With respect to Starwood, one advantage has been no capacity controls--if there is a room avaialble for dollars you can have it for points. I understood SPG's deal with its property owners was that SPG had to pay more for this arrangement. I assumed it was close to full value--perhaps this is incorrect. At any rate, it must be more than H property owners get.

Ultimately, M and SPG have two choices--keep their redemption levels at the current rate or devalue their points as well. I think in the interim both will keep to the status quo and try to develop H's former customers. Certainly they launched any promotions without the expectation of devaluation, so the fact that a competitor devalues is a golden opportunity to attract new customers who previously were unavailable.

Of course, you should take my ramblings with a grain of salt since I'm sitting on almost 200K Hilton Pesos.