An interesting interview with Starwood CEO, Tom Mangas just came out earlier this week.
A few observations:
Question 4 - Confirmation that the loyalty programs will be combined as expected (it will just take time).
Question 5 - interesting that Starwood "wanted to be bigger in the upscale market". From my perspective I think some of SPG's upscale properties are nicer than Marriott's.
Questions 11 - Mangas says, "Marriott needs to learn about the special sauce" referring to SPG members concerns about the merger. An interesting statement when you think about how big the combined Marriott / SPG program will be and the larger the company the harder it can be to maintain a "special sauce" or competitive edge.
Question 13 - As brightlybob has pointed out in another post until the deal is finalized there is a possibility another buyer could sweep in (though unlikely)
Thoughts or perspectives from others after reading the interview?
Agree! Most if not all acquisitions/mergers have this clause to protect themselves from losses in wasted time and resources (MONEY). There also is usually baked-in some money if the Feds step-in and deny the acquisition or require a larger than expected divestiture of locations....
The real winners in acquisitions are the lawyers!!!!
Good Article...thanks for posting this. As I suspected there will ultimately one rewards program (Marriott Rewards). Hopefully the integration of the two programs will bring more value to Marriott Rewards. It will be interesting to see what happens. I'm curious what will become of the SPG Amex Card...will it go away completely or will there be a Marriott Amex option? Guess we will have to wait and see how it all unfolds.
Call me a pessimist, but I don't have confidence in us retaining value with Marriott Rewards. In certain ways, we'll see increased value via a larger portfolio of properties to choose from, but those popular properties will become much harder to get. I wouldn't be surprised if MR goes the way of the airlines and devalues the program further by adding a 10th category and perhaps make it easier to more difficult to earn points? We could potentially see a dilution of elite benefits. Ultimately, I wouldn't be surprised if the new program ends up being a mishmash of the worst of both programs.
Of course I hope I'm wrong, but from a business standpoint, this is the perfect opportunity to gut the program and make it more profitable for Marriott.
kharada46 (As far as the U.S. members are concerned you and I are the only two awake (1:30AM PST 11:30 Hst)
Hi "pessimist" (your request so I didn't want to disappoint).
I have news for you. You are not a pessimist! I believe the title of "realist" is more accurate.
We know that there is going to be change. We know we are not going to be in agreement with the changes.. We will complain. Our complaints will land on deaf ears. AND finally, some genius will tell us the overcrowding at CL's is a myth as they travel all over the world and never experienced a crowded lounge.
Good night to the Islands.
lol, I can always count on you, misterchk!
Yes, you're right, realist. But in "real life," people have come to know me as kind of a pessimist because of my views
All valid points though. You know, I find it funny that Mr. Sorenson keeps stating that he doesn't believe in devaluations... when that's all he's really done to our beloved MR since taking the helm...
Actually, we don't know most of that. We do know that there will be changes but we have no knowledge as to what those changes will be.
In all probability, we will like some of them and dislike others. We will gripe about the ones we don't like and most of those will be ignored.
Time will tell whether the merger will be good or bad for us!
The specified item was not found. I think that you are a bit too hard on Mr. Sorenson. While some benefits have been devalued, others have been enhanced. It now takes fewer paid stays to reach gold or Platinum. The United deal has been a big improvement for those of us who don't fly enough to gain elite status with any airline. The M Clubs appear to be a significant improvement in many hotels.
Very true phctourist, there have been some benefits added, but to me, they do not outweigh what we've lost. Of course, I value usability of my points most, as Elite benefits are too inconsistent to rely on, which is why I feel the way I do. I feel the same dismay with American, of course, as they continue to devalue their program and continue to nickel and dime paid fares... To be fair, I dislike Doug Parker of American way more than Mr. Sorenson. At least Mr. Sorenson hasn't made idiotic decisions like DP has
I agree to a certain extent phctourist, as Marriott has stated that categories are based on demand rather than actual property price. I've seen really expensive, yet unknown properties, in Cat 2, while relatively cheap properties, like the CY Waikiki, are a Cat 7. 35,000 pts/night seems an awful lot for a hotel that currently has nights selling for just $139/$129 kama'aina rate. A few years ago I could get a night there for about $110 at kama'aina rate, and it was a Cat 4. So while the standard rate has gone up just 17.3%, the point redemption rate has jumped a whopping 75%. This has also caused a devaluation of the Marriott Rewards Premier card from Chase, as many of us have discussed how we're no longer able to make use of the Cat 1-5 free night certificate any longer.
californian, yup! I rightfully assumed that's exactly what would happen since I knew Doug Parkers style... I LOATH the way he ran US Airways and was terrified of what he'd do to AA. While it all hasn't happened yet, I expect to many more negative changes over the course of the next year or two.
Now, Mr. Sorenson says he won't devalue as part of the merger, but again I don't believe... That's primarily what happened when he took the helm from Mr. Marriott... My hopes aren't high, but I'm interested to see what will happen nonetheless. At the same time, I've begun diversifying my loyalty and am planning for the worst..
kharada46 it is psychologically impossible to be a pessimist in Hawaii.
How can you start out each day in that paradise without a dose of "optimism".
It is possible, though, that you are forgetting a "wee bit" of vodka in your morning pineapple juice.
Easy misterchk, cost of living is TOO HIGH, nearly all of the new development occurring on the island is for people that earn far more than most residence do, really low wages (compared to cost of living) State legislature is all talk and no action concerning the extreme real estate issue in the islands and the mass exodus of Hawaii's best and brightest (thanks to real estate prices/cost of living/low wages), and just the general stupidity in this state (watching the news about local stuff just angers me... I could go on, and on, and on!)
I saw that many years ago. Native Hawaiians leaving the islands because they can't afford to live there. Something is wrong when this happens. Wealthy mainlanders moving there take the price of housing and land up. I noticed a considerable jump in restaurant prices my last visits. Talking to a local friend who thinks that the increase in minimum wage has caused this and forced some restaurants to close. When that happens, no jobs there. What a mess.
Most Hawaiians work more than one job and share housing.
Ah yes californian... Hit the problem right on the head! But that isn't the only one. Wealthy people that move here, or people that move here from anywhere in the world in general, want to keep Hawaii as it is and will do anything to prevent progress. Take the Hawaii SuperFerry debacle... The main opponents were people that weren't born here (at least on Kauai). And yup, multigenerational households are the almost the rule rather than the exception. The minimum wage hike was supposed to help move more people out of poverty since Hawaii businesses aren't willing to make contributions to that effort themselves, but (as everyone predicted) it just made things worst.
True change in government policy needs to happen, but never will...
Oh, and let's not forget the Native Hawaiians (indigenous people), also known as Kanaka Maoli, whom oppose almost ANY progress as well. They argue that we disrespect and desecrate the land and that the kings and queens would have never allowed this to happen... Unfortunately that couldn't be further from the truth. Hawaiian Royalty, dating all the way back to King Kamehameha I, were early adopters of the newest technology and always sought greater knowledge, even giving up enormous tracts of land for the progress of the Kingdom. Those that say they wish things the way they used to be are clearly ignorant of the fact that, especially during King Kam I's days, commoners had little freedoms/liberty. Life was much harder back then, and despite what them may think, most don't have any royal ties. It's actually sad to watch the whole "nation building" debate go on, as so many claim they're the rightful heir to the thrown, while Princess Kawananako lives on and is the true heiress. They also forget that the Royalty of the past welcomed all with open arms. Myself and my family, are by birth, subjects of the Kingdom of Hawaii as much as any full blooded Hawaiian is, but this has become a racial fight more than anything else.
Our great State is being torn in many directions and is full of so many problems from so many different sources, it's easy to see why so many choose to leave the island and never return. A brain drain is definitely taking place, though, more and more are moving simply because they can't handle the financial reality of living in paradise. I do love Hawaii, but I'm so dismayed about all of the problems face by us and the non-existent of real change in any aspect of life here.
kharada46 I must beg forgiveness when inquiring how someone can be depressed waking every morning in Hawaii.
Those of us on the Mainland who cherish Hawaii as an escape from our everyday stress or simply as a tropical paradise forget that there is a huge difference being a visitor/tourist and a resident.
A resident doesn't wake up and proceed to the beach or pool.. He/she must go and earn a living to support his/her family, suffer the same stress that the tourists have temporally escaped from and put up with the local problems facing citizens and local governments.
The tourist by the pool have no idea that the residents are also worrying about money for schools, police, health issues and many more problems.
So, my friend, forgive the previous post - and if you will continue to forgive my vision of your special place on the planet as being a paradise to me and my family.
It's all good misterchk. Hawaii is still paradise, and the immense stressors that we deal with on a daily basis has simply become known as "the price of paradise." It really shouldn't be this way, so that isn't an excuse, but it is. It's one my generation has tasked itself to correct, but I can already see huge divides forming (politically), so we'll see!!
I too, love to play tourist, so I know what you mean! Especially when we visit the other islands, we might as well be tourists! Neighbor island residents actually look at Honolulu residents with disdain because we're "too mainland like" if you can believe that haha!
But as we speak I've been forced into an unplanned "staycation" of sorts... We're having sewer issues at home (there's a whole legal issue surrounding that makes it more complicated) so the Mrs. and I are staying at the... Hyatt Place Waikiki! Right across the street from the Waikiki Beach Marriott... Now if only I didn't have to work...
misterchk I think that one can be a pessimist or an optimist, anywhere. It is in one's nature, as is being a realist.
To me, a realist (and I believe that I am one) is the person who looks at an 8 ounce glass that contains 4 ounces of Sangiovese and recognizes that it is both half full and half empty. The optimist sees it as full and the pessimist assumes it has turned to vinegar.
phctourist my friend, I have always been a realist - that is why on almost very post (on this subject) I have said wait and see.
I also have tried to point out to those members who are already surfing the SPG site to take a step back as we might be two years away from any concrete merging of programs.
I was referring to your post where you said "it is psychologically impossible to be a pessimist in Hawaii.
How can you start out each day in that paradise without a dose of "optimism"." My point is that a true pessimist can find the cloud in any silver lining and that a true optimist can find a silver lining in any cloud.
Like you, I am always aware that there is a whole continuum of possible outcomes to any event, whether it is my current health situation, or the Marriott Starwood merger. When my preliminary diagnosis was lung cancer, I was not without hope. Now that I am dealing with stage two lymphoma, which seems to responding to treatment, I am not without fear.
How else could I have survived being a Red Sox fan for almost 70 years?
Come on guys, let us not get so down and out on what us Marriott folks may or may not lose. We can all speculate and make it more fun or frustrating depending on what side of the "pessimist" pole you are on, but I'm going to wait and see (now that's not really me saying that is it).
We have history of mergers in the airline industry that everyone blasted from the start saying the frequent flyer programs will all be diluted and we lose. Now after all that has been said and done look what we've gained.......NOT A THING!!
I hate to agree with my Island bud, but I see a Category 10 on the horizon most likely before the merger is complete and if not certainly instantly after. Even with the influx of new properties we'll find less ability to use reward points and when you do they'll be at a much higher rate.
So there you have it, not a fan.
I have been playing around on Starwoods website. While I don't like the aesthetics of it, I do like I can just type in Texas, or Louisiana and all are listed. Maybe b/c there are not as many. Sorry Marriott, but I like to look at ALL of them and zoom around. I hate that I can only do 40 per page.
I don't think I will be staying at too many former Starwood properties though. Maybe loyal Starwood people feel the same way... Then you all won't have to worry about over OVER crowding in CLs... When I travel with my mom, she is Plat, and we don't even go to the CLs. We would rather go to the breakfast buffet or the bar downstairs.
I just like to get high floor rooms for the views. That alone makes me a happy camper.
I am going to stay optimistic about the merge. Being so new to the Rewards program and so low, I don't have much to lose. I can however see many of you alls concerns esp you all that have quite a high rank here.
vaboywnder, I agree it will be quite interesting to see what happens with the SPG Amex card. I have seen some blogs that have suggested picking up the SPG Amex (hedging that it will disappear shortly after the merger) as some are suggesting SPG points may be transitioned into Marriott at a 1:2 ratio. I would not mind if like Hilton there was a Amex and Chase Marriott card.
kharada46, I tend to agree with you, IAHFLYR, californian, and misterchk in that we will probably be worse off. In addition to Cat 10 I would not be surprised if we saw a new elite level (4 levels instead of 3).
SeaTexan, from those I talk to who are SPG loyalists they seem to be much more concerned then Marriott loyalists, but like you I am trying to be optimistic (at least about some of the nice new SPG properties we will have access to).
I think it's imperative for Amex to keep its SPG jakeal, but knowing the tight relationship between Marriott and Chase, and all the clout Chase has, that's going to be a BIG struggle for them. It would be nice to have both exist as is the case with Hilton, but I'm doubtful.
I love AMX too SeaTexan, but they're getting harder to use! Besides, the places I do use my AMX at, it makes more sense to use my Everyday Preferred card, since it's 3x pts for groceries, 2x pts for gas, and a 50% pt bonus for reaching 30 transactions during that billing cycle! I'm now debating if I want to transfer my growing stockpile of points into my Hawaiian Air account and go somewhere, or transfer them into my SPG account and turn them into Marriott Rewards points later??
kharada46 I do agree about getting harder to use them... People tell me AMX is too proud of their card and the percent is not worth the store accepting. I like to shop local, and many of the local shops don't accept AMX.
I like the security and the customer service.
Do you know if I can trade all my AMX points to SPG?.............and then later into Marriott!! ;D
SeaTexan - it was sad to see AMEX's Small Business Saturday go to the wayside this past November
To answer your question about AMEX to SPG - yes, you can transfer AMEX Membership Rewards (MR) points to SPG at a ration of 333 SPG = 1,000 MR assuming you have a MR earning card. If the merger goes through, once they decide how to merge the two loyalty programs a determination will be made how to convert SPG points into the new combined loyalty program. It will definitely be more complicated than the US Air / AA merger where it was an easy 1:1 conversion.
SeaTexan, I think their problems are much deeper than being too proud. Their entire business model is in need of a change. They're kind of entering the fight of their lives at the moment. This, of course, could be a bad thing, but if it doesn't end up being bad, it could also provide great benefits for consumers.
At any rate, here's some industry news that may interest you a little: Amex 2016 Guidance, Apple Earnings Forecast | PYMNTS.com
Thanks kharada46! That was an interesting read. I think AMX and Apple will pull thru! I hope they do! I love both. I have loved apple before apple was even popular. My parents opened a store in the 80s and did some serious struggling, being loyal has paid off. Until I got a real job, apple was the only computer I even knew.
Apple should support AutoCAD and REVIT better, they missed the boat on that one too. So I am stuck using a PC!
I didn't realize Amex was hurting so much!
I cannot believe it's difficult to use AMEX in LFT, really? I have absolutely no issue with the card anywhere around here nor most places we travel domestically, in fact cannot remember anytime it was refused. Now in Europe, Mexico, South America and Caribbean it is often not accepted yet I will still take it along just in case the merchant will accept it.
I'm right there with ya on AMEX Security and Customer Service Departments the very few times I've ever used them.
Yes, my experience also is many smaller local places will not accept it, but will accept Visa and/or MC. AMEX fees are higher, and smaller places don't want to pay it, and most people with AMEX also carry a Visa or MC so probably does not hurt their business very much. Many local (not chain) restaurants are like this, which doesn't bother me as I'd prefer to get the 2x points on my Marriott Visa than 1 point on my AMEX anyway.
I have a summer home in New Hampshire and I bet at least half of the merchants will not take AX. I would expect when Costco changes to a Visa I will use that card and my Marriott Visa . Will be no need to have an AX. At one point many years ago AX was the chosen card international but I even had several merchants in Europe that would not except AX but have none that wouldn't accept Visa or MC
Yes, I travel to Germany for work once in a while, and at least in the small city we go to, other than hotels there are not many places that accept the corporate AMEX, so need to find ATM that can take AMEX to get Euros to pay for many things. A few years ago, downtown hotels were all booked for an event, so a coworker stayed in a tiny gasthaus outside the city and had to pay hundreds of Euros in cash for a week's stay as they do not accept AMEX.
I am having the same internal debate kharada46. I probably won't send my entire MR balance to Starwood, but as things become clearer on what ratio SPG points will be converted I may move some (especially if the conversion is favorable).
Thank you for the interesting article. I, too, am taking a wait and see attitude, but, like iahflyr, am not a fan. I agree with him that a category 10 is probably in the offing. I'm not sure how the two rewards programs can be successfully integrated when the Starwood program requires many fewer nights to achieve the top level. I suspect that Starwood Rewards members may make out better than we do, at least initially, in that they will be entitled to our Gold and Platinum benefits with a lower requirements threshold. It will also be interesting to see if Starwood properties customers tend to remain loyal to them, or come over to Marriott branded properties. In many situations such as this, the companies merge, but the customers remain loyal to the properties that they got used to. The only thing we can do is wait and see. There are too many other things to get concerned about (for example, here in NH moving a rock and finding a candidate for President, at least until Tuesday!).
My comment is not necessarily a concern but an observation.
This merger is HUGE! It is actually larger and more difficult than a large airline merger. (We all have our own "war" stories of airline mergers).
The number of properties and employees are very similar or larger in numbers than an air carrier's numbers in planes and staff. Furthermore there is very few staff dismissals as the only duplicate services are corporate/headquarter employees.
I am a layman, with no knowledge whatsoever in how to tackle this type of endeavor. I'm on record a few months ago as estimating integration of the reward plans at one year minimum after the close.
Now, armed with much more info I am wondering if the programs will be merged within two years of the completion of the sale.
Anyone in denial about the frustrations and inconveniences we will experience during this period should join elsewhere.
This merger will require patience by all involved. Unfortunately "patience" has never been my "strong suit".
Addendum to earlier post:
(from press statements)
"Today, Marriott Rewards, with 54 million members, and Starwood Preferred Guest, with 21 million members, are among the industry’s most-awarded loyalty programs...."
Researching the United - Continental Merger I found (unsubstantiated) estimates that there were 40 million Mileage Plus members - I use this as an example to show that the Marriott-Starwood merger is larger.
I think it makes sense that Hotel loyalty would be higher than airlines. Unless you travel quite a bit, I believe most air travelers are looking for the cheapest flights vs. looking at the airline they are on as it is often just a 3 to 4 hour experience (destination will impact that number) vs. a hotel where you are talking about days and spending a fairly large amount of your time there....
With that said, point well taken on the size of this merger....
I would agree that it could take two years to fully merge the rewards programs as well as the reservation systems. . But I would think that the ability to use each others card in the other property will come sooner. Until they get thru anti trust they will remain separate and that could take some time
I'm very much in your camp, ericwynn, subscribing as I do to my fathers mantra:
"Whether you're and optimist or a pessimist makes no difference to the outcome, but an optimist has a better time waiting!"
jakeal I logged back into the community just for this information so thank you!
I think this merger will be the best thing that could have happened to Marriott. Honestly I was super close to leaving Marriott for Starwood. I have always considered Marriott as family but SPG was simply more attractive. I believe that SPG has better luxury properties and they have a better understanding of what my generation is looking for in a hotel. If Marriott could not just absorb SPG but also learn from what made them so popular then we all win. Looking forward to when I can stay at the St Regis guilt free!!
Welcome to the forum - you mention in your bio that you want to converse with "like minded people" - Well, if you are like minded with this group (including Moi) AND only in your 20's -you have a serious problem, and you will probably be institutionalized by the time you are 40 -
Any resemblance to normality among us is purely accidental.
I suggest getting psychiatric help at the earliest possible opportunity.
My dear SeaTexan, I have been accused of, and admit to, being:
and a few more including Harmless -
I have never been accused of being scary!
Do you doubt I'm harmless? Sure, I was on trial a few years ago for violence, and about 12 years ago for attempted murder, but I was acquitted on both occasions.
misterchk All these accusations are probably accurate, but in spite of it all, you're actually not a bad guy! I actually think of you as a friend!!!