Now that the merger of Starwood and Marriott has been fully approved (the last hurdle was Chinese regulators), we’re already beginning to see hints of what the future of their two loyalty programs might look like.
The SPG Business credit card from American Express, for example typically rotates between a standard 25,000-point sign up offer and a limited time 30,000-point offer but is now promoting, instead, two free nights at a Category 1-5 hotel. The logic of awarding free nights instead of free points is appealing (to the business owner) in several ways:
- Free nights are more likely to expire before they are redeemed. Points can be extended indefinitely by keeping the account active.
- Points can be used more flexibly, perhaps by transferring them to an external program, while free nights can only be used at SPG hotels.
- Converting points between the SPG and Marriott programs will have a cost, and there’s not much sense in adding to that cost when other promotions can be substituted.
While a free night is potentially worth more than points — two free nights are worth as much as 32,000 points — this also prevents you from taking advantage of Starwood’s fifth night free offer when you redeem points for five nights or more. You can’t redeem a mix of points and free night certificates to get the same offer. That reduces the potential liability of the points even further.
Finally, there is a rumor shared by Head for Points that Starpoints will convert to Marriott Rewards points at a ratio of 1:3. His rumor is difficult to substantiate other than my personal trust for him and his in his reader. But I think the evidence from the new business credit card offer can add some support.
Marriott is promoting 80,000 points to its new new business cardholders. Had Starwood continued to offer 30,000 points, that would be equivalent to 90,000 points once converted, creating an arbitrage opportunity. Providing free nights instead of points for the SPG business card nips that in the bud.
I’m probably extrapolating and guessing more than I can justify, but my point is just to show how the new business card offer supports a rumor of a 1:3 transfer ratio. At least now we have some ability to weigh the value of our points before and after the programs’ consolidation, and that may lead some people to work harder than others to redeem the points they’ve already accumulated.