Members Are Getting Suspended From the SPG Program. Here's Why.

It looks like Starwood Preferred Guest has gotten tired of travelers taking advantage of delays in new hotel openings. A batch of emails went out this week to suspect members, suspending these members' SPG accounts until the member acknowledged the warning. Here's what SPG says the members are guilty of and how you can avoid similar scrutiny.

The Hack

As anyone who's dealt with building construction likely knows all too well, delays happen. And the hotel industry isn't immune to this problem. With how costly it is to run a hotel, owners and managers want to start making money on the property as soon as it opens. So, hotels will take reservations for new properties far in advance of the expected opening date to draw bookings and hopefully have a full hotel on opening day.

When construction delays occur, these hotels send out emails to those booked informing them of the delay and offering alternative dates or hotels. Sometimes these hotels will offer compensation... and sometimes travelers will demand compensation for the delay.

And, that's where the trouble comes in: travel hackers intentionally book hotel properties under construction counting on delays and the compensation they entail. If the hotel is looking like it will open on time, they simply cancel their hotel reservation. No risk and a potential for compensation.

Now, SPG is Fighting Back

It seems a batch of emails went out this week to serial offenders. TPG got its hands on a version that was sent to a couple of SPG members from "SPG® Member Account Integrity." In the emails, members have been warned about two specific actions related to delayed hotel openings:

Request compensation for delayed hotel opening

While our hotels will absolutely consider compensating any guest for genuine inconveniences or issues they determine they are responsible for, a pattern is developing which increases our concern as to the authenticity of some of these reservations.

Please understand we have placed your account on an alert list and are monitoring all pre-opening reservations at SPG® participating hotels.

This part seems pretty straightforward. SPG is sick of members making speculative bookings at new hotels and either requesting compensation for a delay or canceling the reservation. And now, SPG is warning members that they are watching these "pre-opening reservations" for this type of compensation gaming.

The next part isn't as straightforward and has been causing some head scratching from members that have gotten the email:

Confirm reservations for grand opening dates at SPG® participating hotels with an invalid guarantee method

While we greatly appreciate genuine interest in experiencing any Marriott property, there have been reports of invalid guarantee methods being used for rooms reserved at hotels that have announced their grand opening date. This is of great concern to us and the hotels as some of these reservations are either canceled late or not at all leaving the hotels with no recourse for recovering the lost revenue as the reserved rooms sit empty on opening day. This message serves as a reminder that any reservation confirmed with a credit card that will not authorize the forfeiture amount is subject to cancelation at any time and without notice. Hotels have been advised to preauthorize the late cancel penalty amount as soon as the reservations show active in their systems and to cancel any booking where the credit card declines.

It seems that a number of members have been booking hotel grand openings using an invalid payment type (wrong credit card number, expiration date, security code) to avoid incurring cancellation fees in the case the hotel does open on time. This warning seems to have been included in all warning emails — whether or not the member was actively engaged in this practice.

But, this message also serves as a heads-up to everyone who's booking a hotel pre-opening. It looks like SPG hotels will now be pre-authorizing the amount of the cancellation penalty from the time of booking potentially up until the date of the hotel opening. Especially for luxury hotels, this could be a substantial amount to be held on your credit card. So, make sure that you're using a card with a high enough credit limit to cover the hold.

Bottom Line

SPG is cracking down on members that are trying to game the system. If you aren't doing so, you shouldn't have anything to worry about — but be aware that SPG is watching these hotel openings closely. You might get caught up in this crackdown if you book a new hotel and either request compensation for a construction delay or cancel the stay shortly before the hotel opens. As long as you aren't trying to game the system, SPG should be understanding. But, just prepare for the possibility of additional scrutiny.

H/T: One Mile At A Time

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