Update: Overview of the new SPG and Marriott program (2018)

Thanks for the fun memories at Disney World, SPG!

Update: New category assignments of SPG, Marriott, and Ritz properties under the new program have been released! Click here to see the full list.

For the past 5 years, Starwood Preferred Guest has been my favorite hotel loyalty program.  In addition to great redemption opportunities for free hotel stays, the program also has great airline transfer partners to which you can transfer points at a 1:1 ratio and with a potential for a bonus.

In 2016, Marriott acquired SPG.  I knew that at some point that meant the SPG program as we know it would be eliminated.  Until Monday, we did not have a very good timeline or many details about the future (demise) of SPG.

Now that we have more information, here are some take-aways:

  • My opinion: It could be worse.  Overall, it’s still going to be a solid hotel program.
  • Existing SPG points and SPG points that are earned prior to August 1 will retain their value.
  • After August 1, existing SPG points may actually become more valuable when redeemed for hotel stays.
  • After August 1, earn more points per dollar on paid stays
  • Also after August 1, there is one method of earning points that will result in a net devaluation: points earned from credit card spending. This is a pretty significant blow.
  • Airline transfer partners are not going away!
  • I’m going to revisit my go-to everyday spending credit card after August 1

I’ll highlight some key details in this post. You can read more on Marriott’s website.   I’ll go into more specific details about different aspects of the new program in future posts but for now I just wanted to give an overview.

Marriott Rewards, Ritz Carlton Rewards, and Starwood Preferred Guest will combine into one program on August 1, 2018

  • Any changes discussed below go into effect on August 1.
  • Any award stays booked prior to August 1 with either program are subject to current award charts of each program.
  • Award stays that begin after August 1 are still subject to current pricing if booked prior to August 1.

What happens to Starpoints on August 1?

They will automatically be converted to the new currency at a ratio of 1:3.  This matches the current ratio.  You can already transfer SPG to Marriott at a ratio of 1:3 and vice versa.

After August 1, all award stays at SPG properties will be booked with the new program.

What happens to Marriott Rewards points and Ritz Carlton Rewards points on August 1?

They remain as is. If you have 25,000 Marriott Rewards on July 31, you will still have 25,000 points on August 1.

Assuming you agree with the 1:3 ratio, existing SPG points will retain their value (and possibly gain value) even after August 1

There are many factors that determine the value of any given point/award currency.  So it is important to remember that not all points are equal.  Even Marriott knows this.  It would be unfair to value SPG points the same as Marriott Rewards.  So they’ve already given us the option to transfer at a 1:3 ratio.  I personally feel that this is a fair exchange.  I would even go so far as saying it’s more generous than I expected.  Marriott clearly wants to retain SPG loyalists once the programs combine.

If you look at each program’s chart, their lowest categories even reflect a 1:3 ratio.

  • SPG category 1 free nights start at 2,000 Starpoints per night
  • Marriott category 1 free nights start at 6,000 points per night

Not all categories reflect 1:3, but it helps to illustrate why the 1:3 ratio is necessary.

Marriott and SPG combined program

Marriott’s award chart until August 1

SPG and Marriott combined program

SPG’s award chart for weekday redemptions until August 1

SPG’s award chart for weekend redemptions until August 1

Current award charts will be eliminated and replaced with a single chart with 8 categories

In order to align Starpoints with Marriott Rewards, changes had to be made.  Basically, they are going to inflate Starpoints to reduce the disparity between the two currencies.  So while this chart looks a little scary, keep in mind that points are going to be easier to earn.

Right now, we do not know which properties fall into which categories.  New category designations are expected sometime this summer.  I’ve heard June and I’ve also heard August.

It’s tough to really get an idea of how far your points will go in the new program since we do not yet know category assignments.  But it’s safe to say that SPG’s higher end properties are going to come at quite a discount at least temporarily.   I’ll go into more details and the math behind this in a separate post, but award nights at some properties will come at a discount of 33% or more when compared with current redemption rates!

The 5th night is still free on an award stay

Right now, both Starwood and Marriott offer a 5th night free on award stays at most properties.  This translates to a 20% discount.  This will continue!

Airline transfer partners are NOT going away

I sometimes think of SPG as an airline mile program rather than a hotel loyalty program.  Currently, you can transfer SPG points to several airlines at a 1:1 ratio and with a bonus 5,000 for every 20,000 transferred.

The good news is, they are pretty much keeping the program as is, but the numbers are just inflating to match the 1:3 ratio.  So, if you have 20,000 SPG points, right now, you can transfer them to an airline and then receive a bonus of 5,000 miles for every 20,000 transferred.  This gets you 25,000 miles total.

When the new program is implemented, you can transfer points to airlines but at a 3:1 ratio.  So, 60,000 points=20,000 airline miles.  They are keeping the bonus, but instead of receiving a bonus at 20,000 points, it will be 15,000 points for every 60,000.  This is exactly the same as what SPG has in place currently.  If you have 20,000 SPG points in your account on August 1, they’re going to get converted to 60,000 points.  You can then transfer those 60,000 points to an airline, and you will receive a 15,000 point bonus for a total of 75,000 points.  With the 3:1 ratio when transferring points to airline miles, 75,000 points will equal 25,000 miles.

So on the redemption side, nothing is changing with the airline program.  In fact, it’s getting a little better because new airline partners will be added.

Earn rate for paid hotel stays is at least 10 points per dollar

This will be even more if you have elite status or if you have a Marriott or SPG co-branded credit card.

Currently, an SPG member with no status earns 2 points per dollar on paid stays.  Even after taking into account the 1:3 ratio that’s 6 points per dollar.

So the new program wins by a long shot in terms of earning points on paid stays.

You will still be able to pool your points with another family member

If you have enough points for 2 nights and your partner has enough for 2 nights, you can each book the 2 nights for a total of 4 nights.  But since the 5th night is free, it’s better to pool your points together and book 4 nights from 1 account! There are several other scenarios in which you may benefit from being able to share points with family.   Currently, SPG allows you to share with a household member for free.  After August 1, the program will still allow this!

Elite Status changes

There will be changes to elite qualifications and benefits.  This is the new structure for earning elite status:

  • Silver Elite: 10-24 nights (or Amex SPG cardholder)
  • Gold Elite: 25-49 nights (or Amex SPG luxury cardholder)
  • Platinum Elite: 50-74 nights (can also be earned through credit card spend with new luxury SPG Amex)
  • Platinum Premier Elite: 75-99 nights
  • Platinum Premier Elite with Ambassador: 100+ nights AND $20k in Qualifying Spend

You can read more about benefits of each new tier here.

One change to note is loss of lounge access/breakfast to Marriott Gold.  This isn’t necessarily a devaluation though, because the 50 nights required for the new Platinum (which does give lounge access and breakfast) is the current requirement for Marriott Gold status.  In other words, it’s merely a name change IF you earn your status through actual stays rather than through shortcuts.

On the other hand, if you’ve earned SPG Gold or Marriott Gold through a shortcut such as having an Amex Platinum or through a status match, your new status will be Gold Elite.

In August, this is how the new program will match your SPG status.

Currently, SPG Gold (complimentary with Amex Platinum) matches to Marriott Gold.  In August, Marriott Gold matches to Platinum Elite.  Ryan has Marriott Gold.  But he has Marriott Gold because he was matched from SPG Gold.  So it seems that having Marriott Gold would give him Platinum Elite after August. But his SPG Gold status (and thus his Marriott Gold status) came from a shortcut (having the Amex Platinum) rather than hotel stays.  So the question is does he get Gold Elite to match SPG Gold or Platinum Elite to match Marriott Gold?

The Points Guy asked about this in a Q & A with David Flueck, the SVP of Global Loyalty for Marriott.  According to Flueck, the answer is Gold Elite.  But to be honest, I watched the video and I’m not sure that he really understood what TPG was asking.  So I guess we will find out in August.

Now for the bad news. Let’s talk about credit cards.

In addition to changes on current credit cards, some new credit card products are also going to be available.  Chase is issuing a new Marriott card in May.  American Express is launching a premium SPG card in August.   Nothing is changing for current SPG Amex cardholders until August 1, but the sign up bonus of 25,000 Starpoints is no longer available.

I will go into more details in a separate post because this certainly deserves its own post.  But I want to go over the most significant change.

The SPG Amex is essentially devaluing the earn rate

What is changing after August 1 is the earning side with respect to points earned from credit card spending.  This is actually a pretty significant devaluation of 33%.

Right now, any non-category bonus spend on the SPG Amex earns 1 point per dollar.  But since 1 Starpoint equals 3 points in Marriott and in the new program, think of it as earning 3 points per dollar.  Well, as of August 1, the earn rate will be 2 points per dollar. You might think that sounds great, but remember, on August 1, the transfer ratio is going away! So 2 points is 2 points.

This may end up being a wash if you use Starpoints for free hotel nights. We will have to wait until category assignments are released to get a better idea, but remember I said there are properties that are going to cost at least 33% less for redemptions.  So losing 33% on the earning side results in zero change if points are 33% more valuable on free night redemptions.

But if you’re like me and you consider Starpoints airline miles just as much as they are hotel points, the biggest issue with this devaluation is going to be the airline transfer program.

Those of us who use SPG points as air miles are hurting right now

SPG has a few airline partners that other programs such as Chase Ultimate Rewards and Amex Membership Rewards do not have.  Some of SPG’s partners have some amazing sweet spots.

For example, Japan Airlines is in the OneWorld alliance with AA, so you can use Japan Airlines miles to book AA flights. For many routes, Japan Airlines charges less than AAdvantage does.

  • DFW to Buenos Aires in business class on AA is as low as 80,000 Japan Airlines miles roundtrip.
  • To compare, AAdvantage charges 57,500 miles each way or 115,000 miles roundtrip on the exact same flights.
  • Japan Airlines and American Airlines are both transfer partners of SPG, so I have a choice.  But I can book the flight for way less by transferring my SPG points to JAL and then using Japan Airlines miles to book.
  • Japan Airlines is not a partner of Amex MR, Chase UR, or Citi Thank You.
  • Right now, 65,000 SPG points will get you 80,000 miles (thanks to the 5,000 mile bonus for every 20,000 transferred)
  • That means you can get a roundtrip business class flight to Argentina for as low as 65,000 SPG points.

I am definitely going to be rethinking my everyday spending strategy after August 1.  Remember, I am talking specifically about non-category spend.  In other words, purchases that earn 1 point per dollar no matter which credit card you use.

The good news is that there are still programs such as American Express Membership Rewards and Chase Ultimate Rewards that earn 1 point per dollar and transfer to different airlines at a 1:1 ratio.   These programs have their own partners with some sweet spots.  I’ll be fine without the SPG airline transfer program as we know it, but it’s definitely a loss.

One possible consolation to the SPG credit card situation is that Amex will be offering a premium version of the SPG credit card.

First of all, this means a new opportunity to earn a sign up bonus!  Yes, premium means high annual fee ($450 in this case).  But the benefits and statements credits seem to be worth the fee, at least for the first year when you include the value of a sign up bonus.  I’ll discuss this and other SPG/Marriott credit card products soon. This card will be available beginning in August.

The earn rate isn’t any better except for the fact that you earn 3 points per dollar on dining and flights.  So I probably still won’t use it for everyday spending.

Air and hotel packages are still going to be available, but we have no details as far as pricing right now

I’ve written about potential savings when booking SPG Nights & Flights packages. Marriott also offers similar packages that can be a great use of your points.  The good news is that these packages will still be available in the new program.   At this time, there is no information available as far as pricing, so it’s tough to say whether or not these packages will still be a good deal.

Things we don’t know yet:

Which properties will be assigned to which category

It”s tough to give a complete analysis on the new program without knowing which properties will be assigned to each category.  This is kind of the last piece of the puzzle for me.  Then I can really find the sweet and not-so-sweet spots of the new program.

You can probably assume that most SPG category 7 properties are going to remain category 7 (and some category 8 when that is implemented 2019).  Marriott category 8 and 9 properties will probably also become category 7 and 8 under the new program.  Other than that, we will have to wait for more information.

The new loyalty program still doesn’t have a name.

It is expected that we won’t know the name until 2019. I really don’t care other than the fact that I’m tired of typing out “the new SPG/Marriott/Ritz Carlton program”.

Pricing for air mile and hotel packages

Currently, you can get 120,000 miles to several airlines such as Alaska Airlines plus 7 nights at a Marriott category 1-5 property for just 90,000 Starpoints.

Remember, we’re still at a 1:3 transfer ratio.  Since 90,000 Starpoints=270,000 Marriott Rewards at this time, that means 90,000 Starpoints gets you 120,000 Alaska Airlines miles AND 7 nights at a category 1-5 property. Note that at this time, you can upgrade your hotel stay to a higher category property for more points.  As with SPG Nights and Flights, the airline miles are deposited to your airline account.  Once in the airline account, you can use them however you please.  That means that the miles and the hotel stay do not have to be used for the same trip.

Anyway, 120,000 Alaska Airlines miles for 90,000 Starpoints is a good deal even without the hotel stay (if you take advantage of Alaska Airlines’ sweet spots)!  It will be interesting to see the new pricing.

Pricing for suites and room upgrades

Currently, you can use more points to book upgraded rooms (as opposed to standard rooms). This will still be an option, but there is no information about rates at this time.

Summary

  • Nothing is changing until August 1
  • Overall the changes seem mostly positive for those who use SPG points for hotel stays
  • For those who like to use Starpoints as air miles, credit card changes are mostly bad news with an earning potential of 33% less airline miles than now.
  • Any SPG points earned between now and August 1 will retain their value as airline miles even after August 1.  It’s after August 1 when the credit card earning devaluation starts.  Anything earned before retains its value thanks to the 1:3 ratio.

RIP to my favorite credit card for everyday spending! This definitely could have been worse though.  I’ll wait until categories are announced before I try to fully analyze the value of points in the new program.

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