Was the 1:3 SPG:Marriott conversion rate too generous?

Reply

Old Apr 5, 18, 8:35 am
  #16  
 
Join Date: Mar 2005
Location: MSY
Programs: AA Plat Pro, UA Silver, SPG/Marriott Plat, Hyatt Explorist
Posts: 2,416
1:3 is about right in terms of $/pt value. But SPG had pretty generous earning potential, bonuses and elite benefits due to the lower number of hotels in the program. So you had a lot of elites with stockpiled points, worried about devaluation when the programs merged, who also discovered the bargains in the marriott chart. Marriott is seeing a spike redemption CPM and adjusting hotels to match. I imagine once stockpiled points have been burned out of the system things will stabilize a little.

I've been burned by program devaluations in the past, so I'm spending my stockpiled points. I've used about 100k spg points in the past year and plan on burning another 150k this coming year.
oopsz is offline  
Reply With Quote
Old Apr 5, 18, 11:32 am
  #17  
2019 FlyerTalk Awards
 
Join Date: Jan 2009
Location: Everywhere
Programs: AA EXP - 3.3MM, Bonvoy LIFETIME Titanium Elite, HH Diamd, Priority Clb PLT, Ntnl Exec, Sixt PLT
Posts: 1,210
Originally Posted by CPRich View Post
1:3 was perfectly fine. Look at TPG Valuations, various "what are * points worth" on these forums over the last several years, etc - all are right in that ballpark.
SPG has under-earned relative to redemption, and made it up in MAGC, PLT amenity, etc., for many years. Look at any "how many nights to earn a free night' analyses, then see how that changes when these other points are factored in. They just approached it differently. MR had better base earning, SPG made it up with bonuses, elite membership specials, etc.
I fail to see how a 250/nt SPG promo is terrible and 750/nt MR is OK when the 1:3 ratio is a fact.
- You are right on! SPG earning base rate was lower vs. Marriott and Hilton and they were creating excitement among members by running promos and rewarding the best customers well. What Marriott is doing is inflating the redemption rates that will be bringing the earning rates on par with SPG. So what we will end up with will be a combined program with a low earn rate similar to SPG (in terms of free nights per $ spending) and Marriott-style promos (pathetic based on the previous SPG record).
Alex_I is offline  
Reply With Quote
Old Apr 5, 18, 12:43 pm
  #18  
 
Join Date: Jun 2007
Location: RIC
Programs: UA 1K MM, AA Gold MM, Marriott LTT, Hyatt Globalist, HH Silver
Posts: 2,665
I have not converted one way or another. Not interested at this time, so conversion rate is irrelevant. I still use my SPG points for SPG aawrd stays, as high as 35K per night at St. Regis Princeville. If there are really nice MR properties where I travel, then I may consider MR Travel Packages.
CIT85 is offline  
Reply With Quote
Old Apr 6, 18, 8:51 am
  #19  
 
Join Date: Feb 2013
Location: Miami, FL
Programs: UA 1MM, Marriott LT PPE, Hilton ♢, Hyatt Disc, IHG Plat, Radisson Gold, Hertz PC
Posts: 4,355
Originally Posted by oopsz View Post
I've been burned by program devaluations in the past, so I'm spending my stockpiled points. I've used about 100k spg points in the past year and plan on burning another 150k this coming year.
+1! Everyone should be doing this... I do not trust Marriott when this merger is complete and I will make sure I'm not sitting on more than 60k in points (1 5 night stay). Hopefully less, but surely no more.
remymartin likes this.
TravelinSperry is offline  
Reply With Quote
Old Apr 6, 18, 3:58 pm
  #20  
 
Join Date: Jul 2017
Programs: IHG spire ambassador, SPG/Marriott Gold(new plat), Virgin Atlantic
Posts: 93
Originally Posted by TravelinSperry View Post
Spend your points in 2018 before the merger is complete and the top tier hotels go up!
Agreed, better safe than sorry!

Can always book stays forward well into 2019 for travel which may or may not actually materialize ( i.e. vacation stays I want - hope to take but have not yet booked rest logistics , flights whatever ) and worst case just cancel & refund the points.


BTW IMHO yes got a little lucky with some arbitrage, but they were pretty close

e.g. I've just made an airport booking PHX at spg
cat 2 which is weekend 3,000 weekday 4,000

so comparing that to Marriott is 10k cat 2. So some days weekdays we win with transferring to 12,000 Marriott, while other days weekends we loose transferring to 9,000 Marriott. Overall still pretty close.

EDIT: I thought about this and one concern is while the "categories" are inline numerically not so much on what get! In this example spg gets me a decent full service Sheraton but after looking around the equivalent cat 2 / 10k Marriott gets nothing in Phoenix and cat 3 is just residence inn... I'd definitely say getting the Sheraton is superior. Hmmmm

Last edited by somedudefromFLa; Apr 7, 18 at 3:04 pm
somedudefromFLa is offline  
Reply With Quote
Old Apr 7, 18, 3:51 pm
  #21  
 
Join Date: Mar 2005
Location: MSY
Programs: AA Plat Pro, UA Silver, SPG/Marriott Plat, Hyatt Explorist
Posts: 2,416
Originally Posted by somedudefromFLa View Post
EDIT: I thought about this and one concern is while the "categories" are inline numerically not so much on what get! In this example spg gets me a decent full service Sheraton but after looking around the equivalent cat 2 / 10k Marriott gets nothing in Phoenix and cat 3 is just residence inn... I'd definitely say getting the Sheraton is superior. Hmmmm
Depends what you want. If I'm traveling with the kids, I'll take a residence/towneplace or element because I'm guaranteed a suite, a kitchenette with full size fridge, and free hot breakfast (compare the "continental breakfast" amenity I get at full service SPG hotel as a platinum, which can be extremely hit or miss).
oopsz is offline  
Reply With Quote
Old Apr 8, 18, 5:57 am
  #22  
 
Join Date: Dec 2004
Posts: 6,777
As a general rule, for any headline that asks a question the answer is No.

Last edited by rrgg; Apr 9, 18 at 11:06 am
rrgg is offline  
Reply With Quote
Old Apr 8, 18, 10:59 am
  #23  
 
Join Date: Sep 2002
Location: Thousand Oaks, Ca., USA
Programs: AA Ex Plat; Bonvoy Titanium Lifetime Elite;Hyatt Globalist; HHonors Diamond; United Silver
Posts: 5,629
It depends on your stay patterns. 1:3 is too high for Cat 6 hotels, 25k spg puts them all cat 6 starwood hotels 5k points above the top tier RItz Carlton. As someone with a lot of history in both programs, I have a ton of MR points, and few SPG points, because invariabley, SPG is where I want to stay. So I'm hoarding my MR points to stay again at the Gritti Palace, which is 105k MR points per night in high season. THat's 1.5 nights at any Ritz Carlton per Gritti night.

But I'm just glad I still have the option.
beachfan is offline  
Reply With Quote
Old Apr 8, 18, 2:42 pm
  #24  
Moderator: Mileage Run, InterContinental Hotels & Radisson Hotel Group
Original Poster
 
Join Date: May 2004
Posts: 5,318
Originally Posted by beachfan View Post
It depends on your stay patterns. 1:3 is too high for Cat 6 hotels, 25k spg puts them all cat 6 starwood hotels 5k points above the top tier RItz Carlton. As someone with a lot of history in both programs, I have a ton of MR points, and few SPG points, because invariabley, SPG is where I want to stay. So I'm hoarding my MR points to stay again at the Gritti Palace, which is 105k MR points per night in high season. THat's 1.5 nights at any Ritz Carlton per Gritti night.
I guess what I should have said in the thread title: was it a mistake for Marriott to start out with this generous exchange rate? Regardless of what people say now, the 1:3 exchange rate wasn't expected at the time (read the threads), and was generally received as a positive surprise. On Marriott's end it was clearly a political decision -- they opted to show goodwill to SPG members.

The problem is that this decision may now backfire:

- Redemption costs in many locations are out of whack, with many middling SPG properties costing as much as top Marriott properties, and top SPG properties costing more than any Marriott property. We can argue about differences in benefits and whatnot, but at some point, the programs will have to be merged, and it's not sustainable to have lots of locations where Marriott properties cost 1/3 less than comparable SPG ones. We already saw a round of category adjustments last month where Marriott properties went through a bloodbath. To bring the programs in line, there will either have to be further drastic increases on the Marriott side (which likely will not be received well by Marriott members), or reductions on the Starwood side (unlikely).
- Bonus points earning (Plat bonus and promotions) feels minimal compared to SPG. Is there any SPG Plat who's excited about a 166 Starpoint welcome bonus, 166 Starpoint MAGC, or the current 250 Starpoint/night promo?

The 1:3 conversion calmed initial fears of Starwood members, and helped avoid the exodus we would have seen if a 1:2 conversion rate had been implemented. But in the long run, Marriott may have shot itself in the foot. Both Marriott members and SPG members are bound to be disappointed going forward -- and these problems could have been avoided almost completely with a 1:2 conversion rate.
jpdx is offline  
Reply With Quote
Old Apr 8, 18, 3:15 pm
  #25  
Marriott Contributor Badge 2019 FlyerTalk Awards
 
Join Date: Jan 2009
Location: BTR
Programs: AA PlatPro 2.3MM; Marriott LT Plat; Hilton Gold; Vistana 5-Star Elite; National Car Exec Elite
Posts: 6,047
Originally Posted by jpdx View Post
. . .
The 1:3 conversion calmed initial fears of Starwood members, and helped avoid the exodus we would have seen if a 1:2 conversion rate had been implemented. But in the long run, Marriott may have shot itself in the foot. Both Marriott members and SPG members are bound to be disappointed going forward -- and these problems could have been avoided almost completely with a 1:2 conversion rate.
If, as you state, Marriott had implemented a 1:2 conversion rate and we would have had an "exodus" of Starwood members, then Marriott certainly would not have received the value in the merger for which they paid. Marriott did not just pay for the physical properties. They also paid for the members, and their loyalty, in the SPG program.
controller1 is offline  
Reply With Quote
Old Apr 8, 18, 5:35 pm
  #26  
FlyerTalk Evangelist
 
Join Date: Apr 2008
Location: LGA/JFK/EWR
Programs: UA 1KMM, Hyatt Discoverist, abandoned Marriott LTT (RIP SPG), Hertz PC
Posts: 19,189
Originally Posted by controller1 View Post
If, as you state, Marriott had implemented a 1:2 conversion rate and we would have had an "exodus" of Starwood members, then Marriott certainly would not have received the value in the merger for which they paid. Marriott did not just pay for the physical properties. They also paid for the members, and their loyalty, in the SPG program.
There also would have likely been a massive outflow of MR points over to SPG if this were the case, as well as heavy SPG redemptions by loyals...plus the bad long-term ramification as you noted.
controller1 likes this.
UA-NYC is online now  
Reply With Quote
Old Apr 8, 18, 6:40 pm
  #27  
 
Join Date: Jun 2015
Location: SFO/SJC, BWI
Programs: :rolleyes:, DL DM, Mlife Plat, TR 7*, SPG/MR Plat, UA 1K
Posts: 9,274
Originally Posted by rrgg View Post
As a general rule, for any headline that asks a question the answer is No.
That has a name: Betteridge's law of headlines
oopsz likes this.
Zorak is online now  
Reply With Quote
Old Apr 9, 18, 12:36 am
  #28  
 
Join Date: Feb 2016
Location: SIN;CGK
Programs: HH Dia;SPG Plat;Marriott Plat;GHA Black
Posts: 267
just converted 10k SPG to 30k Marriott for a night stay at Ritz Carlton CGK.
Was a steal considering the normal rate is close to $300 and The Westin few km away is 12k SPG for $100.

For now I'm happy earning with SPG and burning with Marriott
sandyph is offline  
Reply With Quote
Old Apr 9, 18, 5:27 am
  #29  
2019 FlyerTalk Awards
 
Join Date: Feb 2018
Programs: Ritz Carlton Rewards : PLTP , LCAH : G, Skywards : S
Posts: 1,028
Consolation prize for SPG members before Marriott kills SPG program
kaizen7 is offline  
Reply With Quote
Old Apr 9, 18, 7:24 am
  #30  
 
Join Date: Aug 2010
Programs: Marriott Bonvoy Ambassador, Melia Platinum, SIXT Platinum, Accor Silver, Lufthansa FTL
Posts: 343
Originally Posted by controller1 View Post
If, as you state, Marriott had implemented a 1:2 conversion rate and we would have had an "exodus" of Starwood members, then Marriott certainly would not have received the value in the merger for which they paid. Marriott did not just pay for the physical properties. They also paid for the members, and their loyalty, in the SPG program.
I would even argue, that the members and the loyalty program are even more valuable than the physical properties, the management contracts or the hotel-rental contracts.
SunshineStay is offline  
Reply With Quote

Thread Tools
Search this Thread