Marriott Rewards & Starwood Preferred Guest Loyalty Program Merger Disaster In The Making

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Marriott made an announcement back in November of last year (read more here) that they had reach an agreement with Starwood’s board to take over the hotel company.

Starwood & Marriott Merger Disaster

I was on a long flight at the time and Sebastian wrote a piece about the proposed merger. Now, the shareholders of the both companies are casting their votes at the end of March whether to approve the merger or not. I would expect it to pass.

Based on my personal experience of both Marriott and Starwood hotels (have spent two years or so of my life staying at each), their loyalty programs and the extensive feedback from my friends, I have zero faith that the combination of these loyalty programs would result anything positive for Marriott Rewards or Starwood Preferred Guest members.

Enthusiasm Gap

Have you ever met anyone who would be enthusiastic about Marriott Rewards? Well. I have not. Then ask the same question about Starwood Preferred Guest. Most of my friends that are SPG members are enthusiastic about their program.

Elite Member Benefits Gap

Marriott Rewards doesn’t have a guaranteed late check out benefit, no lounge access or breakfast at resort locations, where people tend to redeem their points, and upgrades to beyond “club rooms” is not in the program terms and conditions for Marriott stays outside of Asia-Pacific.

Award Nights Gap

Marriott Rewards advertises that they don’t have blackout dates on award nights that is basically an outright lie. Properties can have blackout dates for months during a year with the approval from Marriott Rewards.

Also, properties don’t need to make award nights available when they have standard rooms available for sale unlike with Starwood. You are more likely being unable to redeem Marriott Rewards points versus SPG ones around the holidays or at places where people tend to vacation.

Communication Gap

Marriott Rewards keeps spinning how great their program is without backing anything up.

For years they claimed to have Points + Cash option that only meant that you can combine paid stays (at full non-discounted rates) with award nights while other programs were offering true Cash + Points where you could pay for an award stay partially using cash (basically buying points at a discounted rate).

Also, Marriott a few years back was soliciting Freddie votes and had a huge program devaluation the day after the voting for the awards was over. How honorable is that?

The current CEO keeps spinning how he doesn’t believe in program devaluation yet it keeps happening. This year 70% of the category changes were up and 30% down.

Corporate Culture Gap

Marriott is very conservative company that may party come from the Mormon religious background of it’s founders (and many staffers in the US) while Starwood is more dynamic.

Promotions Gap

Marriott Rewards has been on an autorun for the past few years having the same MegaBonuses year after year with the same number of bonus points available while the number of points required to awards keep climbing up.

Starwood runs several promotions to energize the membership. There are brand dependent promotions like the Sheraton free weekend night one or the extra bonus for visiting all 11 different SPG brands this year.

Aspirational Properties Gap

Does Marriott have any aspirational properties? None come to my mind while I could name quite a few from Starwood such as the St. Regis Bora Bora, W Maldives, Le Meridien Seychelles, St. Regis Punta Mita etc.

Brands Gap

What are the aspirational Marriott brands? Courtyard, Residence Inn, TownPlace Suites etc…. Marriott is strong on the lower end but missing on the high end. Ritz-Carlton probably was an aspirational brand at some point in time, but currently is merely a juiced up Marriott/JW and Marriott likes to think of them as distinctive, with Ritz having it’s own “program” (which in actuality is just a simple flag on the account).

Starwood actually has brands where many like to stay at such as W, Le Meridien, St Regis etc.

Conclusion

I could go on and on why I believe that the eventual merger of loyalty programs will be disastrous for both SPG and Marriott members. I believe that Marriott has underestimated the animosity of many SPG members towards Marriott, its loyalty program and brands. SPG is everything that Marriott isn’t.

Haven’t we all seen that when programs merge they tend to choose the worse parts of both programs and then just call it the best?

Don’t get me wrong. I do like and stay at Marriott properties, but the enthusiasm cap between Marriott and SPG members is irrevocable.

Although the merger may close during the second/third quarter of this year, I doubt that there are changes to the SPG program before late 2017 considering how long it took Marriott integrate both Protea and Delta hotels

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