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Based on the information provided, at this point, the New Marriott Program is: Poll is created on April 19, 2018 10:07 am

  
  
  
Poll results: Based on the information provided, at this point, the New Marriott Program is:
Voter(s): 15
Poll is created on April 19, 2018 10:07 am
Better  -  votes: 7 / 46.7%
7
46.7%
No difference ❓  -  votes: 3 / 20%
3
20%
Worse  -  votes: 5 / 33.3%
5
33.3%

New Marriott Program  

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KENNECTED
(@kennected)
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April 19, 2018 1:07 pm  

Now that Marriott has given us details on the "new" program. Based on what we know at this point:

Do you think the new program is competitive?
Do you think the new combined company offers a better product than the two single company's?
Do you think the new combined company decreased competition?
Do you think the new combined company will cause rates to increase within it's brands?

Gold Gold Platinum


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Counsellor
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April 20, 2018 12:18 am  

On the whole, for me I think it will be better since I'll be converted from Lifetime Platinum to Lifetime Platinum Premier (a special status that it seems cannot be "earned", only converted to), with many if not all of the benefits of the Rewards LT Platinum and the Starwood LT Platinum.

Some others may find it more difficult to earn Lifetime Silver, Gold, or Platinum status because of the requirement for duration (number of years) at the target level or higher.

There are some peculiarities in the new program that are less favorable than the old Marriott or Starwood programs, e.g., currently Starwoods can earn qualifying nights at up to three rooms per stay, while the new program adopts the Marriott rule of only getting night credit for the room you personally use).

One thing I have not been able to find out is whether the new program will offer the very popular Marriott "nights plus miles" redemption package (Travel Package). Does anyone know?


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SPG Champion
(@spg-champion)
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April 20, 2018 4:04 pm  

Counsellor, post: 2813428, member: 858 wrote: ...One thing I have not been able to find out is whether the new program will offer the very popular Marriott "nights plus miles" redemption package (Travel Package). Does anyone know?

Travel Packages will continue to exist as they do today. We do have plans to announce new Travel Packages, coming summer 2018. Stay tuned for more information!

Best regards,

William R. Sanders
Social Media Specialist
Starwood Hotels & Resorts LLC

[email]spgchampion@starwoodhotels.com[/email]

Stay Connected with SPG!


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Counsellor
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April 22, 2018 1:16 am  

We do have plans to announce new Travel Packages, coming summer 2018. Stay tuned for more information!

Thank you William. It's a pleasure chatting with you again.

If there is consideration being given to adding new travel packages, may I request Marriott consider bringing back a new version of an old package? I forget the name given to it -- it might have been something like "European Sampler" -- but the hotel part of the package consisted of 7 nights at European hotels, in certificates for 2, 2, and 3 nights. One could redeem them all at one property, or could use them at two or thee different properties.

They were really handy for vacations; we used one such package to spend two nights in Prague, two nights in Vienna, and three nights in BudaPest. Wonderful!

As I recall, I think there was a similar package for hotels in Hawaii.


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NYCUA1K
(@nycua1k)
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April 22, 2018 8:46 am  

Smart move on Marriott’s part that will force members to choose between redeeming their points for suddenly more affordable award stays (at least for SPG loyalists) or converting their ‘new’ MR points to 1/3 as many in starpoints to transfer to airline miles. In addition, they have made it such that to earn the most points on the two new co-brand cards, one would have to use them to pay for revenue stays. Both moves are designed to incentivize members to keep their business within Marriott (i.e., to earn and redeem points at MR properties), rather than to repeat SPG’s mistake of incentivizing members to earn starpoints wherever they could and then transfer them to airline miles, essentially turning a hotel points currency into an airline points currency (i.e., miles).


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Counsellor
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April 22, 2018 2:40 pm  

NYCUA1K, post: 2813554, member: 43667 wrote: . . . SPG’s mistake of incentivizing members to earn starpoints wherever they could and then transfer them to airline miles, essentially turning a hotel points currency into an airline points currency (i.e., miles).

With all due respect, I'm not so sure Starwood's business model was a "mistake".

By making Starpoints an airline miles "stem cell" (convertable to miles in many airline programs) Starwood made them more flexible and therefore more desirable not just to their customers (thereby encouraging travelers to stay at SPG properties to accumulate Starpoints) but also to other vendors (like AMEX) who bought Starpoints from SPG to give to their clientele.

And look at what they were "selling" those airline miles for. At the conversion rate of 1.25 airline miles per Starpoint, the miles "cost" the consumer 0.8 Starpoints. If (like me) you value a Starpoint at about 3 cents (because that's the lowest value I redeem them for), that means SPG was selling the airline miles for about 2.4 cents apiece. I'm sure SPG had a deal with the airline to bulk buy the miles at much less than that, so each conversion earned Starwood a tidy profit on each Starpoint.

Now, would Starwood have made a larger profit if that Starpoint had been redeemed for lodging at an SPG property? Of course. But would they have issued as many Starpoints if they weren't capable of being easily converted into miles in so many programs? I think not. I would say the convertibility aspect would make the Starpoints more sought-after, and thus brought them more customers, both wholesale and retail.

But even if I'm wrong, remember that SPG is making a profit on each Starpoint converted to airline miles, and even the smaller profits add up. Making it on volume is a viable business model, too.

All in all, I don't think Starwood lost any money because of making the points convertible, and almost certainly gained a profit.


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oluthomp
(@oluthomp)
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April 22, 2018 6:01 pm  

I am a silver elite in Marriott and a preferred member guest in SPG, with just some few points to becoming Gold in Marriott. When the new program occurs in August will the consolidation automatically bring me to the Gold level or not?


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NYCUA1K
(@nycua1k)
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April 22, 2018 7:59 pm  

Counsellor, post: 2813568, member: 858 wrote: I would say the convertibility aspect would make the Starpoints more sought-after, and thus brought them more customers, both wholesale and retail.

But even if I'm wrong, remember that SPG is making a profit on each Starpoint converted to airline miles, and even the smaller profits add up. Making it on volume is a viable business model, too.

All in all, I don't think Starwood lost any money because of making the points convertible, and almost certainly gained a profit.

It made "the Starpoints more sought-after", alright, but that did not bring in more customers to its core business, which was to put heads -- lots of them -- on beds. Points that were transferred to airlines made it possible for Starwood to claim as revenue the cash equivalent of the points that they awarded as part of, say, a sale but could not claim as revenue until the points were redeemed, transferred, forfeited, expired ("breakage"). However, that is the same problem that every company that runs a loyalty program has. It is called "points liability." Every company wants to decrease it. So, the transfer of starpoints was not a new revenue stream for Starwood. It was money they already made but needed to claim.

More to the point is that by making the transfer of starpoints to airline miles favorable, Starwood took business away from its core business and sent it to airlines in ways that you did not mention and, thus, might not have thought about. The starpoint's claim to fame became its "transferability" to airline miles and not for redeeming award stays at Starwood properties, which had, by far, the most expensive awards, especially at their 'aspirational' top-tier properties. Many felt that redeeming starpoints for award stays was "wasteful." A double whammy that led to people simply getting the SPG AMEX cards and earning loads of starpoints through general spend on them without ever setting foot inside Starwood hotels, which were thus deprived of revenue from both paid stays and reimbursement for award stays. Decreased hotel occupancy, decreased revenue. The model was utterly flawed, and likely contributed to Starwood's demise. Marriott, to their credit, saw that the model was boneheaded and decided to effectively cripple it by limiting the the number of starpoints that can be earned through unbonused co-branded CC spend to 0.67 of a point per dollar (from 1point/$).

I predict that after all the points that AMEX and other companies had purchased but have not yet awarded are exhausted, Marriott will discontinue the starpoint altogether.


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NYCUA1K
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April 22, 2018 10:13 pm  

oluthomp, post: 2813577, member: 112636 wrote: I am a silver elite in Marriott and a preferred member guest in SPG, with just some few points to becoming Gold in Marriott. When the new program occurs in August will the consolidation automatically bring me to the Gold level or not?

If I were you, I would hurry up and make Marriott Gold Elite because that would ensure that you would be converted to Platinum Elite, which will effectively become in the new program what MR Gold Elite is currently.

If you are a SPG Gold when the merged program starts in August, you'll be a 'new' Gold Elite, which will be nearly as useless as the current SPG Gold elite (no free breakfast or lounge access, which the new Platinum Elites will have). It is unlikely that you'd be comped the new Platinum status if you do not make it to MR Gold Elite by August because there are simply too many elites in the combined program.


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Counsellor
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April 24, 2018 11:56 am  

NYCUA1K, post: 2813579, member: 43667 wrote: More to the point is that by making the transfer of starpoints to airline miles favorable, Starwood took business away from its core business and sent it to airlines in ways that you did not mention and, thus, might not have thought about. The starpoint's claim to fame became its "transferability" to airline miles and not for redeeming award stays at Starwood properties, which had, by far, the most expensive awards, especially at their 'aspirational' top-tier properties. Many felt that redeeming starpoints for award stays was "wasteful." A double whammy that led to people simply getting the SPG AMEX cards and earning loads of starpoints through general spend on them without ever setting foot inside Starwood hotels, which were thus deprived of revenue from both paid stays and reimbursement for award stays. Decreased hotel occupancy, decreased revenue. The model was utterly flawed, and likely contributed to Starwood's demise.

You seem to overlook the point that by making Starpoints more desirable, Starwood was able to sell more Starpoints to folks like AMEX, and even if all the additional Starpoints sold were converted to airline miles, Starwood still made a profit on each additional Starpoint.

Sure, it would be more profitable per Starpoint if each Starpoint were limited to use toward a hotel night, but that would make them less desirable and therefore Starwood would sell fewer of them to vendors like AMEX.

And don't overlook the plus factor -- by giving Starpoints instead of (for example) Marriott Rewards points, Starwood would become more desirable to a traveler who wants to collect Starpoints to convert them into miles, and would encourage him/her to give his hotel business to Starwood, thus resulting in more paid occupancy and thus more revenue.

All in all, clearly a net positive for Starwood's bottom line.

Edited to add: You also hypothesize that the convertability will be discontinued after the merger, but on the contrary Marriott's new program will continue it -- applying it also to Marriott Rewards points earned in the past or in the future. Seems as though their beancounters don't agree that it's a losing proposition.


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NYCUA1K
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April 24, 2018 9:49 pm  

Counsellor, post: 2813641, member: 858 wrote: You seem to overlook the point that by making Starpoints more desirable, Starwood was able to sell more Starpoints to folks like AMEX, and even if all the additional Starpoints sold were converted to airline miles, Starwood still made a profit on each additional Starpoint.

Sure, it would be more profitable per Starpoint if each Starpoint were limited to use toward a hotel night, but that would make them less desirable and therefore Starwood would sell fewer of them to vendors like AMEX.

And don't overlook the plus factor -- by giving Starpoints instead of (for example) Marriott Rewards points, Starwood would become more desirable to a traveler who wants to collect Starpoints to convert them into miles, and would encourage him/her to give his hotel business to Starwood, thus resulting in more paid occupancy and thus more revenue.

All in all, clearly a net positive for Starwood's bottom line.

Edited to add: You also hypothesize that the convertability will be discontinued after the merger, but on the contrary Marriott's new program will continue it -- applying it also to Marriott Rewards points earned in the past or in the future. Seems as though their beancounters don't agree that it's a losing proposition.

I did not overlook any point. I squarely addressed it. Points sold to AMEX were not a new revenue stream, as I described, nor was selling points Starwood's core business. Other programs also sell their loyalty points but wisely because the purpose for having a loyalty program is to use it as a marketing tool, and not as a direct source of revenue. Making starpoints more desirable led to the downside that you overlooked and still do: people were simply getting the SPG AMEX cards and earning loads of starpoints on them through general spend without ever setting foot inside Starwood hotels, which were thus deprived of revenue from both paid stays and reimbursement for award stays. As the chart here showed, Starwood awards were the most expensive in the business, so few who used their points to fly ended up in Starwood hotels. Also, their hotels tended to be more expensive in cash; why would anyone want to go there when the point is to save money?


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mattsteg
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April 26, 2018 2:30 pm  

NYCUA1K, post: 2813670, member: 43667 wrote: I did not overlook any point. I squarely addressed it. Points sold to AMEX were not a new revenue stream, as I described, nor was selling points Starwood's core business. Other programs also sell their loyalty points but wisely because the purpose for having a loyalty program is to use it as a marketing tool, and not as a direct source of revenue. Making starpoints more desirable led to the downside that you overlooked and still do: people were simply getting the SPG AMEX cards and earning loads of starpoints on them through general spend without ever setting foot inside Starwood hotels, which were thus deprived of revenue from both paid stays and reimbursement for award stays. As the chart here showed, Starwood awards were the most expensive in the business, so few who used their points to fly ended up in Starwood hotels. Also, their hotels tended to be more expensive in cash; why would anyone want to go there when the point is to save money?

Meh.
By making their points very desirable and driving a lot of point-generation through credit card usage, SPG managed to keep their COSTS under control while offering industry-leading in-hotel benefits to elite members. This allowed them to foster a fiercely-loyal and high-spend customer base even with a smaller footprint.

The new program is competitive. The new product has pluses and minuses. I'd say it is worse, but the (at least for now) availability of top hotels at palatable rates is a big improvement. in hotel recognition will likely get worse due to program scale. How much worse depends on how much Marriott values SPG customers vs. legacy marriott customers, and how much each group shifts in their preference for earn/burn, elite recognition, and property quality.

I doubt rates will be affected much - rather costs to hotels and distribution costs are where then changes will occur.

Silver Gold Executive Platinum Classic Plus Exec Elite Platinum Gold Diamond


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NYCUA1K
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April 26, 2018 8:15 pm  

mattsteg, post: 2813744, member: 5563 wrote: Meh.
By making their points very desirable and driving a lot of point-generation through credit card usage, SPG managed to keep their COSTS under control while offering industry-leading in-hotel benefits to elite members. This allowed them to foster a fiercely-loyal and high-spend customer base even with a smaller footprint.

Except that the purportedly cost-efficient company and program that offered so-called and self-proclaimed "industry-leading in-hotel benefits" went belly-up!

It seems to me that you believe in reverse Darwinism or Demise of the Strongest. Well, I don't. Starwood folded and put itself up on the auction block at a time when there were tremendous growth and record profits in the industry because the whole enterprise, especially its loyalty program, was based on a flawed model.

Among its flaws were the reasons I already gave above, which related to how SPG turned the starpoint into an airline points currency. Part of the members' purportedly "fierce loyalty" was to the starpoint, which could be earned on CC spend and exchanged for free plane tickets, rather than from patronizing SPG and earning starpoints through revenue stays and redeeming them for award stays at 'aspirational' Starwood properties, which were almost an order of magnitude more expensive than the competition. The combination was thoroughly and absolutely boneheaded because it was designed to dis-incentivize members from becoming part of the company's core business. Here's the demise of Starwood in one chart:

The other flaw of the program was that the fierce loyalty that SPG supposedly inspired led to a cadre of elite members that felt "entitled" to perks, some of which they simply made up and decided that hotels owed them, and will have a hard time under the no-nonsense Marriott regime, which began setting things right from the outset for the merged programs by doing exactly what Starwood should have done: pull the plug on any earning of significant numbers of starpoints that was not related to its core business of putting lots heads on beds.


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mattsteg
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April 27, 2018 1:38 am  

Starwood was acquired because they wanted to grow faster, not because the SPG and Starwood hotels were not profitable. Starwood Hotels was consistently more profitable than Marriott, just smaller and unable to build new hotels fast enough to grow at the rate they wanted to.

http://financials.morningstar.com/direct/ratios/r.html?t=XDUS:S1V&region=deu&culture=en-US&productcode=MLE&cur=
http://financials.morningstar.com/ratios/r.html?t=MAR

Silver Gold Executive Platinum Classic Plus Exec Elite Platinum Gold Diamond


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NYCUA1K
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April 27, 2018 3:34 am  

mattsteg, post: 2813769, member: 5563 wrote: Starwood was acquired because they wanted to grow faster, not because the SPG and Starwood hotels were not profitable. Starwood Hotels was consistently more profitable than Marriott, just smaller and unable to build new hotels fast enough to grow at the rate they wanted to.

http://financials.morningstar.com/direct/ratios/r.html?t=XDUS:S1V&region=deu&culture=en-US&productcode=MLE&cur=
http://financials.morningstar.com/ratios/r.html?t=MAR

The reason Starwood found itself on the auction block was clearly documented by none other than the Wall Street Journal. At a time when every other hospitality company was thriving and growing, the company with a points currency that was "very desirable and driving a lot of point-generation through credit card usage" and "managed to keep their COSTS under control while offering industry-leading in-hotel benefits to elite members" was actually under-performing and about to go on the auction block because its growth got anemic, revenue fell, stockholders bitched, a CEO got canned, his replacement immediately bailed out to go run an entertainment company, and the rest is history. Slow growth was part of it, but falling profits when competitors were posting record profits was the biggest part because it also impeded growth. The reasons are not mutually exclusive.

Well, you do not have to take my word for it. Here are excerpts from how the WSJ reported it at the time (sub. req.):
_______________________
Starwood Hotels CEO Frits van Paasschen Resigns

By Craig Karmin and [I]Joann S. Lublin
Updated Feb. 17, 2015 6:19 p.m. ET

Chief Executive Frits van Paasschen faced pressure to increase the number of hotels in Starwood’s system.
....
His sudden exit shows how hotel companies have little tolerance for mixed results at a time when the industry is booming, rising group and leisure travel are lifting revenue-per-available room to new highs, and hotels are fetching record sales prices.
....
Starwood’s stock returned 10% over the past 12 months, including dividends, lagging behind the 30% or more enjoyed by rivals like Marriott and Hilton.
.....
Some analysts also suggested the board was unhappy with the number of hotel owners that have dropped a Starwood brand recently. In 2014, Starwood added 74 hotels and 15,000 rooms to its system, but it also lost 28 hotels and 7,000 rooms during the year.
....
Last year, Thayer Lodging Group said that Westin Diplomat Resort & Spa, with 998 rooms in Hollywood, Fla., would leave the Starwood brand and become affiliated with Hilton.
“We were convinced that Hilton would be more effective at driving convention and group business to that hotel,” says Leland Pillsbury, Thayer’s CEO.[/I]
_________________________

That is why Starwood went up on the auction block. It was under-performing across the board when the competition was thriving. Therefore, Marriott has been wise to cripple the earning of starpoints and the SPG model that encouraged the earning of points through CC spend and point redemptions that were not associated with hotel stays. Marriott knows that it is first and foremost a hospitality company, whose bottom line depends on, yes, putting heads on beds and not butts on premium airline seats!

Lastly, I'd predicted that Marriott would get rid of the starpoint altogether. What I did not expect was for it to happen swiftly. Well, this week I got a letter dated April 17 from AMEX informing me about "important changes" to my SPG Credit Card from American Express, and there was this line:

"Beginning at the time of program change [August 1, '18], Starpoints will be referred to as points."

The demise of Starwood and SPG is complete.


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