Is Marriott Revising The SPG Program Beginning March 1, 2018?

Marriott’s takeover of Starwood closed in September 2016. As a Starwood loyalist I’ve been impressed overall by their path towards integration. From day one Marriott and Starwood have offered reciprocal elite benefits and points transfers between programs, while maintaining the benefits of the individual programs.

We do know that eventually Marriott intends to create a single global loyalty program, as they presently run three programs — Marriott Rewards, Ritz-Carlton Rewards, and Starwood Preferred Guest. Marriott has been working on aligning some policies between programs so that the transformation into a single program won’t be quite as radical, when it finally happens. They’ve also been providing plenty of notice of what’s to come, including that Amex and Chase will both be issuing Marriott credit cards in the future.

As far as the merger of the programs goes, Marriott has said that they hope to have a single technology platform in 2018, and then plan to combine the programs at a later point, which presumably means 2019 or later.

Twitter user @HH_Cash points to an SEC filing for a company that owns the St. Regis Aspen, which contains the following:

Changes to the Starwood Preferred Guests, or SPG, guest loyalty program could adversely impact our revenues and ability to pay dividends.

We have been advised by Marriott that they intend to revise the SPG guest loyalty program for us beginning March 1, 2018. During 2016 and the first nine months of 2017, our revenues under this program were $2.4 million and $3.8 million, respectively. Although we continue to discuss with Marriott the details regarding such changes, there is a risk that any changes could result in a decrease in revenues to us which could reduce our profitability and could materially and adversely affect our results of operations and ability to pay dividends.

HH_Cash has a “holy crap” reaction, though personally I don’t read into it in quite the same way. Yes, I suspect we’ll start to see some changes to the SPG program over the coming months, as Marriott tries to make policy changes to all three loyalty program to get them more in-line before they’re actually integrated.

However, it’s just as likely that these adjustments are happening on the back-end, especially as this filing is from a company that owns a hotel. This could include things like aligning the costs to hotels for buying points and opting into promotions, the reimbursement rates for award stays, or a slew of other things.

So my reaction to the above isn’t “oh my gosh, the SPG program is basically ending or being destroyed on March 1, 2018.” Yes, we’ll likely start to see some changes to the program over the coming months, but I don’t think the March 1 date specifically refers to any major changes that impact guests directly.

I certainly could be wrong, though.

What do you make of the statement in this SEC filing?

Comments

  1. Impossible to know, but if the hotel is worried about a revenue drop, that could easily indicate positive changes from a guest point of view and more money spent on benefits.

  2. I really want the opportunity to get all my points out of SPG before this takes place but I hate to make speculative transfers to airlines. But I have no interest in keeping them as hotel points after the merger. I’ve never used SPG points for a hotel.

  3. I used to do Securities work in my practice as an attorney. The securities laws require that you are forthright to almost a fault when disclosing information to investors.

    So if there is a 1% chance this could hurt the hotel, they need to disclose the possibility.

    I wouldn’t read too much into this in terms of dramatic changes to the SPG experience……at least not yet

  4. That looks like a disclosure from the risks section of a typical SEC filing which is not as big a deal as it seems. In this section companies are required to list any and every thing that could possibly be a risk to shareholders and are often thrown in as a CYA (Cover your ass). So that if there is anything whatsoever that people try to sue you for later and say “why didn’t you tell us it was possible that x could happen” you are covered and can say – “we told you it was a risk.” During the birth of the internet, companies used to disclose a risk along the lines of, if the internet turns out to be a big nothing, we could go bankrupt. Which of course is obvious for an internet company so to read a disclosure like that and run around saying the company admitted it could go bankrupt so it must be bad would have been taking it too seriously. Similarly, I think they are just acknowledging to shareholders that because of the merger, they don’t know what could change so it is theoretically a risk. Nothing to get hysterical about.

  5. Do we think they’ll conform Platinum requirements for SPG to 75 nights to match Marriott? Lots of SPG Amex cardholders are getting their stays and nights credits doubled up (see Gary’s post here: https://viewfromthewing.boardingarea.com/2018/01/25/american-express-double-posting-stay-night-credit-starwood/). Can’t imagine Marriott is just doing this out of the kindness of their heart, and I’m sure SPG has been heavily weighed down this past year with new Platinums matching from Marriott status.

    Would have to imagine they wouldn’t pull this on SPG participants in the middle of the year, but the timing here seems odd and would think they’re going to reduce the number of top-end status holders at some point during this merger.

  6. Accenture called out on its most recent earnings call that it’s working on the integration:

    “With Marriott International, we are working at the heart of one of their most important business imperatives, the integration of Starwood, including the massive data migration. We’re also leveraging key elements of our Innovation architecture to help Marriott achieve its goal to enhance the travel experience and accelerate growth.”

  7. I think there is definitely some kind of integration going on. I just got an email this morning notifying me that I achieved lifetime gold with SPG. I do not meet the requirements of Lifetime Gold with SPG (I have 300+ nights but only 4 years of elite with SPG). However, if you add my one year of Plat status with Marriott, then I do make Lifetime Gold. I may be reading too much into this though because it is possible that SPG may have been aggregating Marriott elite status and SPG elite status years for calculation of Lifetime status for quite some time now. I don’t know.

  8. I think Marriott is hurting themselves by not allowing SPG members to credit stays/points from a Marriott stay into the SPG program. I personally only stay at Starwood properties in the US if they are available but Starwood’s footprint in smaller cities is less than ideal. However, when my choices are Marriott Residence Inn, Fairfield Inn, etc… I prefer to stay at a Hilton or IHG property as they are usually nicer. I would stay at Marriott properties if I could credit my stay to SPG.

  9. Interestingly enough, in the Canadian market, we received word that they are cancelling the Marriott Rewards Visa card, and they issued a targeted promotion for all those who had the Marriott Rewards Visa to apply for the SPG Amex. I doubt they’d push people from Marriott Rewards to SPG if they were thinking about doing away with SPG. In fact, the opposite appears to be true.

  10. @Shawn
    It’s not so much that Marriot is cancelling the cards it’s that Chase the issuer is pulling out of Canada. They are also cancelling all Chase Amazon Visa cards . I think Amex should have a Marriott offering in Canada fairly soon.

  11. when do you think Marriott will eliminate current SPG “perks” – like transferring 20,000 SPG points for 25,000 Alaska miles? Do you think they’ll give us a warning at least?

  12. At check out yesterday I engaged in a chat with the FOM and she said she was about to take a webinar on changes to SPG that the GM had already taken and that it was clear that SPG members would not be happy about them and thing were getting worse. Maybe Lucky could reach out to someone who had already taken that course?!

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