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With Marriott and Starwood hotels planning to merge, a key area of interest for consumers is the possible merger of the loyalty programs, Marriott Rewards and Starwood Preferred Guest.
When asked about the loyalty program integration during its conference call this morning, Marriott CEO Arne Sorenson noted:
“We too are attracted because of the strength of SPG. Whether you look at their app which is a wonderful inspirational travel planning app, look at how SPG skews younger, how it’s very valued by elite travelers. Obviously we see great value in the Marriott Rewards program as well. We will take the best of both programs and make sure those bests are preserved.”
While Marriott says it plans to keep and grow all Starwood brands, and both programs are regular award winners, key differences among the programs are:
The deal isn’t expected to close until mid 2016 and loyalty program changes may not happen until well after that, so the current programs could stay unchanged for over a year or more.
No announcements about the loyalty programs have been made, but with Marriott having almost 3x as many members as Starwood, our guess is if the programs combine it will look more like Marriott Rewards today than Starwood Preferred Guest today.
Winner: Marriott Rewards members
Marriott is hoping to accelerate growth of many Starwood brands, and that means many more opportunities to use points for stays at more upscale hotels like W, Le Meridien, and Westin worldwide.
Our sense is if there are any loyalty changes, they will look more like Marriott Rewards today than Starwood given almost 3x as many Marriott as Starwood members. But Marriott may need to sweeten some things to keep Starwood members happy, so current Marriott members may see additional benefits.
Winner: Starwood members who earn most points via hotel stays
Marriott offers significantly more rewards for what you spend on actual hotel stays – with Marriott Rewards currently offering 3-5x more points per dollar spent on hotel stays than Starwood, so members who earn most of their points from hotel stays rather than credit card spend could earn more points if the new program looks more like Marriott Rewards.
They will also have many more hotels with which to earn and use points.
Loser: Starwood members who earn mostly via credit card spend
To counter slower earning from paid hotel stays, Starwood charges fewer points for hotel nights, with Marriott hotels often costing over 3x what equivalent Starwood hotels cost. For example a typical Starwood hotel like the Westin San Diego costs 10,000 points a night, while a comparable hotel under Marriott Rewards like the Renaissance San Diego or Marriott Marquis San Diego costs 35,000 points a night.
So, someone who earns via credit card spending at about one point per dollar spent on non hotel purchases will take almost 3x as long to earn a reward under Marriott’s current program than Starwood’s current program.
Loser: Starwood elites who don’t stay at other chains like Marriott
Fiercely loyal Starwood elites may find it harder to earn top elite status in the new program if they are currently spending the vast majority of their nights in Starwood properties. It takes 1.5-3x as many more stays to earn top Marriott status as Starwood status today. Top Starwood elites who currently don’t spend many nights at Marriott or other hotel chains that could be moved over to the new Marriott may find it harder to keep top elite status.
Winner or Loser: American Express and Chase
American Express is currently the exclusive card partner of Starwood hotels via the Starwood Preferred Guest card from American Express.
Chase is the exclusive card partner of Marriott hotels via the Marriott Rewards card products. If Marriott Rewards is the surviving loyalty program, Chase might be in better position to absorb current Starwood card holders if the Starwood program disappears.
Marriott could also choose to go with two card issuers for its program, as Hilton currently does, and Marriott is saying it’s too soon to make any comments on the credit card front.
Winner: Marriott lifetime members
They should have lifetime elite status benefits valid at thousands of more hotels than before.
Loser: Starwood members who use airline transfer
A unique feature of the Starwood program is the ability to transfer points into real airline miles at 1:1 or better to dozens of airline programs like American AAdvantage and Alaska MileagePlan. While Marriott also allows point transfer, the transfer ratios are diluted. We don’t expect this feature to remain with the generosity it does today, but would be pleasantly surprised if it does.
Winner or Loser: Elites who like suites
Starwood is more generous in offering suite upgrades to its most loyal members than Marriott, with Starwood hotels being more upscale and generally having more suites available. It’s unclear whether Marriott will try to offer more suite incentives for elites as part of the transition, but doing so would help Starwood’s most loyal guests feel more welcome.
Winner or Loser: United MileagePlus or Delta SkyMiles members
United MileagePlus has an agreement with Marriott Rewards to offer reciprocal elite benefits for each program’s elite members. For example, top MileagePlus Premier members get free Gold Elite status at Marriott hotels. Delta SkyMiles has a similar agreement with Starwood hotels, though the elite benefits at Starwood hotels are less lucrative than what Marriott offers United MileagePlus members.
It’s unclear whether one or both agreements will survive.
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