Originally Posted by VA1379

Marriott is well within its right to make any changes to Marriott Rewards and amenities offered for elite members. There is no legal binding contract that Marriott must offer any special benefits to its most frequent customers. However, there is also no legal requirement that I spend my lodging dollars with Marriott.

It would be a understatement to say that many people on FT have not been pleased with the recent changes (increased point costs for awards, reduced offerings in concierge lounges during the week, reduction of extra benefits at properties that had previously exceeded the required standard [weekend lounge closings and loss of free breakfast coupons for gold/platinum members], and loss of room amenities [smaller water bottles, no lotion/mouthwash]). People on FT (and Marriott's own board for elite members) do not like being told by Ed French that Marriott Rewards is becoming a better program when it is not in their own eyes. Yes, companies like to put a positive spin on all changes, but customers are not stupid. A well known Lincoln story that a dog has 4 legs even if you call its tail a leg would be an apt metaphor here.

Just because a company can do something does not mean that it should. Yes, the economy is not doing well, and it is hitting hotel companies hard. However, the attempts to cut costs while trying to hold room rates up (maintain pricing integrity) does not go down well when anyone with a brain knows that room occupancy rates have dropped a great deal. I do not appreciate being squeezed for extra money to help keep hotels running in a weak economy. The discounted rates that I pay are still much higher than anything a hotel can get from selling inventory on opaque channels (priceline, hotwire, and etc.).

Marriott has decided to test the limits of customer goodwill. Some customers may not notice or care about the recent changes. It is hard for me to not notice these changes as someone who has put more than 300 paid nights at Marriott properties since 2006. The customers that do care will start voting with their feet and wallets. Over time, this will reduce the revenue growth at Marriott properties. Diminished expectations will lead to reduced revenue because people will be less willing to pay as much when the economy recovers. This lost goodwill does not show up on a balance sheet immediately, but it eventually appears on the revenue and P&L statements.

Home Depot made a similar change when its founders retired in 2000. Bob Nardelli decided that it was too expensive to keep up the customer service and chose to "save" money by cutting back on labor costs (replacing experienced workers with cheaper ones) and reducing the responsiveness to customer complaints. Many "high maintenance" customers decided that they did not want to do business with the "new" Home Depot. If you look at Home Depot's stock price from 2000 to now, you will see that it has underperformed its main competitor, Lowe's.

This recession will be long and deep. Marriott's attempt to cater to large business groups while telling the individual traveler (business or leisure) to go pound sand will not work. The attempt at rate integrity will fail because demand for travel will not recover as fast as the most recent 3 or 4 recessions.