SkiAdcock

And while everyone is in limbo wondering if China will approve the deal, when the deal will close, when we'll get specific info on how the programs will merge & what they should do moving forward, I bring you a really nice 'feel good' story from the Marriott side.

I post this knowing there are SPG properties who would do the same, so it is definitely not a only Marriott would do this & I hope no one takes it that way, but given we don't have specifics re: the Marriott/SPG deal at this moment & this thread has meandered a bit over the thousands of posts, I hope the mods will allow this post to remain. Because besides the Ritz Carlton Aruba doing a bang up job, it also truly reminds us of what's really important in life - and that's loved ones, friends and family.

http://www.flyertalk.com/forum/marri...-rc-aruba.html

Cheers.

submonte

A very unfair attempt, indeed. I see no objective reasons to refuse that deal. The hotel (luxury) market is so big, I do not believe antitrust rules are breached anywhere, there is no danger of a monopole.


I had a generous Platinum challenge from SPG which I could not use unfortunatelly and have got a still valid generous offer from Marriott for double nights for one night counting towards elite status which I started to use already. IMHO if I may express my opinion here in this forum as a currently non elite member in both programs (was Marriott Gold and SPG Gold) I would see many advantages for the joint group and program as it will radiate enormous attractivity to potential guests all over the world in general and members of other loyalty programs in special, and one has not to decide between the seperate programs which makes him rather stay at his current programs. Of course I would understand if SPG members do not agree to that project which is their right. I do see no negative influence on quality of Starwood hotels and service by the merger as I have been recently to some Marriott hotels where I felt (treated) better than in some Leading Hotels.

And yes, life goes on so or so. Thank you very much also for reminding us about the real important things in life. I have read the Omni thread now upon your post. All the best to Mrs. Vker. And: Excellent service and care by RC Aruba, my compliments.

stimpy

The objective reason you may be missing is that the US blocks deals that Chinese is involved or even loosely involved in. In fact anything remotely suggesting Chinese involvement can be blocked by the US, even when it is Chinese companies buying European companies. Check out the Committee on Foreign Investment in the U.S., or CFIUS.

Visconti

If that's the case (from a SPG valuation perspective), let's hope the PRC plays "tit for tat" and hold up this deal in perpetuity.

SkiAdcock

This link talks more about the possible scenarios w/ the Chinese:

http://seekingalpha.com/article/3999...igniter-widget

Cheers.

bocastephen

I'm no fan of the repulsive govt of communist China, but in this case I am really hoping they play protectionist and block the deal, or at least stall it until both companies give up.

stimpy

Here is an example of the US killing a Euro-Chinese deal....

On Friday, Philips NV said it was terminating its $2.8 billion deal to sell its lighting-components and automotive-lighting business to Go Scale Capital, an investment fund led by Chinese venture-capital firm GSR Ventures.

That deal—with neither of the principal actors being American—wouldn’t be considered a likely target for CFIUS to inspect for potential impacts on U.S. national security. But the Philips business that is on the block, called Lumileds, has a large portfolio of U.S. patents for light-emitting diodes, or LED, and a sizable presence in the U.S. through manufacturing and research-and-development facilities in San Jose, Calif. That, apparently, was enough to attract the attention of CFIUS, which blocked the deal.

http://www.wsj.com/articles/europe-c...iny-1453680070

Visconti

I'm assuming the deal will eventually close and SPG will be merged into MR. I've already moved on and embraced a future without SPG, unless the deal miraculously falls apart. I've never adopted the "wait and see" approach, and certainly will not make an exception here.

The only thing that matters now is how to handle existing SPG currency and it's potential devaluation. Regarding points (from an SPG's perspective), these are the following scenarios:

1. Poor conversion (1:1)
2. Fair conversion (3:1 ?)
3. Favorable conversion (>3:1)

If scenario 1, mind as well burn ALL points immediately. No point in waiting. For example, those who waited on AA face zero availability on Int'l F and F transcon, where they were all readily available for redemption in earlier this year (may open up later, but you're at their mercy now). Same could happen with SPG, where awards are either (1) unavailable, or (2) FF transfers restricted (worst case scenario).

In scenario 2, for those who find value in MAR requiring a larger footprint, there's no compelling reason to burn points. The status quo should be fine for these folks.

In scenario 3 (unlikely), embrace the new MR and hoard SPG points. Matter of fact, ignore any other CC and focus all spending exclusively on Amex SPGs.

I'm betting on scenario 1, or a conversion rate of at most 2:1. MAR is the purchaser and would be reticent to punish their own members. However, there's a "prisoner's dilemma" conundrum to the individual with tons of SPG points. Namely, the timing on when to cash out before the programs officially merge. If everyone cashes out, there is no surplus for MAR to capture. I mean, what would be the point of devaluation? There's nothing to devalue! So, those who held out may realize a very favorable rate, since it'll cost MAR nothing and would prove to good PR, assuming they can keep their existing Elites happy.

My bet? The majority will believe the PR rubbish and allow their SPG points to convert. Once conversion is complete, MAR may then devalue to capture the surplus and transfer to their members. The prudent course would be to head for the exits sooner than later. In other words, burn SPG points and hoard MR points, since the general public will fall for the PR hype and adopt the "wait and see" approach, as they always do.

Any speculation on what the conversion rate will be?

JoeWoodstock

With over 1,000 posts in this thread, it's unfortunate that there has been absolutely no speculation about an SPG -> MR conversion rate.

So, let's start! My guess is pi:1.

--woodstock

UA-NYC

Basically just about any conversion rate will alienate SPG loyals, so I say they just go whole hog in the other direction and offer up 2 SPG : 1 MR

bhrubin

My guess is that conversion will be between 2:1 and 3:1. Most likely perhaps is 2.5:1, actually. Marriott won't want to see mass award redemptions by disappointed/angry SPG members if they aren't generous enough...which is what will happen if Marriott gives even 2:1. Plus, Marrriott has conceded already that one of Starwood's biggest selling points is the luxury hotel customer base that is the most loyal of any hotel chain in the world--with 50% of all SPG stays being from SPG members. Alienating that elite SPG customer base who likely have the most SPG points isn't the best way to retain them as customers. Marriott doesn't want to lose them to Hyatt, Hilton, or IHG as a default defect reaction to Marriott being stupidly stingy.

Marriott has more to gain (e.g. a lot of very affluent SPG customers) and less to lose (points?!?) by giving a better conversion rate. It can always devalue later if it misjudged.

I've already burned between myself and my hubby over 1 million SPG points in (1) transfers to to AA and Lufthansa and (2) awards at wonderful SPG hotels. I've got Lufthansa F/C LAX-FRA-VCE (82,500 miles) in a few weeks, with award stays at Gritti Palace Venice, Excelsior Gallia Milan, and Park Tower London, and AA F LHR-LAX (62,500 miles). I've got StR Dubai in Feb. My hubby and I got AA F LAX-SYD (110k miles) in May, with award stay at Westin Sydney (and also Park Hyatt Sydney using Chase/Hyatt points and credit card), and AA SYD-LAX (110k miles). I got my Mom AA C BWI-LAX-SYD (80k miles) and incredibly QF F SYD-DFW-BWI (100K AA miles) for May with us.

I'm also staying at more of my SPG aspirational properties in the coming year as much as I can...in order to enjoy my Ambassador privileges and Platinum suite upgrades as much as possible--since those could end with Marriott's new program. Between the announcement of the merger and next year, I have had or will have had mostly award stays at the StR Punta Mita, StR San Francisco, StR Mexico City, StR Rome, StR Bora Bora, StR Bal Harbour Miami, StR NYC, StR Bahia Beach, StR Kauai, StR Dubai, Gritti Palace Venice, Excelsior Gallia Milan, Hotel Imperial Vienna, Park Tower Knightsbridge London, Schloss Fuschl Salzburg, The Liberty Boston, The Chatwal NYC, and Prince de Galles Paris. Not bad for burning points, if you ask me...especially when I'll get superior value on those points with likely upgrades.

I still have nearly 700K SPG points left. My hubby has another 250k left. We will earn more even this fall and throughout next year...awaiting word on what a final Marriott merged program might look like. Before that, we likely will transfer more points to miles as a hedge, just to be safe and to take advantage of the most powerful airline transfer bonus in the industry while it lasts.

Kagehitokiri

and they might even plan that. basically having a number of possible levels of devaluation all ready to go. or multiple stages of devaluation of points/benefits/etc. which they can do over time, and customize as they are watching what is happening after merged program actually launches.

PHLGovFlyer

Assuming that the points per night cost of legacy SPG properties will be modified by the same conversion rate used for existing SPG points accounts your purchasing power with legacy SPG properties would be unchanged. As an example, if I get 2 MR points for each of my SPG points I would expect a 20,000 point per night SPG property to become a 40,000 point MR property going forward. If my assumption is correct, the purchasing power of my converted SPG points at legacy SPG properties will not change at all, regardless of the conversion ratio.

The SPG:MR conversion ratio obviously affects purchasing power of legacy SPG points at the legacy MR properties, so this is where a higher conversion ratio would be beneficial to legacy SPG accounts in the short term. However, going forward a lower conversion ratio would result in the legacy SPG properties being priced more reasonably (see above). This should be beneficial assuming the higher legacy MR points earning rates remain unchanged. If the SPG:MR conversion ratio is on the low end it should be easier to earn free nights at legacy SPG properties in the combined program compared to the current SPG program. Compare this to the potential outcome where a high conversion ratio causes the legacy SPG properties to become unaffordable with future earnings.

I've mentioned before that my personal over/under prediction is 2.5:1. IMO that level represents a fair assessment of the current overall purchasing power of SPG points compared to MR points. We can all cherry pick examples that skew away from that number on both the high and low end. However, at a global/corporate level the conversion ratio will likely be based more on global averages than on extremes.

Given my (admittedly many) assumptions above it might be better to hope for a moderate (or even slightly low) conversion ratio rather than something high. Future devaluations can always happen, but those will tend to bite everyone equally under a combined program.

svo242

It will be interesting to see also if they merge the Ritz Carlton rewards program, as currently those benefits differ as well as the points required to redeem there (with the tier system). I would hate to see luxury properties that are integrated into SPG, like St. Regis properties, be placed in a separate tier system.

khabah

I remember reading somewhere that the ultimate plan is to fold Starwood Preferred Guest, Marriott Rewards and the Ritz-Carlton Rewards into one streamlined program. My guess is this would be in 2018 when SPG and MR are brought together; name's still out on the joint program but "Marriott Preferred Guest" has been positively making the rounds.

khabah