On Tuesday, Marriott International revealed a plan a year and a half in the making, ever since its US$13.3 billion acquisition of Starwood Hotels and Resorts: how it plans to handle the merger of both its and Starwood’s loyalty programs.
To Marriott’s credit, it offered plenty of specifics on that plan, which involves rolling Marriott Rewards, Ritz-Carlton Rewards and Starwood Preferred Guest (SPG) accounts into one single loyalty program that will debut in August.
But some major details remain unknown, including the name of the revised program, which Marriott said would be unveiled in 2019.
“To be frank, I think if Marriott made one really big mistake here, it’s that they didn’t have a name for their new program,” said Julian Kheel, senior editor of The Points Guy, a travel news and advice website. “Branding is so important in the hotel industry, and to announce a major new initiative without any new branding for it is really odd.”
According to Marriott, the hold-off on the name was more about the priority of getting information out to members.
“Because there has been so much anticipation among our members for the new program, we decided to announce and then implement the program changes as soon as possible so they could take advantage of all the great new benefits sooner, rather than waiting any longer,” a Marriott spokesman told HOTELS.
Overall though, Kheel said he thought the company had done as good a job as it given the complications of joining three loyalty options. He also pointed to the shrewdness of keeping elements of the Starwood program popular with members, including one that allows SPG points to be converted into airline miles. Platinum Elite members can also upgrade to a complimentary suite, based on availability – a feature Marriott did not have previously.
Tiered status
The new loyalty program has a total of five elite status tiers: Silver Elite (who have stayed at least 10 nights), Gold Elite (25 nights), Platinum Elite (50 nights), Platinum Premier Elite (75 nights) and Platinum Premier Elite with Ambassador (100 nights and US$20,000 of spend). Lifetime status in both SPG and Marriott Rewards will continue to be recognized.
The new award chart now has eight categories and is tiered into off-peak, standard and peak pricing. All hotels in the loyalty portfolio also will have no blackout dates for redemption.
Two unknowns: how much off-peak and standard space will actually be available, and which properties fall into which category, information Marriott says will not be available until June.
“There’s only one reason they didn’t reveal the full award chart: It’s because it’s bad news,” said New York-based business-travel columnist Joe Brancatelli.
Marriott doesn’t see it that way.
“We know our members are very interested in knowing which hotels will fall into which categories and look forward to sharing that information in the near future, so they can plan redemption travel accordingly,” a Marriott spokesman told HOTELS. Any member who has booked redemption travel may always rebook if the number of points needed to redeem for their stay drops after August.
According to Kheel, members who will be unhappy about the changes include lower-level elites and potentially those without elite status at all.
“There’s really not much to the new Marriott Silver status. It’s basically almost the same features you could get having the co-branded credit card,” Kheel said.
Drop-off in benefits
Brancatelli echoed this, highlighting the fact that, unless someone is in the Platinum Premier Elite group, their benefits drop off significantly.
“What Marriott is telling you is, ‘You want to get serious benefits from us? You owe us 75 nights a year.’ If you’re not giving them 75 nights a year, there’s just not that much there,” he said.
He added, “This is the downside of consolidation for the customer. You’re suddenly not a chain with 4,500 hotels. Now you’ve got 6,500 hotels. If you own the market, you don’t have to give as much. And then (Marriott) can go to the franchisees and the owners and say, ‘See, we’re not giving away the store.’”
Indeed, owners have much to be happy about so far, as CHM Warnick’s Chad Crandell noted in a blog for HOTELS Wednesday:
“…Marriott recently shared details about some of the anticipated changes to its loyalty program that are increasingly focused on owner economics, expected to deliver significant annualized property cost savings,” Crandell wrote. “Some of the changes address traditional gripes, which is promising. Of particular note are changes to reimbursement policies, compensating more nights as a percentage of daily ADR.”
Crandell, too, noted that it has been reported that hotel owners should see costs associated with paying for point redemptions at their properties lowered by roughly 20%.