When Marriott announced details of their new program they introduced an award chart where at least some rooms at every one of their hotels would be available at a rewards price no higher than 60,000 points.
There’s a 4.5 month period where you can book the St. Regis Bora Bora, the St. Regis Maldives, Al Maha Desert Resort, and many more at this price.
But remember they told us from the get go that they would offer this kind of great value only through the end of the year and that next year they’d start charging up to 100,000 points for their best redemptions with the introduction of a new category 8 along with low season and high season prices.
Meanwhile it takes more nights and more spend to get the same benefits that Starwood members were used to.
- Starwood 75 night elites lose their ’24 hour check-in’ option next year, since that’s a benefit reserved for the top elite level.
- Starwood 100 night elites who do not spend $20,000 in a year lose their dedicated Ambassador contact.
- Starwood Golds (25 night elites) lose guaranteed 4 p.m. late check-out.
That said this is a better program than their biggest competitors offer. Even come next year, Marriott will offer:
- More premium hotels than Hilton or IHG
- Better elite benefits than either Hilton or IHG
- Better pricing at some of the top legacy Starwood hotels than was offered prior to the merger, albeit with more restrictive inventory.
Al Maha Desert Resort
The Marriott program is better than I expected it to be when the chain acquired Starwood. But don’t be lulled into complacency that this year’s experience is what you can expect. We know that things are as good as they’ll ever be right now because Marriott told us so.
My model at the outset of the merger was that Marriott didn’t need to work as hard at loyalty as Starwood or Hyatt because of their size The smaller programs had to entice customers to go out of their way to stay with their chains, so it was no surprise that larger chains like IHG and Hilton did less for members. And the merger made Marriott bigger, not smaller. The deal was done for size and leverage over online travel agencies and other counterparties, and that includes customers.
It’s what I told Arne Sorenson when he asked why I didn’t believe that he was going to offer the most generous loyalty program in the industry. If he had wanted to do so he would have done so already.
Still the program is better than what I expected the outcome to be. Sorenson’s bet was:
- that it would be cheaper to offer a good program than to spend marketing dollars for each of their combined 30 brands individually.
- Plus all that sweet sweet bank co-brand money.
And Marriott does have a program Hilton (no promise of suite upgrades or guaranteed late check-out) and IHG (which doesn’t even promise most elite benefits on award stays, club lounge access, or breakfast). If you’re Marriott why be even better than that?
Marriott executives are good operators. They control costs. And the new program is less expensive for owners than the old one. Starwood was good at marketing, not costs.
The takeaway from all of this is two-fold.
- If the Hyatt footprint works for you, you should focus on Hyatt though they’re far from perfect. The elite program is better than Marriott’s. I really do think it’s criminal that Marriott launched their new program August 18 and Hyatt didn’t pounce with a status match offer to Marriott Platinums.
- If the Hyatt footprint doesn’t work for you, if you travel places where Hyatt’s aren’t or where they aren’t convenient, then you should focus on Marriott — but be realistic about what you’re getting after the halo (such as it is with the rocky transition) wears off.
I’m pleased with the changes – and adding the Starwood properties makes it possible to find excellent accommodations almost anywhere I travel in the U. S. But I maintain top status with Hyatt and Omni as well. Given the choice I will usually stay at one of those two properties unless there is a compelling reason (nicer property, convenience) to stay at a Marriott brand. If Hyatt’s upcoming partnership with Small Luxury Hotels comes about as hoped, it will add to Hyatt’s overall appeal. To be able to get award nights at international luxury properties will greatly add to Hyatt’s appeal.
Would it be possible to make a booking at a specific property for some ambiguous dates next year to lock in the better redemption rates and then just modify the reservation once plans/dates become more solid??
As a self funded traveler (and lifetime Plat) all I can say is thank God for Airbnb and independent hotels. The benefits I get are diminishing and the cost/benefit ratio for me is not in favor of a program that delivers less and costs me more time and grief 🙁
Thanks! Just canceled a five night stay at the St Regis NY that cost me 140,000 SPG points back in June. Reservation for November. Rebooked with Marriott points at reduced rate. Cost total of 240,000 Marriott points but got back 420,000 points (140,000 times 3). 180,000 points in the bank. Sweet!
As I’ve said before, I was a Starwood loyalist pre-merger, favoring Starwood domestically and abroad, while I also stayed at Hiltons abroad and at Conrad or Waldorf-Astoria properties in the US. Marriott was a distant third, and — solely due to its footprint — Hyatt is fourth. Long an SPG Gold through the number of stays annually, and Hilton Gold through holding the Hilton Honors Amex, but now — post-merger — I’m presently Gold with “Marriwood,” and Diamond with Hilton (upgraded to Hilton Aspire). But semi-retired as I am, I doubt I’ll have enough nights at Marriott/Starwood/Ritz-Carlton (and you can no longer qualify on the number of stays) to maintain Gold status, so I’ll drop to Silver there.
While top-tier elite v. top-tier elite, head-to-head, Marriott may be the better program, Hilton Diamond is better than Marriott Silver…
What is the mix of high to low end properties of:
Legacy Starwood
Hyatt
Legacy Marriott
Hilton
My guess is Lebacy Starwood and Hyatt have a higher end mix than Legacy Marriott and Hilton.
Footprint is part of the story but the larger part of the story is that higher end properties have more margin to support a more generous loyalty program.
Seems as though the new Marriott program is better than the old one – definitely Not due to a footprint issue. The more generous program results from higher overall property margin to fund the more generous program.
Also due to the discerning SPG customer base that Marriott can’t appeal to with the (mediocre) legacy Marriott Rewards program.
Again – Marriott customers make out like bandits with this “merger”…a much better loyalty program & a ton of new aspirational/resort/better/boutique properties to stay and redeem at.
What is the mix of high to low end properties of:
Legacy Starwood
Hyatt
Legacy Marriott
Hilton
My guess is Lebacy Starwood and Hyatt have a higher end mix than Legacy Marriott and Hilton.
Footprint is part of the story but the larger part of the story is that higher end properties have more margin to support a more generous loyalty program.
Seems as though the new Marriott program is better than the old one – definitely Not due to a footprint issue. The more generous program results from higher overall property margin to fund the more generous program.
A company such as Starwood trades above book value for its actual or expected ability to generate returns above its cost of capital.
Starwood’s spg program attracted a loyal customer base allowing it to generate strong returns in part because of its loyalty program. If enough dog defect to Hyatt as I will, this acquisition will be a bust.
Staying at a Westin has very different economics than staying at a Springhill Suites. Marriott’s inability to recognize that cost them my business and I suspect many other >75 night per year spg plat+ members.
@ Gary — All our former Marriott/SPG points now sit at Miles&More, where they are far more useful. As a Senaor, you can’t beat the premium award availability, and the companion awards make the award chart pricing excellent, especially in business class. Marriott/SPG has always been inferior in my eyes, so no loss to me here. I am very happy with Hyatt and becoming less happy with IC RA.
1) I agree that Marriott members are getting a better program after the merger.
2) There is a no evidence of that for SPG members. Even before the merger the SPG Program
was getting less attractive for SPG PLTs. Do you remember SPG PLT re-qualification gifts and also time when one gets upgraded at Westin Surfrider or Sheraton Waikiki?
3) I also agree with Gary that the combined program will only go downhill from where it is now with the next point devaluation hitting in Jan.
4) Can we hope that IT issues will be resolved by Jan.1, 2019 or that is too optimistic?
5) Where is the grand new bonus offer to celebrate the highly anticipated and the extraordinary successful launch of the combined program on Aug. 18?
As a long time Marriott loyalist, I’m sure some time in the future that I will miss the days that the disaffected SPG loyalists vented their frustrations with Marriott and combined program.
However, until then, I will just enjoy all this wonderful and entertaining schadenfreude!
Good post. I’m happy for the Marriott loyalists, as they now get a decent loyalty program. As a Starwood loyalist, I just wish that Marriott had been honest rather than deceptive about how bad the new program was going to be for us. Now we know, rather than strongly suspect, that Marriott just can’t be trusted. Being forthright would at least have earned some respect for honesty.
Is there an easy way to search award availability for Marriott’s? (Like there is for Hilton where you can search flexible dates…) I have my flights booked to Tahiti, but can’t find a single opening on points at the St. Regis Bora Bora or the Le Meridian. I have other places booked, but was really hoping to burn some of my Marriott points.
The takeaway from all this is that reduced competition by way of mergers of large companies (at least in an industry like this) ends up costing consumers in the way of additional price hikes and/or reduced benefits. I expected that, and Marriott is delivering to that expectation.
The company management’s way of justifying acquisitions to its shareholders and the financial markets rely upon squeezing a lot more money out of its customers, and from its suppliers/partners and perhaps even its employees, in one way or another from the acquisition.
Gary, I get your point about Marriott being larger now and not needing to work as hard to acquire customers, but I’m curious whether Marriott has reached a point where the opposite is true. Has Marriott become so large that its customer acquisition costs will increase? In other words, there are diminishing returns to each marketing effort, and a program as large as the new Marriott will require a higher number of customers (Marriott now has to find a way to sustain 30 different brands, most of which will be competing with each other in many markets). It seems to me that Marriott is going to have to keep its rewards program more competitive than we might have originally thought.
Marriott thinks that they are too big to fail and they will do whatever they can to make this a race to the bottom. Don’t trust Marriott. Consolidation is bad for the customer. Ditch Marriott because they need the competition.
Very interesting. You have some good insights there. I’ll disagree with a couple of points you made. (Admittedly I’m nit picking.)
The deal may have been done partially for leverage over the OTAs, but that isn’t the only reason. Marriott mouthpieces have said that part of the reason for buying Starwood was to gain the rabidly loyal SPG members. So far Marriott has bent over backwards to keep them happy, but obviously that is changing now.
Another takeaway is the suits at Marriott claiming the new system is cheaper for the owners. That is what I’d expect them to say, but the suits didn’t say cheaper, they said more “cost effective.” I disagree. Marriott execs have stated in interviews that they are expecting more, not less, from the owners. Since they expect more, the only way the new program will be more cost effective is if the payoff changes. I suspect (I have no info) that with the horrible new redemption chart and the horrible new travel package price, Marriott is expecting the owners to have to shoulder fewer redemption nights.
The proof of the pudding is in the eating…and while it’s still far too early to come to any firm view, the initial bites have been pretty sour. The sheer lunacy of the timing of the launch had raised eyebrows in advance, and those concerns proved to be well-founded given the IT fiasco that ensued.
You are so right about Hyatt missing the boat on pinching top tiers. But that’s ‘very Hyatt ‘…never miss an opportunity to miss an opportunity. Bridesmaids in perpetuity.
I’ll go along with the new program for now ,and test the water with a few stays. If they don’t deliver as promised it’ll be disappointing but not surprising….but there are many alternatives available.
Works for me. SPG was crap for anyone below Plat, poor ROI even with high rates. The pre-merger Marriott was great for the occasional Gold traveler (thanks to UA status match) – post-merger not as good but much better for SPG earn and redemption. Burn your points over next 5 months and you’ll be good for a while.
@ Boraxo — SPG was crap for Platinums, too. Begging for suite upgrades? No thank you. Next.
@Joseph N. – that was an ex-post justification, initially they were SURPRISED by the passion of SPG members. The initial explanation for the merger was scale.
I think what a lot of people are ignoring are the significantly increased earning rates for SPG members. For those of us in the top category, the spending required for one night at a top ranked hotel has gone down from 8750 USD to 4857 USD at standard (and 5714 USD at peak) rates. And this now includes all suite properties. I, for one, am really looking forward to this.
@Oliver – that analysis doesn’t hold as much water given the decline in Green Choice and Platinum Amenity points…the spread is a lot less
UA-NYC,
You are indeed correct. Marriott’s adjustments to the loyalty programs operation were meant to squeeze more money out of the loyalty program customers and to reduce the marginal costs of the loyalty program operations and thereby increase its aggregate returns for the company.
Marriott’s cost of the rebate given to customers — in the form of the loyalty program currency — has been targeted for aggregate cost reduction. In other words, customers in the aggregate — even those who were Platinum at SPG — will get less for more from the new program as Marriott wants to maximize its margins/returns from the program integration/operation to deliver what its management and shareholders want.
A few things not covered that I view as huge downsides:
– No more UA Silver status for the 50-74 night crowd, which is where I fall in most years. Of course, United loses in this because I no longer have an incentive to fly United.
– Competing with the gazillion Marriott members for free nights and upgrades at the nice properties I like to stay at vs. the overall much lower quality of Marriott.
– Terrible booking engine.
– Having to filter out 15 brands I’d never want to stay at when booking. I’d love a preference where I can exclude fairfield, residence, spring hill, etc. (I’d love to have a preference in flight searches to ignore spirit and have it stick across sessions.)
Hyatt will offer their status may hnnext year when marriott’s program is not as good
I made it to Platinum a couple of years in a row with Marriott, but started losing confidence with their program. The benefits were nice and tended to be consistent, but it’s the little ‘gotchas’ that Marriott is famous for. Such as:
-All charges at Marriotts will contribute to points accumulation — except for Springhill, Courtyard, Residence, Fairfield.
-Breakfast complimentary at some places, not at others and if there is a lounge, you can only get it in there as opposed to the restaurant.
-Not all properties earn the same points such as Fairfield earning 5 points as opposed to the standard 10 that Hilton does everywhere.
Then there were the bonus gimmicks:
-“Earn 1000 points per night” “Starting on your third night” “After your second stay”
-Earn double points per night. Starting with your second stay. Then every other stay.
They were also lacking quite a bit in the technology side. I give them a pass here as they were planning the merger, but Hilton gives the ability to choose your own room, request arrival items, and use your phone as the key to access the entire building and your room. Marriott is really far behind in this realm doing things quite the old fashioned way with going to the front desk and waiting in line.
I stayed away from them this entire year and to learn that breakfast will be even more restricted, Gold status is becoming completely useless, they are installing cheap-for-them-and-dirty/filthy soap dispensers instead of individual toiletries, I am quite turned off to them.
Meanwhile with Hilton I get on average about 4000 points per night as I’m Diamond and they are forever running promotions. That’s not counting the AmEx Hilton card I have which generates even more. I’m getting 4500-5000 points per night total, sometimes much more.
I guess Marriott had to worsen some things, but they seemed to have hit hard the SPG elites and pretty much destroyed any benefit to their own mid-tier members. Not sure what goal they are going after — clearly it’s not those groups.
Gary so what should we do? Every time I log into Americanexpress.com now they want me to upgrade to the SPG luxury card, and for $450/year the lure of 100k points just isn’t there. I still feel throttled from August 18th.
Yeah, if they want me to sign up for that luxury card, they are going to have to offer me a heckuva lot more than 100k points. Heck, I got 70k + a free night for signing up for a regular Marriott card, back in the day when Marriott points were worth twice (at least) what they are worth now.
I’ll second what Estelle said about self funded travelers using airbnb. I’m also a self funded traveler, and the value proposition of maintaining my platinum membership with Marriott has absolutely plummeted the last few years. The cost/benefit equation of elite membership has also plummeted at Hilton, Hyatt and IHG, just not as badly as at Marriott. Does Marriott secretly own part of VRBO or Homeaway, because it seems like they are pushing us there.