Competitors Close in as Marriott and Starwood Loyalty Programs Come Together

Marriott and Starwood are in the process of mapping out their joint future together, and as the suspense grows over the final products, elite travelers are getting nervous — despite Marriott CEO’s reassurances.

Taking full advantage, most competitors initially launched aggressive status matching campaigns aimed at matching benefits and pulling away high value customers. Now, they’re scaling up their efforts.

The focus of the latest campaign revolves around the value of Marriott and Starwood’s loyalty programs. Each year, most major hotel operators audit the categories of each property within their network, evaluating how expensive each should be when redeeming a free award night. As some properties grow old or go out of favor, management lowers their category to make award nights less expensive. Other properties gaining momentum or perhaps recently remodeled tend to go up in award category.

Both Starwood and Marriott updated their award categories last week, adjusting about 20% of the properties in each stable. Of those changed, 70% of Marriott properties and 60% of Starwood properties are getting more expensive. The rest are going down.

Out in the community, most reported on the changes in stride. The Points Guy highlighted changes to both Marriott and Starwood categories, saying the updates “don’t appear to be too drastic.” Many news outlets didn’t cover the changes.

Competitors, however, have been quick to pounce. Wyndham Hotel Group’s Noah Brodsky, SVP Worldwide Loyalty & Engagement, painted the changes as a significant devaluation, and suggested that the general hotel loyalty industry is slowly losing its value.

“While consolidation in the travel industry is certainly driving devaluation, it’s also apparent that hotel companies are making their programs so complicated that they feel like they can hide devaluation announcements far enough down in the fine print that travelers won’t notice or understand the details,” Mr. Brodsky said.

“A complicated multi-tiered system makes members’ head spin and frankly, feels unachievable,” he continued, advocating for the relatively simple single-tiered system that Wyndham uses.

As to whether the category changes to Marriott and Starwood reflect as stark of a dystopian industry as Wyndham suggests, the reality is a bit more complicated. Much goes into the value of a hotel loyalty program, including the rate at which members earn points, the number of hotels in the network and the strength of any partner programs — so changing the value of a handful of properties may have little overall effect on a program’s global value. For those on the fence about changing their loyalty though, Wyndham is smart to shake the tree.