Read all about it here:
Marriott Rewards & SPG Merger Will Result In New Loyalty Program Name | LoyaltyLobby
Arne says something very interesting about reducing the cost of the Rewards program to hotel owners. Wondering why it's so expensive for hotel owners - certainly not the bottle of soda or pack of candy I get at check in for a welcome gift.
As I understand the properties pay Marriott for the points that are awarded. Not certain how that happens, but in the end of the day, the properties are the ones that make the money and the costs for getting people in the beds, marketing, reservations, rewards, etc are all charged back to the property.
I know that for Best Western, owners have to pay to use the name. 20k a year for the lowest branded BW. And then of course there are pretty strict rules they have to follow and fines they have to pay for non compliance. I would guess to use Marriott there is something similar on top of all the points that need to paid out.
Arne talks about improvments in “share of wallet”. Not unexpected.
Also, there’s “never enough SHARE”, so he feels there’s always room for expanding the footprint of the brand. Perhaps further acquisitions in the future?
But how can we have “increasing loyalty program value“ for guests while also being “more cost effective” for the hotel owner?
verysuiteboy, You have to come from a marketing background to fully understand the CEO, How many times have you seen the marketing blurb come out with new and improved sell and then to find out the new and improved is giving you a biscuit and taking away a bone. Increasing loyalty program value for guests is marketing code for make it sound like a great deal that we are getting a few new things while hardly mentioning the takeaways and being more cost effective for the hotel owner is marketing code for charging them more to the have the honor to explain to us why we are getting less. It is kind of like the good deal we got when they took free coffee away or how climate change friendly they were in not having free newspapers any longer..
"we are bring the loyalty programs together......that will happen the second part of this year"
that's about 3-4 month away!! Ughhhhhh, the end is coming! now I really need to hurry for this SPG LifeTime Status!
It's hard to believe starguy that they would cut off qualification criteria mid-year, especially since elite benefits go through the end of the year and actually into February of 2019.
mustanggt I agree, so when he mentions that the programs will be brought together in the second part of this year.
I wonder what he means by that? maybe new website? new reward redemption for MR+SPG? new cards Amex&Chase that has the same earning rates? Then in 2019 new qualification criteria, new elite benefits, etc
I do kind of like "Rabid Rewards"
Let's hope our SPG rabidity pays off for everyone and we all get the programme our loyalty deserves. As for expansion 27% of Hilton has just come on the market!
Glad I just got a rabies shot.
Informative spot there fistuk. Announcements in 2018 for a new scheme commencing 2019. The next 12 months are going to be interesting.
Indeed, which is why I termed this the “Year of Explanation of Upcoming Benefits”! Hold on to your hats, Mabel...
Thanks for sharing. Having viewed at least a dozen of these types of 'going forward' interviews by a CEO who I hold in high regard and believe is a leader of solid integrity, I find myself struggling to take any firm conviction toward where we are headed based only on words spoken to reporters or analysts.Recognizing that Arne is speaking to several constituencies at once and that nothing is said falsely, I do notice that little (understandably) is said specifically. Having watched the firm deny the blocking of wi-fi (to the tune of a $600k fine) of customers at Gaylords, not providing data (and thereby being sued) to the DC's Attorney General regarding resort fees, having to alter the mis-communication of two of the past three MegaBonuses, and just recently observing how several Starwoods that were supposed to go down in Categories March 6th, did not (and weren't announced, they just didn't go down), I've come to the conclusion that what Marriott says is, What's going to happen...until it doesn't.
Here's my specific takeaways:As a longtime Marriott loyalist I continue to remain fascinated by Arne's fascination about SPG's loyalty - it (after being stated over and over again) pretty much, IMO, implies that Marriott loyalists lacked that loyalty (Arne have you read any forums?).As a longtime Marriott associate/client/loyalist I was interested to hear him say that their goals are to provide value to guests, cost effective programs to owners and drive (however that's to be interpreted) loyalty - a bit of a redirection from the founder's approach of 'take care of the employee and they will take care of the guest'. No bone to pick - just an observation, draw your own conclusions.I agree, the deal has gone seemingly well. Marriott was an effective buyer of under-utilized assets and as I wrote last week, has done a superb job of tightening up Starwood margins (improving performance by $50-100k per room); the good news for us, there was so much fat in the Starwood operations that we still have a couple of more years before Marriott must compete against their own prior margins of operating Starwoods, perhaps leaving the operators some flexibility to continue their attitude (costlier than Marriott's) toward elite loyalty members.The above paragraph leads to my next thought: Arne said, SPG cares about the loyalty program (again, Marriott clients didn't?), "the last thing we would want to do"...is harm that. You guys put in your own meaning of "last" .I totally agree with Arne (I'd be silly not to - he truly is an industry leader and has performed superbly, especially for us shareholders) about the trends, the growth potential, and the enormous value of scalability and quite frankly about Marriott's continued skill to optimize financially all of those and several other (consumer confidence, emerging markets, etc) trends. Here's the question; do those positive financial trends provide cover for Marriott to tighten up the reins of what they may perceive as bloated and unnecessarily costly loyalty benefits? Time will tell.And finally - one vibe I have gotten from the beginning of the acquisition - Marriott executives truly see the top line Starwood properties as a major benefit to all loyalty members, and to a large effect that is certainly true - it's great to have more wonderful properties to visit in exotic locales. Here's my observation; IMO, Marriott views the mere presence of those properties as significant enough of a benefit and actually a driver (driving the program? from the earlier statement?) to help us "use our points", thus lowering their balance sheet effect. Is a St. Regis at 120,000 points a night more 'free' than one at 90,000? Get my drift? Got it, get it, good!Keep your eye on the ball and as always, Keep on keepin' on Insiders
Nice and thoughtful reply there erc. Be careful though, we may start questioning your rabble-rouser credentials!
Always zig when they zag, keeps 'em honest
My take was that, like many observers have said, just how fiercely loyal SPG members are to their programme. Marriott Rewards Members, although far outnumbering us are far less vocal in their support of their programme and also are far less loyal to it. Many SPG members only stay in SPG properties unless the are not able to. I have seen on here many occasions when people have commented that they stayed in the Hilton etc. because it was cheaper or just slightly more convenient. You have had your programme changed for the worse on many occasions with only a whimper of protest. SPG members would be up in arms over such changes. I think Arne recognises the simple fact that it out programme is watered down too much then we will be off. What we all hope is that the combined programme is much nearer to SPG than rewards. That is a win win situation. We won't go and you get a much more advantageous rewards for your loyalty.
Well, at the risk of bringing my observations around to the 'loyalty' issue, which wasn't really the intent of my Reply, I will state that I hope that you are correct, but I believe SPGers are greatly overestimating the 'fear' factor regarding Marriott's concern over losing pre-acquisition SPG business.Yes, certainly back in September 2016 when Marriott closed the deal, the SPG customer base was of material importance to the success of the acquisition. Now, as we approach the beginning of its third year this fall, I would not be so confident of the SPG 'leverage' being the perceived asset many might believe it deserves to be.Whereas Marriott loyalists might have been quicker to go elsewhere than SPGers at Starwood, they no doubt viewed it as 'loyalty given when deserved' (exactly your viewpoint). We have pages of Lifetime Loyalists of enormous revenue contributors, threatening and actually leaving, without a blip on the radar screen of the Marriott spaceship (in most likely, larger numbers than SPG at-risk members). Marriott has shown to their credit and operating intellect, they will not confront threats head on, but they have also shown they will seldom yield when their strategy is tested.We shall see how it all plays out - certainly Marriott will attempt to restrain themselves from carelessly losing built in revenue, but the seduction of proven margin enhancement combined with tremendous current success and significant potential opportunities (synergistic savings already captured and forecasted, Asia, alibaba, and pipeline development alone makes the SPG impact far less than it was in 2016) may well diminish, if not outright nullify, the barking threats of the rabid SPG loyalists.
brianandlin, I am not sure that Insiders would be a group that necessarily represents the typical Marriott Loyalist or Marriott stayer views. Many of us first came on here originally because we had a beef or were responding to a contest, and realized it was a fun community of like minded but diverse debaters. Majority of the insiders regulars are lifetime platinum or platinums well on their way to lifetime. Out of the half a million or so rooms that Marriott tries to fill every night, there are only a few dozen people on insiders that participate regularly.
I think what Marriott does have to fear is the consequence of this rabid SPG loyalty if it plays out like Marriotteers more convenience-led version.
We are all members of Marriott but could all have been SPGers instead. For me, the decision not to stay with SPG was its London-centric inventory, outside London is SPG wasteland and most of my business and leisure hotel stays were outside London. It may be the better scheme but I could never climb up the elite ladder to gain leverage. The other 3 possibilities were Hilton which is where I started my loyalty travels but very swiftly became disappointed with shoddy properties left to decay due to contractual wrangling which 20 years later still remains unresolved. IHG was another possibility with properties everywhere and a good points program but virtually no in-stay recognition. Marriott had both the recognition and the points all wrapped up in well maintained properties and a crisp loyalty system. I would go somewhat out of my way to stay at Marriott so it became my mainstay with IHG mopping up where Marriotts coverage lacked.
How far out of my way would I go to stay at Marriotts? Well some distance, maybe 30 mins. So quite loyal but not rabidly so. But how far do SPGers go to stay at Starwood? Well in all probability further since it is unquestionably easier for most travellers going somewhere in the USA to find a Marriott or Hilton branded hotel than a Starwood. So a lot, but by no means all, SPG members eschewed more convenient locations with strong chains and solid reward programs (Hilton and Marriott) to continue staying at Starwood. The question is how many SPGers are that rabid? And will they remain so when the programs merge? Even if they don’t remain loyal to the Starwood brands is that because they will instead utilise the now more convenient Marriott alternative where they also have status? So far, anecdotally at least, there doesn’t seem to be much crossover between Marriott and SPG. A lot of Marriotteers have tried SPG and likewise SPGers but most seem to be sticking to ”their” scheme. Since the merger I’ve had about 100 nights, 60 went to Marriott, 30 to IHG, 6 to Hotels.com and 2 to SPG. But here’s the kicker, I’m loyal to Marriott yet it only took 60% of my stays over the last 20 months. What if SPGers are more loyal than that? And what happens if they decide they don’t like the new scheme and end up drifting? How much of SPGs business is driven by the program at considerable inconvenience to the member?
You see I reckon most Marriott business stayers are pretty but not fiercely loyal to Marriott. Witness my 60%. But I suspect SPGers will bear considerably more inconvenience to stay at their preferred Starwood brands than we will. In reality till now they’ve had to. What happens if a 90% SPGer becomes more wanderlust and becomes a 60% Starriotteer? Profit comes from the excess after paying the overheads. Losing 10% of your turnover may mean losing 50% of your profits. Put simply if that fierce loyalty SPG seems to have engendered disspiates, will it dissipate towards Marriott legacy brands, or elsewhere? Marriott needs to fear that. Not some action by a few angry souls but a collective shrug and moving on by a disillusioned membership.
Ooooo---I like the word "Starriotteer"
Can I get that emblazoned on my new Platinum card?
A rabid Starriotteer would have it tattooed on his/her forearm.
Think how easy it would be check-in. Just pull up your sleeve.
We'll have to see if starguy wears long sleeves to the Tipple or if he will reveal all!
First off, I'm not saying that Marriott shouldn't concern themselves about defections from Starwood and I'm confident that they are; but what I am saying is that I believe it is wishful (and incorrect) thinking for anyone to think that by saying it over and over again that it guarantees it will occur - i.e. stop beating your chest, it will not impact the outcome of whatever Marriott decides.
Loyalty Members (and folks can write in about duplicates or whatever- but these are apples to apples comparisons);
2015 - Marriott 54 million
2015 - Starwood 21 million
Current - Marriott >110 million - and rapidly growing.
In any measurement you want to use (RevPar, rooms, market share, op margins, G&A savings, cross retail affiliations, etc etc) Marriott is bursting out of the seams.
My point was that the original SPG member as valued as he/she was in 2016, has less relative value today, and we have seen what occurs when one stakeholder has less relative value with Marriott.
So all can continue delving deep into the value of keeping customers - Marriott has a strategy that IMO, will not be altered by our viewpoints.
ps - if you were to read FlyerTalk or other comments on Loyalty blogs, you would most likely have formed the opinion that to many SPGers, Marriott has already spoiled Starwood and yet here we are with the numbers that are reported quarter after quarter.
I think if you want to look in the crystal ball on what will happen, look right here in Canada with what happened with the merging of Delta into the Marriott fleet. Now Delta as a brand is small, but in Canada it was a substantial force in the medium and higher end hotel business. it was a direct competitor to the Hilton, Marriott and Sheraton Brands and some are pretty nice and some require some work. It took Marriott two or three years to change over, however once completed (and very smoothly i may add) over night it became Marriott. The people at the front desk were Marriott, they had their scpeel down to the tee, the housekeeping staff were Marriott, they would smile and say good morning sir as if the prime minister was walking by. Did they care about the substantial body of Delta Privilege members, nope, no not a bit. Their cookie was to expand the horizon to those who were Marriott customers already and attract more. I stay at Delta now about 50 % of my time that I stay in Canada, because I can. I get my Marriott treatment, my advantages my points and my upgrades. I stay at Delta because it is Marriott. I do not Stay at SPG because it is not Marriott but as soon as i change over I will stay at SPG by Marriott.
I know i am comparing grapes and grapefruit, but one small story that told me how Marriott does change management. Six months after Mariotteers were allowed to stay at Delta and get their privilege I tried to pass a Delta gift card at the Delta Toronto East. Not one person in the front desk staff even knew what it was and how to process it. They had to get the manager of hospitality to process it and even at that she spent 30 minutes on the phone getting a balance. Delta was gone, it was now Delta by Marriott.
I don’t think raw numbers of loyalty members tell the whole story (there’s 100M members! Wow) and it doesn’t necessarily mean that everyone will strive for Gold or Platinum elite status or whatever. Many people who sign up for a loyalty program never end up using it. Or they stay once or twice. Ever. Or they’ll take their one big vacation per year & get their credit, but it may never amount to much
I see this with airline loyalty programs. People enroll, don’t really use it, forget to give their member number when booking, then they move addresses, re-enroll, and many never get any tangible benefit from “being a member”. People will say “I‘ve got 4327 Miles. What can I do with it?”
I enroll in the programs at my local grocery store, or store at the mall, or gas station. Maybe I get some material benefit, and maybe I don’t. But it doesn’t bother me either way. Who would care if I said I was a Bath & Body Works Platinum Member? Not many. So unless Travel is important to you, either personally or professionally , you may not care about Starrioteer Rewards once you’ve signed up.
I wish Marriott would release how many silver, gold, platinum, lifetime members they have!
Since the loyalty members (even with all the financial idiosyncrancies) numbers are the same measurement - it does have value in a relative measurement. The growth - of whatever we want to call them is substantial (more than the original Starwood number). This is why I wrote in anticipation of that issue, Loyalty Members (and folks can write in about duplicates or whatever- but these are apples to apples comparisons) the 'whatever' being exactly what you described above.
Yes, of course there is junk in the numbers - but there has always been - so we can look and see that combined with all of the financial momentum unrelated to occupancy (OTA commission cuts, development fees, franchise fees, capital gains, reduced debt service expense, reduced G&A as a % of revenue, the Asian potential - supported by the exposure to 500 million daily mobile users on Alibaba's platforms through their 50% joint venture in Alibaba and the management of their travel service platform on Fliggy , etc etc etc) the importance of the much exalted SPG customer has declined in relative value since the acquisition. Raw numbers or not - Marriott is not as beholden to SPGers as they were at the closing of the deal.
This has been a very interesting thread to read!!! I can relate to the pressure that is put upon the company that acquires a competitor and the immediate need to show "the street" that not only is it a good deal but it will drive additional sales and profit. Typically in large acquisitions it takes time to realize synergies and show the street that profit will continue to grow (usually not quite as much as the street would like to see!!!).
Here's hoping that Marriott will realize their goal and keep the investment community "happy" (if that is even possible!!!).
I wonder how merging of these brand will affect lifetime status. Currently I was told transferring point to Marriott from spa is a no qualifying action for lifetime staus, will that continue to be true. I am only 20,000 points from lifetime gold and thought staying at Spg would transfer... won’t they in the future? This could be very unfair.. will nights combine tooo for status?
Jersey_girl (can't seem to tag you): the new Lifetime scheme will certainly be announced with the rest of the new combined loyalty program. We can't pronounce yet if accounts from both programs will merge all LifeTime counters. We hope so, but if we use the Delta Hotels (Delta Privileges program) acquisition as a reference, they won't.
Techniques for transferring points (in ways that they can count towards LT status) are written about by MrWhipple and myself in two big threads: Manufacturing LifeTime points (try before you merge) and https://insiders.marriott.com /thread/51654#comment-231982
20k points are fairly easy to rack up before the end of 2018 if you have the MR visa card and have a few upcoming (paid!) stays, but I would wait with the Starwood Kool-Aid for now if you're fighting hard for your LTG status.
The only big promise that was articulated is that people that already have reached LT status, will be able to keep that going into the new program. So go for it now to have less surprises later!
I wonder just when the investing in technology he mentions in passing will actually take place? Unless the latest release of the web site was it......!
Being a Marriott loyalist to me does not mean one will only stay at a Marriott brand when traveling. When considering all options for hotel stays in a given area Marriott is on the top of the list, yet when it is not convenient to stay at a Marriott then yes. But when other options drive the convenience issue then I for one opt in.
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