For the past year, Starwood (喜达屋) has been the subject of acquisition rumors involving a number of hotel groups. Reported suitors have included Hyatt（凯悦）、IHG（洲际酒店）、Jinjiang Group、HNA Group, and CITIC Group (中投集团). Starwood’s CEO had even said it was expected the company would be acquired by the end of this year. Yet this morning, Marriott announced that it will acquire Starwood for $12.2 billion in cash and stock. The transaction has already been approved by the boards of both companies. The deal is expected to close around mid-2016. Because combining hotel loyalty programs is fairly complicated, if Marriott Rewards is merged with SPG it may take quite a long time to complete. So there is no need to panic that your Starpoints will devalue overnight due to the merger. Still, let’s try to predict what might happen to both programs.
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Potential changes to Marriott Rewards and Starwood Preferred Guests
Possible scenarios include:
Both programs continue to run in parallel
Because the points values differ significantly between the two loyalty programs, the most likely result is that SPG and Marriott Rewards continue to operate independently, while each adds the other chain’s properties to its own earning/redemption structure. Even now, The Ritz-Carlton loyalty program remains independent from Marriott Rewards, and points between the two programs can be converted relatively easily, so it is not impossible that Marriott will continue to operate more than one loyalty program.
Both programs merge
Ultimately, merging would benefit the already-combined two hotel groups by saving costs. The downside is that Marriott Rewards has far more members than SPG, so the program most likely to survive would be Marriott Rewards rather than SPG. Chances are no one wants their valuable SPG Starpoints converted to Marriott Rewards Points at a 1:1 ratio. We expect that if these two programs are to merge, there will be a sufficiently long advance notice period. At that point, members can decide whether to transfer points into other airline programs to protect against dilution, depending on the structure of the merger.
“We will take the best of both programs and make sure the bests are preserved, full details will be revealed at a later date.”
Marriott says it understands SPG’s value and will preserve the best of both programs. So in the long run, what may happen is that Marriott Rewards and SPG operate independently for the next few years, then merge loyalty programs. Bottom line: no need for immediate concern from anyone holding Starpoints right now. More details should come next year. What do you think? Come share your view.