Yesterday I posted about the rumored details of a new combined Marriott Rewards and Starwood Preferred Guest program. Marriott’s CEO has publicly confirmed that a single loyalty program will be formed in the second half of this year, and based on the information that came out yesterday, it looks like it may be sooner rather than later.
I have no firsthand information here, but based on what’s being rumored, the new program will launch in August, will have five elite tiers, and will have a revenue requirement for the top status. A new program is potentially just a few months away, so it’s pretty crazy that we don’t know the details yet.
On that post, one reader left the following alarming comment:
According to the SPG agent I just spoke with on the phone, the airline transfer program is being “discontinued” on April 16th. If you need to transfer do it now.
Let me say up front that I don’t think this is true. I tried to contact the reader and didn’t hear back, the IP address has multiple names, and I called the SPG Platinum line several times myself, and all the agents confirmed they hadn’t heard anything (and it didn’t sound like they were trying to cover something up, but rather that they genuinely didn’t know). So I don’t think this is true, though it did get me thinking….
Both Marriott & Starwood offer great mileage conversion opportunities
One of the things that Marriott and Starwood have in common is that you can efficiently convert hotel points into airline miles with both programs:
- Starwood lets you convert points into airline miles at a 1:1 ratio, with a 5,000 point bonus for every 20,000 points transferred
- Marriott’s Hotel + Air Packages let you redeem a fixed number of points for a combination of airline miles and hotel nights, and this can be a great value as well
Would Marriott & SPG provide notice if they devalued these options?
The only reasonable answer is yes. Surely Marriott and Starwood have to provide notice if they choose to devalue these opportunities. The whole reason many of us hoard Starpoints and Marriott Rewards points is because we know we can cash them out at any time by converting them into airline miles.
If Amex Membership Rewards or Chase Ultimate Rewards decided tomorrow that points would transfer to all partners at a 2:1 ratio rather than 1:1 ratio, that would of course take tons of value out of the program.
This isn’t just something they should do to make members happy, but rather it’s the only ethical and reasonable approach they can take. That being said, legally the program has the right to (basically) do whatever they’d like. That doesn’t make it good business, though.
The one reason I have a slight bit of doubt
My hope is that the new combined loyalty program will continue to offer a lucrative way to convert points into airline miles. It’s very much in their own best interest to do so.
Why? Because if we were given notice of devaluations to the mileage transfer ratios, many of us would be transferring all (or almost all of) our points tomorrow. I have almost a million Starpoints, so it’s anyone’s guess how much they’d be paying when I convert those all into Alaska miles (and other currencies). I’m not alone.
Presumably they’re hoping not to suddenly incur what could amount to tens of millions of dollars of mileage redemptions overnight. They can prevent that by not worsening the transfer ratio.
At the same time, that’s also the only reason I can think of that they’d do the unthinkable, and devalue these transfer ratios without notice. They don’t want to incur a huge, short term cost, and that might be the only way to prevent that.
Personally I don’t think Marriott would be crazy enough to devalue mileage transfers without providing some advance notice. This would be the worst possible foot on which you could start with a new program. For that matter, I hope they keep similar mileage transfer options, since that would also be a way for them to avoid suddenly having people redeeming hundreds of millions of points.
But I do think I need to provide some amount of warning here. There’s a chance that Marriott and Starwood could devalue these transfer ratios without notice. It would be unethical (in my opinion) and an absolute PR disaster, but we can’t rule it out. I almost feel like if they did, they’d end up reversing course due to the backlash.
While I don’t believe the commenter quoted above is accurate, I still feel like I owe you guys that caution, just in case you are on the fence about whether to convert Starpoints into miles, or book a Marriott Hotel + Air Package.
Personally I’ll be holding onto my points for the time being. Maybe that’s foolish, but I have some basic faith in the future of the program, and at a minimum expect they’ll provide us notice of any changes.
Where do you stand on this? Could you see Marriott or Starwood devaluing the transfer ratio without notice?