”. This means it is possible that Starwood as we know it could change significantly before it is fully combined with Marriott Rewards. Even if the IT side of things gets delayed, I fully anticipate big changes to the programs to happen no later than the start of 2019. That may sound like a long way away, but remember that 2018 is only six months away, so it isn’t as far as it seems.

Future Credit Card Decisions Aren’t Made, but are Important

It was stated that they are currently heavily engaged in discussions with the credit card companies (Chase for Marriott Rewards and American Express for Starwood), and since those contracts are relatively short (as in years, not decades), they think there is incentive for cooperation and that they will ultimately end up with a stronger credit card deal.

Now as to whether that means there will be dual issuers for at least a number of years like with post-merger American Airlines and Citi and Barclaycard, or whether one bank will ultimately win the exclusive rights, it remains to be seen. Amex just won the right to be the exclusive issuer of Hilton cards beginning in 2018, so who knows if that was a hedge against potentially losing Starwood, or an indication they are ready to go all-in on co-branded cards.

The Worst United States Sheratons are Getting Better

Between Starwood and Marriott there are a whopping 30 hotel brands and they aren’t all spectacular. If you have stayed in many Sheratons, you know that they are not usually the most aspirational properties…and they can be pretty uninspired. Ms. Oberg said that they have taken the bottom 50 of the 200 domestic Sheraton properties based on average daily rate and customer satisfaction, and they are working the owners to improve them. Of those 50, about 1/2 of them are already undergoing renovations, some will leave the system, and they are still in talks with some of them developing a plan for improvement.

My Own Marriott and Starwood Plan

For travelers like us, I don’t think there is a rush to do anything right now since thus far this has been a very thoughtful integration and there is likely still some cushion of time between now and big changes. However, change is coming, and personally I have been making sure to lock in some of my favorite SPG redemptions as my schedule allows. I’m not draining my accounts, but I am also not putting off some SPG points fueled trips that have been on my to-do list such as a return to Westin Whistler and our first visit to the Westin Grand Cayman. Since you can book 18 months out with SPG points, I already have some 2018 hotel stays booked and will likely make a Christmas 2018/New Years 2019 reservation in the next month or so using SPG points…just in case.

Slopeside Westin Whistler

I have had all of the SPG Amex cards including the Starwood Preferred Guest® Credit Card from American Express and Starwood Preferred Guest® Business Credit Card from American Express, but I don’t have either of the Chase Marriott Cards or the Ritz Carlton Rewards Card, so I will be keeping a close watch on the fate of those cards and will attempt to add one or two of those cards and their sign-up bonuses to my wallet at some point before the programs fully combine. Of those cards, reports seem to indicate that the Ritz Carlton Card and the Marriott business card are not currently impacted by the Chase 5/24 rules. I personally recommend that others try to get as many of the Starwood and Marriott cards as they can before any major potential changes come the cards or programs.

I’d love to hear your thoughts on the future of Starwood and Marriott in light of these recent remarks and what your plans are as we move closer towards one combined program.

 

Editorial Note: The opinions expressed here are mine and not provided, reviewed, by any bank, card issuer, or other company unless otherwise stated.

Comments

  1. Do you assume the current SPG:Marriott transfer rate of 1:3 will be executed for all accounts once a single points currency is settled upon?

  2. Thanks for a great summary that helps me strategize. I have had the Marriott personal card for several years and love it. I have never had the Marriott business card. Can I get the bonus for the business card if I currently have the personal card? I need to know because I am near 5/24. Unfortunately, I have had many AMEX SPG cards, so that kills that option.

  3. I would love to see the list of the bottom 50 Sheratons. The Sheraton Clayton Plaza (Clayton, Missouri) is by far the worst Sheraton (or SPG for that matter) property i’ve stayed at. Daily rates hover around $109 and they are clearly paying for tripadvisor reviews. Just atrocious.

  4. I am so glad that you posted about the Westin in Grand Cayman and their great point values. We are booked for next week. I cannot wait. We are flying there on miles and staying on points. Woo Hoo!

  5. My main concern about combining programs is the earn rate from CC spending! $1 spend on my SPG card to earn one SPG point is in no way equal to spending on the Marriott card where if I understand correctly, $1 also = 1 point but a point that is approximately 1/3 less valuable. Any rumors of how this will change?

  6. As a frequent business and leisure traveler (about 1-2 trips per month, in total), I am always torn between Starwood/Marriott and Hilton.

    I want to stay at Starwoods and Marriotts. I find that they are generally “cooler”, nicer, and better run than Hiltons. However, the problem is that I don’t travel enough to earn Starwood Platinum status, and therefore don’t get the free breakfast I get at Hiltons with the Honors Gold status I get via my Amex Platinum card. Also, Hilton is constantly running promotions, making it easy to get lots of Honors points per stay.

    What I’m getting at is that I think Starwood and Marriott could get a lot of business if they offered a free breakfast benefit at an elite status level easily obtainable with credit cards. I know I would seriously consider switching.

    • I am also a Amex Platinum holder and enjoy the Hilton Gold status. I save a lot of money with the free breakfasts as well. The Platinum card can also get you Marriott gold status as well when you link your SPG and Marriott accounts. We get SPG gold with our Platinum cards. Marriott gold also gets free breakfast for two.

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