This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

After much anticipation, Marriott has announced the hottest piece of travel news for 2018: their plans for the combined Marriott/SPG loyalty program. While it will take some time to sift through all the details, the first impressions are overwhelmingly positive. Here we’ll take an in-depth look at the core element of the program: the award chart for free hotel nights.

Watch David Flueck, SVP of Global Loyalty for Marriott International, answer TPG’s questions about the combined program:

The New Marriott and SPG Loyalty Program Questions Answered!

Brian Kelly and David Flueck, SVP of Global Loyalty for Marriott International, answer your questions on the new — and much-anticipated! — Marriott Rewards and Starwood Preferred Guest – SPG unified loyalty program.

Posted by The Points Guy on Tuesday, April 17, 2018

Combining three different programs — Marriott, Ritz-Carlton and SPG — into one is no easy task. For starters, each of the three current programs has a different number of categories or tiers. Also, each program has its own quirks in award pricing, such as the SPG discount on weekend award nights at category 1-2 properties (which is being eliminated). So this is a herculean task.

Before we look at the new chart, here are the current award charts for each program (cash values are based on TPG’s latest valuations):

Category/Tier Marriott Rewards Points ($) SPG Points ($) Ritz-Carlton Points ($)
1 7,500 ($67.5) 3,000 ($81) 30,000 ($270)
2 10,000 ($90) 4,000 ($108) 40,000 ($360)
3 15,000 ($135) 7,000 ($189) 50,000 ($450)
4 20,000 ($180) 10,000 ($270) 60,000 ($540)
5 25,000 ($225) 12,000-16,000
($324-$432)
70,000 ($630)
6 30,000 ($270) 20,000-25,000
($540-$675)
7 35,000 ($315) 30,000-35,000
($810-$945)
8 40,000 ($360)
9 45,000 ($405)

The new award chart, shown below, will have 8 award categories and feature off-peak, standard, and peak pricing. While Marriott works out the kinks in the system (i.e. through the end of 2018) only the “standard” pricing will be used. Additionally, category 8 pricing won’t be used for reservations booked before 2/1/2019. Given that the new program combines the best of the old SPG and Marriott programs, I’m keeping TPG’s current valuation of Marriott points at .9 cents each here, although that is subject to change in the future.

Category Off-Peak** Standard Peak**
1 5,000 ($45) 7,500 ($67.5) 10,000 ($90)
2 10,000 ($90) 12,500 ($112.5) 15,000 ($135)
3 15,000 ($135) 17,500 ($157.5) 20,000 ($180)
4 20,000 ($180) 25,000 ($225) 30,000 ($270)
5 30,000 ($270) 35,000 ($315) 40,000 ($360)
6 40,000 ($360) 50,000 ($450) 60,000 ($540)
7 50,000 ($450) 60,000 ($540) 70,000 ($630)
8* 70,000 ($630) 85,000 ($765) 100,000 ($900)
* Category 8 will not be in use until February 1, 2019.
** Peak and off-peak bands will not be in use until 2019.

From a cash value perspective, the “standard” pricing looks like a happy medium between the old SPG and Marriott charts. But unfortunately there are a number of questions we don’t have answered at this point, such as how much off-peak and standard space will actually be available. Another question we still don’t have the answer to is which hotels will fall into which category, which Marriott tells us it won’t have available until June. This has to be one of the most time consuming parts of the merger, as Marriott must individually decide how to categorize the 6,500 properties in their portfolio.

That being said, we can make some educated guesses to compare the value of the new and old programs. To keep this analysis simple, I made a few assumptions. For SPG properties, I converted their points cost (1:3) to the equivalent number of Marriott points needed. I also only focused on standard award pricing (except where noted), and I considered likely category 8 properties even though that price level won’t be implemented until early 2019.

Fairfield by Marriott, Amritsar India

Photo courtesy of booking.com

Old points cost: 7,500
Likely new points cost: 7,500
Average cash rate:  $49

One thing we can be mostly certain about is that lower tier properties are likely to stay lower tier. A great example of this is the Fairfield by Marriott Amristar in the northern Indian province of Punjab. This hotel is currently a Marriott category 1, and given that cash rates never exceed $100, I see no reason for it to change.

Amritsar is one of the most beautiful and under appreciated cities in India. It’s home to the Sikh Gurdwara (golden temple, shown below), one of the holiest sites in the Sikh religion. Amritsar is also the perfect place to stay if you plan on attending the Wagah border crossing ceremony. But no matter what category the Fairfield ends up in, you’re likely better off paying cash. With rates hovering around ~$50, there’s no reason to spend 7,500 points which are worth $67.50

JW Marriott Shanghai Tomorrow Square

Photo courtesy of JW Marriott Shanghai
Photo courtesy of JW Marriott Shanghai

Old points cost: 25,000
Likely new points cost: 35,000
Average cash rate:  $210

One element of the new program that’s relatively unchanged is the free night certificates that come with the Marriott Rewards Premier Credit Card and the Marriott Rewards Business Premier Credit Card. As of August, both the Starwood Preferred Guest® Credit Card from American Express and the Starwood Preferred Guest® Business Credit Card from American Express will also earn a restricted annual free night. Under the old program, these were limited to category 1-5 properties — the new program uses a point limit similar to IHG and caps the free night at hotels that cost 35,000 points or less. This still caps their use at categories 1-5, but appears to eliminate peak pricing at category 5 hotels which cost 40,000 points per night.

The JW Marriott Shanghai at Tomorrow Square was downgraded earlier this year from a category 6 to a category 5, making it eligible for use with free night certificates. I find it unlikely that Marriott will reverse course only 5 months later and decide to exclude it again, so I’m comfortable guessing that this hotel will stay as a category 5.

I had the chance to stay at this hotel a few weeks ago and was thoroughly impressed by the design of the room, sweeping views of the Bund, and the thoughtful and proactive service I received. Now that category 5 hotels cost an extra 10,000 points ($90) a night to redeem, this becomes an even better use of free night certificates.

W Chicago Lakeshore

 

Photo courtesy of W Chicago Lakeshore
Photo courtesy of W Chicago Lakeshore

Old points cost: 36,000
Likely new points cost: 35,000-50,000
Average cash rate:  $200

I’m guessing that Marriott properties are more likely to stay in their current categories. Marriott has been managing them for years and knows how much they want to sell them for. On the flip side, I expect to see more category changes from legacy SPG properties as Marriott tries to integrate them into the new combined portfolio.

The W Chicago Lakeshore is a perfect example of this (Chicago is actually home to two SPG Category 5 Ws, but only of them is worth checking out). The W Chicago Lakeshore currently costs 36,000 Marriott points a night, and so it seems to align perfectly as a category 5 in the new system.

That being said, Marriott has repeatedly bumped luxury hotels up to a category 6 to make them ineligible for free night certificates. Chicago is an expensive market, and the W Lakeshore is well positioned right next to the Magnificent Mile with sweeping views of Navy Pier. It’s entirely possible we’ll see it end up as a category 6, sadly raising the cost to 50,000 points ($450) a night.

The Ritz-Carlton, Okinawa

The Ritz-Carlton, Okinawa
Photo courtesy of The Ritz-Carlton Okinawa

Old points cost: 60,000
Likely new points cost: 60,000-85,000
Average cash rate:  $350

When you look at the new award chart, you’ll see that most of the prices increase in logical steps of 5,000-10,000. That is, until you get to category 8. One important question that remains unanswered is how liberally Marriott will use this top category. Will they reserve it for truly top-tier properties, or will we see them fold many higher end hotels into this expensive group?

One hotel I’m keeping an eye on is The Ritz-Carlton, Okinawa. This is currently a tier 4 Ritz-Carlton, requiring 60,000 points per night. I can’t imagine it going down in price, which means it will be either a category 7 or 8 hotel in the new award chart. At category 7 it would cost the exact same amount it does now, even less during off-peak times. At category 8, it would cost an extra 25,000 points ($225) a night. I’d be very disappointed to see this and other tier 4 Ritz-Carltons like The Ritz-Carlton, Georgetown end up costing more.

St. Regis Maldives

Photo courtesy of St. Regis Maldives

Old points cost: 270,000
Likely new points cost: 100,000
Average cash rate: $1,500+

The jaw-dropping bucket list overwater villas at the St. Regis Maldives bring up an important question Marriott has yet to answer: Will the uber-luxury properties in their portfolio — such as the St. Regis Maldives, the St. Regis Bora Bora and so on — be subject to the new award chart? While Marriott’s nicest properties (Tier 5 Ritz-Carltons, such as the Ritz-Carlton, Grand Cayman) have a clearly defined award price, the equivalently luxurious SPG properties can be as much as 3x more expensive than the top published award category.

It’s likely Marriott will retain this model and exclude certain properties from the new award pricing, though for the sake of simplicity I hope that they’ll just designate these hotels as category 8. My guess is there will be little to no standard or off-peak pricing, and you should expect to pay the peak rate of 100,000 Marriott points per night to stay at the St. Regis Maldives. Even though TPG values 100,000 Marriott points at $900, this is a huge discount over the current SPG rate which TPG values at ~$2,430. This also represents a 40% discount over the cash rates, which are usually $1,500 and up.

Bottom Line

Many people, myself included, were worried that Marriott was simply going to gut the SPG program. While there are still some questions we don’t know the answer to, it looks like Marriott mainly combined the two programs.

Yes, this new award chart represents a slight devaluation at almost every level. But depending on how Marriott categorizes their hotels — especially the new SPG acquisitions — and how much off-peak and standard space they choose to make available, it might not sting so much. I for one am cautiously optimistic that this program will remain incredibly valuable moving forward.

Featured photo courtesy of Ritz Carlton Okinawa.

This story has been updated to clarify that the new program will launch in August, but a specific start date in August has not yet been confirmed.

The Points Guy has comprehensive coverage of the new Marriott loyalty program — read all our stories at “The New Marriott.”

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.