Starwood Merger Situation Leaves Rewards Points in Question

UPDATE March 18, 2016: Starwood Hotels has received an offer that it considers superior to Marriott’s. That offer comes from a consortium led by Anbang Insurance Group of China. With CNBC reporting that Marriott plans to make a counteroffer, it’s unlikely that Starwood’s fate will be decided anytime soon.

The key takeaway for Starwood Preferred Guest members is that an acquisition of Starwood by the Anbang consortium would have very different implications for the SPG rewards program. Marriott has its own rewards program, which would have to be integrated with SPG. The Anbang consortium has no pre-existing rewards program.

Below is NerdWallet’s article from Nov. 25, 2015, when Marriott’s offer for Starwood was first announced.

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Marriott International recently announced plans to acquire Starwood Hotels and Resorts. According to Marriott’s press release, the merger would create the world’s largest hotel chain. It would also give Marriott Rewards members access to Starwood’s portfolio of high-end locations.

The main concern for Starwood loyalists, however, is what will happen to their rewards points and elite status. Although it’s difficult to say what changes, if any, will occur, we’ll discuss why nothing will happen anytime soon and how your points may be affected if the two rewards programs eventually merge.

These things take time

Although the acquisition has been announced, government regulators must first approve it before the two companies can move forward. Marriott must then determine whether to keep the brands and rewards programs separate or consolidate them. Finally, it must decide which credit card issuer and payment network to use for its co-branded credit card to replace the Starwood Preferred Guest® Credit Card from American Express, if it decides to do so.

To give you an idea of how long this might take, the American Airlines-US Airways merger was announced in February 2013, but the two airlines’ rewards programs weren’t merged until the second quarter of 2015.

A side-by-side comparison

The Marriott Rewards and Starwood Preferred Guest programs are very different in terms of point value and elite perks. As of November 2015, the Starwood Preferred Guest program offers the most valuable rewards points of any hotel chain, according to NerdWallet calculations. Members get an average value of 2.3 cents per Starpoint when redeeming for free night stays, with a range of 1 to 4 cents per Starpoint, depending on the location and time of booking.

LEARN MORE: Starwood Preferred Guest

On the other hand, the Nerds value Marriott Rewards points at only 1 cent apiece on average, with a range of 0.5 to 1.7 cents per point. The table below, showing how many points each program requires for a free night stay by hotel category, is another testament to SPG’s value.

LEARN MORE: Marriott Rewards

Hotel Category	Marriott Rewards		Starwood Preferred Guest
Information current as of November 2015
	Hotel Reward	PointSavers Reward	Weekdays	Weekends
1	7,500	6,000	3,000	2,000
2	10,000	7,500	4,000	3,000
3	15,000	10,000	7,000	7,000
4	20,000	15,000	10,000	10,000
5	25,000	20,000	12,000 - 16,000	12,000 - 16,000
6	30,000	25,000	20,000 - 25,000	20,000 - 25,000
7	35,000	30,000	30,000 - 35,000	30,000 - 35,000
8	40,000	35,000	N/A	N/A
9	45,000	40,000	N/A	N/A

Two scenarios

Say you currently have 100,000 Starpoints. Based on NerdWallet’s valuation, your Starpoints are worth between $1,000 and $4,000, depending on how you redeem them. If Marriott converts your Starpoints into Marriott Rewards points, they’ll be worth between $500 and $1,700. That’s a massive devaluation — and if it comes into effect, it would be beneficial for you to use your Starpoints as quickly as possible once Marriott announces its intentions.

In another scenario, say you’re a Marriott Rewards member and Marriott chooses to keep the SPG rewards model for Starwood-branded hotels. It may offer an option to use your Marriott Rewards at Starwood hotels at a higher value. While this scenario is less likely, it would be an opportunity for frequent Marriott guests to experience what makes SPG so valuable to its members.

Elite perks

Another aspect that may not transfer well in the merger is the difference in elite perks. For example, SPG Platinum status gets you a 4 p.m. late checkout and a guaranteed free room upgrade to the best room available. Marriott, on the other hand, offers complimentary room upgrades and late checkout to Gold Elite and Platinum Elite members — but it doesn’t provide any guarantees.

Other SPG status perks that would be at risk if the programs merge are its complimentary health-club, Club-level and Executive-level access for Platinum members and lifetime Gold and Platinum status.

The bottom line

It’s still too early to say what changes will come to Starwood’s and Marriott’s rewards programs as a result of the merger. And once we do know, it will likely be longer still before those changes actually go into effect. Thus, members of both rewards programs should keep a close eye on their inbox to monitor any new developments that may change how their hard-earned rewards points are valued.