What the Marriott-Starwood merger means for Starpoints – 2 FREE nights in a category 1-5

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The Marriott-Starwood merger closing Friday could make SPG as you know it a ticking time bomb. The merge is making us wonder, “What will happen to our beloved Starpoints?”

Late news today is The Starwood Preferred Guest® Credit Card from American Express is changing from a 25,000 sign-up bonus to a 2 FREE nights offer in a category 1-5 hotel after you spend $3,000 in the first 3 months. It only takes 2,000-3,000 Starpoints for a category 1 Starwood hotel. Wow that would only be a bonus of 6,000 Starpoints for 2 nights. And on the upper end of the scale, a category 5 hotel is 12,000-16,000 Starpoints. Double that and you are getting a 24,000-32,000 bonus Starpoint value. So if you’re smart, you’ll book hotel that falls into the 16,000 redemption value.

You have a choice of a number of category 5 hotels worldwide; 6 St. Regis, 29 Luxury Collection, 17 W Hotels, 25 Le Meridien, 67 Westin, 58 Sheraton, 13 Aloft, 2 Element, and 12 Four Points. But keep in mind most of the Le Meridien, Westin and W’s are in a much higher category. More importantly, Starwood loyalty program members will not be able to add to their current Starpoint account balance, the 2 nights cannot be redeemed for cash or Starpoints, and the 2 nights must be used within 12 months after the nights are awarded. Plus, the credit card would only be valuable for those who want to stay in a lower category hotel and hopefully these rooms would be available within the timeframe allowed.

5 category chart

The merger and where it is today.

The merger – Marriott is shelling out 13.6 billion for Starwood Hotels – will create a supersized hotel chain with more than 1 million rooms and 5,700 properties worldwide. The deal has been percolating for a while, with Marriott President Arne Sorenson saying in 2015 the SPG program was one of the top reasons for the merge, and “devaluing points or member benefits is not the way to preserve and strengthen these programs, which is our aim.”

In theory, we are sure that he meant what he said. But in reality we don’t believe that the SPG can remain as robust unless the native Marriott Rewards become just as valuable, which is highly unlikely. Businesses are around to make money, and this new megalo-hotel chain is no different. So what do we think will happen?

Our predictions for the future of the SPG program and Marriott Rewards.

First, we think that it takes a long time to move mountains, and so combining these programs systematically will take a while. Additionally, minimizing the “piss-off” factor to some of your best customers is paramount. Arne is right, SPG is a very attractive asset to have. He knows just how much easier and cheaper it is to keep an existing customer than to go find and pay for a new one. That said, we think that the earning structure will remain the same, but the redemption structure will change.

Our guess is that Marriott will break up SPG properties, attach current Marriott Rewards Levels and Tiers to each, and increase the points needed for a stay, especially among some of the SPG properties abroad that are currently a really good point value. If they are smart, they will make sure to keep all Gold and Platinum status levels in tact, but will change the benefits that come along with them to mirror the Marriott Rewards program.

We can only hope that the changes are minor, and that our current points will not be devalued, or worse yet go away. Our advice is to use your Starpoints by the end of 2017 to get the most value from them. Our guess is that they are safe until then.

beautiful vista

Le Méridien Mahabaleshwar Resort & Spa in India is a SPG Category 5 hotel.

Starwood Preferred Guest® Credit Card from American Express

SPC American Express Card

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  • For the first time, earn 2 free nights at participating SPG® Category 1-5 hotels & resorts worldwide after you use your new Card to make $3,000 in purchases within the first 3 months.
  • Note: A select few resorts require additional fees. Offer ends 10/19/2016.
  • Redeem Starpoints® for free nights at over 1,300 hotels & resorts in over 100 countries.
  • Redeem Starpoints® for free flights on over 150 airlines with SPG Flights – all with no blackout dates. Some hotels and resorts have mandatory service charges.
  • No Foreign Transaction Fees on international purchases.
  • Free, unlimited Boingo Wi-Fi at more than 1,000,000 Boingo hotspots worldwide. Enrollment required.
  • $0 introductory annual fee for the first year, then $95.
  • Terms and conditions apply

Bonus
2 Free Nights

Intro APR
N/A

Ongoing APR
15.49%-19.49% variable

Annual Fee
$0 first year, then $95

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Editorial Note: Opinions expressed here are author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.