In case you haven’t heard, Marriott has announced that they will purchase Starwood Hotels & Resorts Worldwide Inc in cash and stock for $12.2 billion. This would make them the largest hotel chain in the world with over 1.1 million rooms in over 5,500 hotels with a staggering 30 different brands. Marriott wasn’t the only suitor for SPG with IHG reportedly being interested in July (which was later denied) and Hyatt in acquisition talks with SPG in early October. You can read the press release on the SPG site here & Marriott site here
Last month SPG announced they would be spinning off their timeshare unit and selling that to Interval Leisure Group.
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What This Means For You
To begin with, nothing will change. The acquisition hasn’t been approved yet and they’ll need approval first. SPG currently accounts for approximately 3-4% of hotel rooms in the US and Marriott accounts for roughly 10% of rooms. Given that this will bring them to a total of less than 15% of rooms in the US, it’s highly likely that this acquisition will be approved. It’s expected this will happen in middle to late 2016.
Obviously both companies are going to say that this will be a net gain for their loyalty customers, they’ll have access to more properties to earn & redeem points at and their loyalty will count at more properties worldwide. For example:
We will work to bring you the very best of SPG and Marriott Rewards®, two of the most rewarding loyalty programs in our industry. Our members are at the core of everything we do, and that will not change
The real question isn’t if the number of properties in the combined hotel chain will increase (it will), the question is if members of either or both of the loyalty programs will be better or worse off than pre-acquisition. At this stage it’s obviously too early to tell, but I daresay that the majority of people will be worse off than before – especially those loyal to SPG.
What Will Happen To The American Express SPG Cards?
American Express has already lost the Costco & JetBlue portfolios this year, and this means they will lose their only exclusive co-branded hotel partner. It’s possible as part of the acquisition they’ll be allowed to issue a Marriott card, but Chase currently holds that portfolio and it’s unlikely they’d be willing to give up their own exclusive rights to Marriott (especially after this acquisition).
Our Verdict
Consolidation in markets is almost always a win for the companies involved and a loss for consumers in general. I can’t see this going particularly well for SPG elites and those with a stockpile of SPG points – although those with the latter will likely be given enough time to burn their points before they are converted to Marriott.
This will also likely lead to a reduction in competition in the hotel credit card market, although American Express will be surely keen to take grab an exclusive hotel partner for their own portfolio. At the moment this is really a wait and see situation, this is going to be a long drawn out process and I can almost guarantee that in 12 months time you’ll be sick of hearing about Marriott & SPG in the same sentence.
Hat tip to reader Mitch & Travel Blogger Buzz
It may take several years to complete merging until then they would not combine the points system well.
What are the odds of the SPG amex ever offering another 30K point signup bonus? I was planning to get one next summer when the bonus went up. Should I just get the card now and take the 25K?
Marriott already runs two rewards programs. The Marriott rewards program and Ritz Carlton rewards programs are separate. It’s possible and I’d say likely that they will keep SPG as a separate program as well. That said, it’s also likely that Marriott will eventually devalue SPG points to keep the value of points similar across programs. So on one hand, there would be many more earning/redeeming options, but on the other hand, devaluation is very likely.
The programs are a distinction without a difference.
You earn the same amount of points at each of the hotels as laid out whether you are a member of MR or RR. You get certain benefits at various hotels depending on status at the hotels as laid out as well.
There is very little difference between the 2 programs and you can interchangeably switch from one to another on a daily basis should you wish.
Marriott will in no way be keeping SPG, it will fold it into MR/RR and as such, SPG will disappear.
As I have said, it matters not if you are a member of MR or RR — the program benefits and earning structure are the same.
As a traveling consultant, I will say that this announcement has me hesitant to stay at SPG properties going forward when before I would seek them out. As everyone knows, their rewards points are worth substantially more and that is reflected in how much they pay out. I highly doubt Marriott, the king of devaluations and overpriced redemptions, will recognize as such when they consolidate the programs. The only reason I stay at SPG properties is the points frankly, not the brand. They should focus quickly on reassuring their loyal customers they will be given a fair exchange in value going from SPG to Marriott when the time comes and not a massive devaluation. I travel for work with quite a number of other folks in my company that chase points and everyone is literally switching accommodations today from Westin to Hyatt or Hilton properties nearby because they perceive this as very bad news.
Time to get both cards in the next year for one last time.
Hilton is partners with Citi and amex, is it such a stretch to expect Chase and amex to continue their partnership with Marriott?
The most frightening part will be when Marriott combines both programs points. You think they will value SPG points properly? I’m guessing they won’t show that consideration since it would cost them more $$ down the line. Probably 1:1 but should be more like 1 SPG point to 3 Marriott points. We’ll just to have to wait and see. If you haven’t gotten an SPG card, might be good time to do so, then use the points before they get combined. Wonder how long Amex will still offer the cards, business and personal.
Marriott has their heads so far up their you know what, there’s no way they’ll value SPG points properly. 1:1 for sure. Their brand is so superior, in their eyes, that points are obviously harder to come by/worth less.
Wow, did not know you had a bugaboo about Marriott, you are usually so level headed!
In any event, I don’t expect a 1:1 conversion, probably 1:2 or 1:3 but those lifetime statuses with SPG will be converted to the Marriott fold.
Although there were tricks to earn SPG status easier per year with both credit cards, etc., you needed your butt in bed to get Platinum status. Not so, with Marriott as their credit cards could yield both status and points via real or MS spend.
In addition, there were some short cuts to Marriott elite status — even though based only on nights and not stays (SPG permitted nights or a stay calculus when determining status) so Marriott was always the more gameable program for earning status in a year.
If you MS for free nights, well SPG was better, but if you MS or do real spend for elite status, well then you could not do with respect to SPG, however, you could, and still can do this with respect to Marriott.
What I meant with respect to SPG lifetime status conversions was that one would still have to meet the Marriott stay requirement component, as well, for equivalent Marriott lifetime status — however, I do expect that the nights spent at SPG hotels will be credited as nights for Marriott lifetime purposes..
“…and this means they will lose their only exclusive co-branded hotel partner”
So tell us, what inside information do you have to be making this statement? The truth is, you (nor anyone else) have no idea what will happen with the SPG card. Very irresponsible of you to be making such a declarative statement when the news is less than 24 hours old.
Please take a deep breath and step down from the soapbox. This is a blog, not the Wall Street Journal. It’s often speculation and conjecture on implications with regards to the hobby of news that has been reported factually/officially elsewhere. Given the nature of blogs, I expect to see this sort of thing regardless of whether or not I agree with it. I’m confused where your expectations stem from.
I think J. Bear was so upset with that first sentence that he/she forgot to read the rest of the paragraph.
Agree with Anthony, Parker and William and I think Anthony’s observation is spot on re JBear. As almost a lifetime Marriott Gold and someone who is heavily invested with Marriott, you can bet that I am happy about this news. In addition, as someone who does not value AMEX nor MR, you can also see that I am not distressed by this news and William’s observation is also spot on. AMEX MR lost Costco and JetBlue this year. Apparently they were also forced to devalue MR transfers to BA due to Chase’s opposition to the 1:1 transfer option that sitll exists for UR points to BA Avios and they did not want MR to have the same transfer ratio. Chase also apparently pressured United to devalue SPG transfers from SPG to United so that, too, is no longer a 1:1 transfer option. Get the picture here? Chase is the Big Kahuna of universal currency points — at least with respect to US cardholders — it has BA, United, Marriott/Ritz Carlton and IHG in its stable. If anyone expects AMEX to prevail in this tug of war, then they ought to look at where AMEX stock is now trading due to the loss of Costco and a FAT 10% of its credit card portfolio. William was just stating an informed opinion without giving exhaustive background information. Frankly, I was going to jettison my SPG credit card of many years when it is up in January as AMEX’s approximately 33% increase it is annual fee was unconscionable and since having discovered this blog, I already have jettisoned by Chase Marriott card so will await a lucrative bonus offer that I will be eligible for as I have held that card for a number of years prior to my disposal of same. The news is bad for those who love AMEX — I don’t — transfer of SPG points to airlines — I don’t — SPG Platinum status — I don’t — etc. Those who are SPG Gold will see that Marriott Gold is far more valuable — you get free breakfast at most Marriott properties, and all who are not SPG Platinum will enjoy the change for the most part. SPG Platinums will suffer no doubt, but since it was very difficult to make SPG Platinum without putting in a great deal of butt in bad trips, I think the MS community will also be happy with the change. As a longstanding member in both programs — but one who favored Marriott because the mid-level Gold perks were far better, I am quite happy with the news and can’t wait to use my MR points at the more upper tier SPG hotels that are far less numerous in MR. Thus, the hotel programs do complement themselves to a great extent and this is why a merger with Marriott makes more sense than with Hyatt — Marriott — although it does have a number of upperscale properties — still could have used more,… Read more »
Amex has been collaborating with AirBnB for offers recently. I wonder if (hope that) we’ll see a — hopefully lucrative — AirBnB Amex card coming in to the mix to give them a quality lodging card again. That would be a forward-thinking move, IMO.
Interesting line of thought considering that just a couple days ago I was reading news about AIR BNB’s first venture into a credit card product…. from Master Card.
AMEX better get in line with *somebody*, that is for sure.
Me, I am hoping that the value of the SPG cardholders and the high regard of a more or less upscale batch of customers might convince the new merged company to keep BOTH programs.
For now though, waiting to see what happens and not doing anything rash.
Amex and SPG just renewed their multiyear co-branding contract less than a year ago. I would imagine Marriott would have to pay them off unless there was clause in the contract that says Amex gets nothing if Starwood gets bought.
I wonder if that’ll mean those, like myself, that have lifetime gold or platinum at spg will lose it once its part of Marriott. If so, It would end up being the lifetime of starwoods, not my lifetime