Marriott’s Outlook On Their Loyalty Program And Hotel Brands

Filed Under: Hotels, Marriott

Yesterday we learned that the merger between Marriott and Starwood is back on, following a rather exciting week for Starwood. Starwood had tentatively agreed to enter into a deal with Chinese investor group Anbang, which made a better offer for Starwood than Marriott, though Marriott was still able to counter and come out ahead.

Marriott had an investor presentation yesterday to provide an update on the acquisition. This was obviously intended to put investors at ease, given that many are concerned that Marriott is overpaying for Starwood, given that the cost of the deal increased significantly over the course of a week.


With that in mind, there were two areas of the presentation which were especially interesting. These involved an update on the combined loyalty program, as well as further thoughts on the combined groups’ hotel brands, given that there will be 30 of them.

Combined Marriott & Starwood loyalty program?

While there has been a lot of speculation about how a combined Marriott and Starwood loyalty program would look, we haven’t had much concrete information. [Update: you can read all of the details about the new Marriott and Starwood program here.] Heck, up until now they haven’t even officially indicated that they’d create a single loyalty program (it seemed highly likely, but Ritz-Carlton still has a separate loyalty program, so nothing is out of the question).

The presentation had a few interesting points:

  • Marriott and Starwood want to run parallel programs during the integration, in order to maintain existing member benefits while also building bridges between the programs
  • Marriott acknowledges Starwood’s expertise with affluent consumers in the lifestyle segment, while crediting themselves for having long-standing relations with frequent business travelers across broad brand portfolios (which I think is fair)
  • Marriott recognizes that they want to provide a more personalized experience, something which Starwood excels at, while Marriott doesn’t
  • Marriott recognizes that their co-brand credit card is uncompetitive in many ways, given that the Marriott Rewards® Premier Credit Card offers just one point per dollar spent (and I value those points at ~0.7 cents each); meanwhile the Starwood Preferred Guest® Credit Card from American Express offers one Starpoint per dollar spent, which I value at ~2.2 cents each

My Starwood Ambassador sure knows how to take care of me!

So while I’m still not confident that a combined loyalty program would be good news for Starwood loyalists, it’s nice to see that Marriott management is at least acknowledging the right points.


Will Marriott keep all 30 brands?

Between Marriott and Starwood, the combined group would have 30 brands, which is sort of insane.

Brands-Marriott Brands-Starwood

What’s interesting is what they say about the various brands, and how they view them comparatively:

  • St. Regis and Ritz-Carlton can co-exist, and they see a lot of growth potential for St. Regis, especially in Asia; I’m not sure how exactly those brands would be differentiated under the same hotel group (in many cases I guess the same could be said about Sheraton, Westin, and Le Meridien)
  • W is a lower end version of EDITION, though both brands can thrive and be successful
  • AC by Marriott and Aloft can also co-exist, with AC being slightly more sophisticated/European, and Aloft being slightly more playful
  • The Luxury Collection and Autograph Collection are similar, and it might make sense to fold The Luxury Collection into Autograph Collection
  • Element has tremendous growth potential, and can compete with Airbnb and other home rental options; they’re absolutely delusional if they think that’s true — just because a generic room has a kitchen, doesn’t make it anything like the unique experience you get at an Airbnb
  • Sheraton needs work, even beyond Starwood’s Sheraton 2020 plan; there needs to be more brand consistency, with some capital put into the properties to make them more competitive




Bottom line

The merger still isn’t finalized, as Anbang could still come back with a higher offer, though the approval process this time around would be more complicated (and due to the breakup fee, they’d have to really overpay). Even though Anbang would be a wild card, I’m still hoping that’s what ends up happening, since consolidation is bad news for consumers.

All that being said, I actually think Marriott’s management is on the right track in general in terms of how they’re viewing the two loyalty programs and their 30 brands… for the most part.

As we’ve learned from US airlines, though, executive talk before and after a merger can be very different matters…


What do you make of Marriott’s perspective on their loyalty program and hotel brands?

(Tip of the hat to View from the Wing)

  1. Very interesting development — given how Marriot Executive know that their loyalty program actually sucks, they still don’t give a shxt about it….So my guess it’s going to be quite a pathetic evolvement of the spg program.

  2. As a Starwood Platinum member who has almost achieved “Lifetime Platinum” status, any way I look at it I’m going to get screwed in this merger. Somehow, some way, my multi-year effort to achieve lifetime platinum status (any my loyalty to Starwood during the journey) will result in me getting diddly-squat in any combined program. The consumer never wins in these mergers, and this one won’t be any different.

    My hope is the Chinese investors cough up enough money to outbid Marriott once and for all.

  3. I have pretty low expectations for the outcome of this merger when it comes to customer benefits.

  4. St. Regis is luxury? Seriously? OTP, bad taste, loud, vulgar, tacky but seems to get away with charging a premium. Perhaps that’s due to good marketing.

  5. I like Mariott.
    I had the best stay of my life at three successive Marriots. What can I say.

  6. A few thoughts.
    First off I was a United Million Male member and was very worried about what would happen when they merged the frequent flier programs. In the end they respected lifetime loyalty – thank goodness. So I’m hoping that Platinum for Life members will be grandfathered into the new program – preserving that loyalty – why would they want to take away these lifetime benefits from the very customers they intend to want to keep?

    Secondly, I never like Smisek’s “I think you are gonna like it” statements and look where he is now. Continental ruined a great United product, lost a bunch of customers and then slowly brought back all the service points that made United popular.

    My 2 cents worth is I prefer another buyer that might take over Starwood and keep it in tits current format, preserving the management company, SPG program ,etc.

  7. what about Starwood Vacation Network timeshare ownership week conversion option to SPG points if we don’t want to use it in an SVN resort? I preseme they would have to find s similar option into Marriott points….or keep SPG

  8. Starwood’s Luxury Collection has some great hotels. I’ve stayed in several in the US and Europe. The one in Milan is awesome. The Bristol in Vienna needs some refurbishing though they have some new rooms which are very nice.

Leave a Reply

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Your email address will not be published. Required fields are marked *