[2015] Marriott to acquire Starwood hotels

[dioxide45]

Isn't part of the long-term agreement that they signed (anyone have a pointer to it online?) that they have to maintain the brand affiliation?

You are likely right, and that would make sense given that Starwood would want that long term revenue.

 

[thinze3]

Here's the Marriott announcement via email

As a valued member, we're excited to share the news that Marriott International will join together with Starwood Hotels & Resorts to create the world's largest hotel company. For our Marriott Rewards members, this will mean even more choices in even more places, giving you access to 1.1 million rooms across 5,500 hotels in more than 100 countries.

Marriott Rewards and Starwood Preferred Guest (SPG) are among the industry's most-awarded loyalty programs, and they should be even stronger when the companies merge. Our programs and brands complement each other well, and we intend to draw upon the best of both programs to provide more value for our guests and hotels.

This is the start of a long journey as we combine our two companies. For now, we remain separate, and there is no change to your Marriott Rewards program status, your Rewards points or your existing reservations. You will continue to earn Rewards points and elite stay/night credit for your stays, and bonus points for any promotions in which are you are participating. There is no change to how you manage your Rewards account or book reservations.

Over the coming months, as we have more to share we'll be sure to reach out to you by e-mail, at marriottrewards.com and via twitter (@MarriottRewards). In the meantime, we remain at your service wherever you need us—whether in our hotels, at marriottrewards.com, the Marriott mobile app, or via our Customer Care Centers.

All my best,


Arne Sorenson
President and Chief Executive Officer
Marriott International, Inc.

 

[okwiater]

Please remember that they signed multi million dollar, multi year contracts to continue the licensing use of Westin, Sheraton...etc.

In these deals, which all cost us money, they are done to ensure the continued value play. Will the points be worth as much, one can argue we have to wait and see - but to even insinuate they will be dropped is insane.

Their entire value proposition of their network GOES OUT THE WINDOW - and thus WHY they signed these deals that go into play in selling their developer assets.

I agree we have no idea where loyalty and such is going...but Marriott is picking up a multi-million dollar check each year, and I understand for something like 75 years (that was the contract).

I am waiting for the rolling heads (smilies) -- but Marriott said they realize they are so far behind in Technology and Marketing. SPG was a killer in that area. They are acquiring this. They also stated that SPG had a far superior loyalty program. Yes there is something like 2-1 Marriott to SPG members, but there are going to be MANY duplicates.

My big issues is the new flood of redeemers at quality properties that SPG has, the increased redemption levels, and possible suite upgrades going away.

But hardly one person has talked about how Marriott admitted WHY they bought SPG -- Platform, Global Presence, Website/Tech/Ap

Finally - can we please stop comparing a Hotel Merger with an AIRLINE MERGER. Hotels are NOT Monopoly's and they have a HUGE incentive to reward their customers. Airlines OWN GATES and OWN YOU as a customer based on where you HUB FROM -- Hotels must win your business WHERE YOU GO. I do like some more "value" options when traveling to cities that don't have SPG. But when traveling you still have MILLIONS of hotel rooms to choose from when you end in a city -- NOT THE CASE WITH AIRLINES.....The Gov't has gone back to the GOOD OLD DAYS of Monopolies and we are all cattle. They care VERY little about leisure traveler and all about business. Just look at how the Medallian Rewards have gone - to $$ spent.

Hotels really have an interest in keeping their customers at EVERY City they arrive in and must be competitive.

Again just my opinion

^^ This

Hotels are not airlines and have to compete not only with other chains but also with individuals through platforms like Airbnb. The considerations for a functional hotel loyalty program are vastly different from those of an airline loyalty program. Is it possible that SPG conversions will be massively devalued? Yes, of course. But if Marriott is serious about remaining competitive in this rapidly changing space, they would be smart to use this opportunity to comprehensively restructure their rewards program to stave off defections. They didn't pay $12 billion to acquire a bunch of customers in order to immediately piss them off and drive them to another lodging provider.

How will this affect Starwood timeshare owners who want to convert to Starpoints? It's way too early to say, other than that "conversion to Starpoints" is a huge component of an effective sales presentation, and ILG is in the business of selling timeshares at developer prices. I have no doubt that ILG's licensing agreement contains provisions to ensure that tool stays in their toolbox.

 

[NNerland]

^^ This

Hotels are not airlines and have to compete not only with other chains but also with individuals through platforms like Airbnb. The considerations for a functional hotel loyalty program are vastly different from those of an airline loyalty program. Is it possible that SPG conversions will be massively devalued? Yes, of course. But if Marriott is serious about remaining competitive in this rapidly changing space, they would be smart to use this opportunity to comprehensively restructure their rewards program to stave off defections. They didn't pay $12 billion to acquire a bunch of customers in order to immediately piss them off and drive them to another lodging provider.

How will this affect Starwood timeshare owners who want to convert to Starpoints? It's way too early to say, other than that "conversion to Starpoints" is a huge component of an effective sales presentation, and ILG is in the business of selling timeshares at developer prices. I have no doubt that ILG's licensing agreement contains provisions to ensure that tool stays in their toolbox.

I agree - I would also be SHOCKED if their Branding (as mentioned by a few previous posts) are all the the SVO is paying for in the Long Term. Name is worth something - but the "hotel" is the ONLY THING the NETWORK is worth. Lets be honest you buy where you go, so going to other resorts doesn't happen as often as convincing one the NETWORK conversion.

I would NEVER have bought into a 19 resort network - when you can buy in to others much, much larger. I bought into the HOTEL Conversion, Home Resort, Other fallbacks and expansion for Resorts, AND Interval International.

We all PAY for these features and it is in THEIR best interest to keep them in tact -- ESPECIALLY with expansion.

 

[SMHarman]

Even if it does, I would find it unlikely that it would require that the SPG program to be continued on indefinitely. That would be a deal killer to almost any sale of Starwood Hotels when Starwood was looking to sell the hotel division. The deal likely does include provisions for ILG to buy StarPoints to give to owners for conversion of their weeks and or other outstanding offers they have to give StarPoints to owners.

I think it will be odd for ILG to long term continue to offer Marriott Reward points to Westin and Starwood timeshare owners. It is possible and perhaps likely, but it would be a strange arrangement. I think it is more likely that they will somehow re-brand the Westin and Starwood properties as Hyatt and offer some type of conversion there. Though that is purely speculation.

It will be interesting to see how it all plays out for current Starwood owners.

True. Subject to change and all that.

But I would expect that while the successor to HOT maintains a reward program VVE has access to it.

 

[SueDonJ]

I agree - I would also be SHOCKED if their Branding (as mentioned by a few previous posts) are all the the SVO is paying for in the Long Term. Name is worth something - but the "hotel" is the ONLY THING the NETWORK is worth. Lets be honest you buy where you go, so going to other resorts doesn't happen as often as convincing one the NETWORK conversion.

I would NEVER have bought into a 19 resort network - when you can buy in to others much, much larger. I bought into the HOTEL Conversion, Home Resort, Other fallbacks and expansion for Resorts, AND Interval International.

We all PAY for these features and it is in THEIR best interest to keep them in tact -- ESPECIALLY with expansion.

Prepare to be shocked. Or, in other words, hope for the best but prepare for the worst. Many of the Marriott TUGgers take full advantage of the Marriott Rewards and timeshare affiliation but I don't think any of us would say that our "best interest" is the primary driving factor for any of the Marriott companies involved. The governing docs give them leeway to change the program to the detriment of its members and they've proven time and time again that they'll do it.

MI and Marriott Rewards have a history (as most customer loyalty programs do) of devaluing the program in certain aspects while increasing it in others. Over the years they've added higher hotel tiers on a number of occasions and they routinely re-value the tier levels of specific properties based on redemption award supply and demand. They've also ceased offering the more lucrative Travel Packages while increasing the Points requirements for replacement travel packages and airline miles. All the while, the amount of MRP's that are given to the timeshare owners in exchange for their eligible* Weeks/Points has remained constant as the amount specified in the Addendum to the purchase as it was originally sold.

In your shoes I'd expect the SPG program and timeshare affiliation to continue in one form or another when everything shakes out, but I wouldn't at all expect it to remain as is.

* With Marriott Weeks, only those purchased direct from the developer, those purchased from the official Marriott Resales Operations, and those enrolled in the Destination Club are eligible for the MRP Exchange option; Weeks purchased on any external resale markets are not eligible. With Marriott Points, the MRP Exchange option appears to follow the life of the Points upon resale.

 

[okwiater]

"Buy where you want to go" holds true now more than ever. As a recent 5* Elite owner, I will be sad if some of the perks go away -- or become irrelevant due to devaluation -- but even in the worst case scenario I will be more than happy to use and rent the properties I own.

 

[Henry M.]

I very much agree!

When I bought my properties I figured that whatever happens to SVN, and the association with Starwood, they were very nice places that would likely be maintained by whoever would take them over. The important thing is that they were located where I wanted to go, and I would be happy if I couldn't trade or otherwise exchange with another location.

 

[vistana101]

Glad to see SVO sent out the email reassurance about gold and platinum status as part of being in SVN, but it will be interesting to see what happens throughout the next couple months/years. Also, are the new timeshares going to be Vistana Signature Experiences as previously announced? Or has the name changed now that Interval has come along.

 

[cubigbird]

Glad to see SVO sent out the email reassurance about gold and platinum status as part of being in SVN, but it will be interesting to see what happens throughout the next couple months/years. Also, are the new timeshares going to be Vistana Signature Experiences as previously announced? Or has the name changed now that Interval has come along.

Assuming SPG merges into MR, how would this logistically work with the timeshares? ILG will own the timeshares and Marriott would be a separate company entirely. How would Marriott allow ILG to grant gold elite status to developer purchases seeing ILG is a completely separate (and unaffilliated) company???

For those of us that do have SPG gold, I hope that they DON'T map to MR silver. That would be a MAJOR devaluation and MR Silver can be had easily with the Chase MR Visa.

 

[DavidnRobin]

Improved flexibility with an associated cost, and a decrease in relative quality for the Consumer.
Perceived improvement in bottom-line for the Corporation.

 

[SueDonJ]

Assuming SPG merges into MR, how would this logistically work with the timeshares? ILG will own the timeshares and Marriott would be a separate company entirely. How would Marriott allow ILG to grant gold elite status to developer purchases seeing ILG is a completely separate (and unaffilliated) company??? ...

The same way it works now for Marriott timeshare owners. Marriott Rewards is the customer loyalty program affiliated with the hotel company Marriott, Intl, and Marriott Vacations Worldwide is the entirely separate timeshare company following its spin-off in 2011. Still the affiliate/franchise agreements allow the timeshare owners to continue with the customer loyalty program.

Think of the difference between MVW and Vistana only in terms of the company names - both are timeshare divisions of hotel companies that were/will be spun off to entirely separate companies. MVW is allowed to use "Marriott" in its name following its separation from MI, while your new timeshare company is not being allowed to keep "Starwood" in its name after it's spun off.

Whatever form the SPG customer loyalty program takes under the Marriot, Intl umbrella (after the timeshare spin-off to Vistana, the spin-off acquisition by ILG, and the Starwood hotel company acquisition by MI,) there is precedence in the Marriott transactions process between the separate Marriott hotel and timeshare companies that can be followed in similar fashion through the Starwood transactions process.

 

[dioxide45]

Assuming SPG merges into MR, how would this logistically work with the timeshares? ILG will own the timeshares and Marriott would be a separate company entirely. How would Marriott allow ILG to grant gold elite status to developer purchases seeing ILG is a completely separate (and unaffilliated) company???

For those of us that do have SPG gold, I hope that they DON'T map to MR silver. That would be a MAJOR devaluation and MR Silver can be had easily with the Chase MR Visa.

All that is happening is that the new company will be paying a fee to buy points and even elite status from the combined rewards program.

Just like Chase and American Express buy points from Marriott Rewards and SPG respectively. Marriott Vacations Worldwide and Vistana Signature Experiences will buy points from the combined program. Those points aren't free that they give to owners who convert their weeks to points in the reward program.

Marriott Vacations Worldwide has a similar program where they give new buyers achieving a certain ownership level free gold or platinum elite status in Marriott Rewards. While Marriott Vacations Worldwide carries the Marriott name, they are still a separate company. They have to pay Marriott Rewards a fee to give those owners that gold or platinum elite status. It really won't be any different for Vistana Signature Experiences.

The brands that Vistana Signature Experiences sells will in the future become Marriott brands. The points programs will at some point likely be combined. When a Westin or Sheraton vacation club owner owner converts to points or gets elite status, Vistana Signature Experiences will just pay Marriott Rewards instead of SPG.

 

[vistana101]

Marriott Vacations Worldwide has a similar program where they give new buyers achieving a certain ownership level free gold or platinum elite status in Marriott Rewards.

How does this work for Marriott? Is there a vacation club point requirement to get Gold with MR? Or do all owners who bought developer receive an elite MR level?

 

[dioxide45]

How does this work for Marriott? Is there a vacation club point requirement to get Gold with MR? Or do all owners who bought developer receive an elite MR level?

I don't know how it works under MVCI's new ownership levels, but under under the three old MVCI levels, if you bought enough points to take you up to Premier Owner, they made you Marriott Rewards Gold Elite for three years. If you bought enough points that it took you to Premier Plus, then you got Marriott Rewards Platinum Elite status for three years. Not every owner that buys points gets elite status in Marriott Rewards.

 

[LisaRex]

"Buy where you want to go" holds true now more than ever. As a recent 5* Elite owner, I will be sad if some of the perks go away -- or become irrelevant due to devaluation -- but even in the worst case scenario I will be more than happy to use and rent the properties I own.

I don't know. I think buying where you want to go makes definite sense to people who want to return to the same place again and again and again and again. For people like me, who get bored with the same locations, a robust exchange program is essential to ownership. I sold WKORV and bought SVV in part because I couldn't stomach exchanging an OF unit. (NOW that OF owners get more SOs, it makes more sense.)

So I'm actually still holding out hope that an acquisition by II will actually work out okay, despite its clunky and buggy website. I actually had SVV on the market because I'd grown tired of the Starwood network. If a buyer comes along, I'll sell because I think that both Marriott and Starwood have ruined their timeshares. They used to be fairly straightforward and easy to understand. With all these added layers of complexity and uncertainty, they've made ownership more of a pain than a delight. That's a shame.

 

[vistana101]

After looking at some more hotels/categories, it seems that Starwood is a bit more generous in terms of categorizing their hotels. If you look at Marriott, they value some Courtyards and Fairfield Inns as category 8 and 9 hotels, which seems a bit crazy to me. You are also constrained to mostly their lower tier, budget hotels (Residence Inn, Fairfield Inn, Courtyard, Springhill Suites etc.) until category 7, when you start to see a decent (not huge) selection of higher level hotels with the Marriott brand and a few brands above that.

I looked at a lot of their Florida hotels, where you can't find a nice, truly beachfront property (similar to many of the Starwood hotels in Florida) until category 8 or 9. I also noticed that the Boston Marriott Copley Place is listed as category 8 (out of 9), while the adjacent Westin is only a category 5 (40,000 vs. 16,000 points in prime season).

On top of all this, the Ritz Carlton branded hotels are in a whole different tier system (as noted before on this thread), ranging from 30,000 to 70,000 points per night.

Seems like in general, a lot of properties require a very high point redemption.

 

[SueDonJ]

It occurred to me after just posting in the related Marriott forum thread that you Starwood TUGgers might have some answers. (DOH! Not exactly a lightbulb moment. )

With so many moving parts it's difficult to try to figure out how at the end of all the machinations the customer loyalty program - Marriott Rewards - will work, especially as to the affiliations between what will then be two timeshare companies separate from each other and separate from the hotel company which will administer the loyalty program, Marriott Int'l.

First is the re-naming of Starwood's timeshare division, SVO, to Vistana Signature Experiences. Then - or in conjunction with? - is the spin-off of VSE to a subsidiary company of Interval Leisure Group. Then is MI's acquisition of Starwood Hotels et al business. All of the press releases indicate that at this point it's only the first step that's expected to be completed 4th QTR '15, the second by 2nd QTR '16, and then the last is contingent on the second being completed. IMO it's kind of odd that no impediments to any of the processes have been theorized on TUG ...

So at this point, are you SVN/VSE owners seeing any indication that the first is complete? Other than the notices announcing the upcoming changes, have your official notices relative to your ownerships (emails, reservation and other transaction confirmations, etc) begun referencing the VSE name yet? Any changes to your online owner account portals?

 

[dsmrp]

It occurred to me after just posting in the related Marriott forum thread that you Starwood TUGgers might have some answers. (DOH! Not exactly a lightbulb moment. )

With so many moving parts it's difficult to try to figure out how at the end of all the machinations the customer loyalty program - Marriott Rewards - will work, especially as to the affiliations between what will then be two timeshare companies separate from each other and separate from the hotel company which will administer the loyalty program, Marriott Int'l.

First is the re-naming of Starwood's timeshare division, SVO, to Vistana Signature Experiences. Then - or in conjunction with? - is the spin-off of VSE to a subsidiary company of Interval Leisure Group. Then is MI's acquisition of Starwood Hotels et al business. All of the press releases indicate that at this point it's only the first step that's expected to be completed 4th QTR '15, the second by 2nd QTR '16, and then the last is contingent on the second being completed. IMO it's kind of odd that no impediments to any of the processes have been theorized on TUG ...

So at this point, are you SVN/VSE owners seeing any indication that the first is complete? Other than the notices announcing the upcoming changes, have your official notices relative to your ownerships (emails, reservation and other transaction confirmations, etc) begun referencing the VSE name yet? Any changes to your online owner account portals?

Nope I haven't seen any name changes in the emails I've been getting.
It's all still 'Starwood Vacation Network', and the email address is
starwoodvacationownership@starwoodvo.com .
If Starwood for accounting purposes moved the vacation ownership biz to VSE, it's still all opaque to me Normally I'd say 'transparent' as to users, but not in this case :rofl:

 

[sjlola]

Lots of speculation, long wait for answers

The Starwood Flyertalk Forum has a 1000+ post thread on this, but as a 5* Elite with Lifetime SPG Plat, I was curious as to what Tuggers with similar status were thinking. On reading those posts on Flyertalk, here's what SPG folks are thinking, and I tend to agree:

1. We'll be lucky if our Starpoints convert to Marriott Rewards at anything better than a 2:1 ratio

2. Lifetime status for SPG members will likely not transfer over to MR. A 1-level demotion is speculated (SPG Plats become MR Gold, etc.)

3. Start using/converting your stockpiled Starpoints now

4. Starwood Amex is likely toast as Marriott has a strong, long-term relationship with Chase Visa

5. SPG Elite members will likely lose out in this merger

6. No reason to panic yet as the merger hasn't been approved yet and it will take at least a year to work out any consolidation of benefits in the loyalty programs

Lots of poking at frequent travelers on the Flyertalk forum calling them whiners for decrying the loss of benefits and devaluation of Starpoints for hotel stays their employers paid for. I'm a bit concerned, as are some of the other posters here, about the ongoing ability to convert SO to SP. As we paid for the weeks in the timeshare, we have serious skin in the game and many SVO owners did so specifically to be able to stay at Starwood Hotels. As I'm not crazy about Marriott hotels, I suspect we will be converting to hotel points less frequently and using our 4 weeks a year at hour home resorts at WKORV/N, which is where we like to vacation anyway. We've accumulated too many Starpoints, so it's likely we'll transfer half to airline miles while we still can (and get the bonus) and make a couple of reservations for 2016 to St. Regis NYC & Kauai.

 

[YYJMSP]

6. No reason to panic yet as the merger hasn't been approved yet and it will take at least a year to work out any consolidation of benefits in the loyalty programs

This is the only point to consider right now, everything else is speculation and needless panic.

We don't know what is going to happen, and I suspect nothing will affect us in 2016 (too late to change, and don't we all have the year already booked anyways?), but there will be changes in 2017, and we'll all have to adapt...

Of course I'm hopeful those changes are neutral or positive in impact on us, as we have a lot invested in the value added features of SVN and Eliteness, beyond the properties themselves. In theory ILG could operate the equivalent of SVN including StarOptions and SPG interaction (I'm sure SVO pays for our SPG benefits and there will be continued demand for SPG members to get to our properties, so why couldn't ILG do the same as what we have now)

My other half is convinced the world has ended, to which I say "get a grip"

 

[DavidnRobin]

I agree that this is no reason to panic, BUT I would recommend against putting any more skin in the game.

 

[duke]

We've accumulated too many Starpoints, so it's likely we'll transfer half to airline miles while we still can (and get the bonus) and make a couple of reservations for 2016 to St. Regis NYC & Kauai.

What "Bonus" is currently available for converting StarPoints to Airline miles?

 

[dioxide45]

It occurred to me after just posting in the related Marriott forum thread that you Starwood TUGgers might have some answers. (DOH! Not exactly a lightbulb moment. )

With so many moving parts it's difficult to try to figure out how at the end of all the machinations the customer loyalty program - Marriott Rewards - will work, especially as to the affiliations between what will then be two timeshare companies separate from each other and separate from the hotel company which will administer the loyalty program, Marriott Int'l.

First is the re-naming of Starwood's timeshare division, SVO, to Vistana Signature Experiences. Then - or in conjunction with? - is the spin-off of VSE to a subsidiary company of Interval Leisure Group. Then is MI's acquisition of Starwood Hotels et al business. All of the press releases indicate that at this point it's only the first step that's expected to be completed 4th QTR '15, the second by 2nd QTR '16, and then the last is contingent on the second being completed. IMO it's kind of odd that no impediments to any of the processes have been theorized on TUG ...

So at this point, are you SVN/VSE owners seeing any indication that the first is complete? Other than the notices announcing the upcoming changes, have your official notices relative to your ownerships (emails, reservation and other transaction confirmations, etc) begun referencing the VSE name yet? Any changes to your online owner account portals?

I am pretty sure the spinoff of VSE isn't completed. THe spinoff of Starwoods's timeshare division was announced in February 2011. The original plan would have been to issue shares in the new VSE based on the value of the timeshare division in Starwood Hotel and Resorts. Now they will spinoff and sell the timeshare division to ILG all in one transaction. At which time ILG will issue new shares to current Starwood shareholders. Starwood Shareholders will own 55% of ILG when the deal is done.

The original spinoff may have been set to complete before the new 2Q16 date of the new expected close of the Starwood/ILG transaction. However, now given that the timeshare division has been sold, it likely delayed that completion.

So, until the deal is completed in 2Q16, I wouldn't expect owners to see anything with the new Vistana Signature Experiences name, since that company won't exist as a wholly owned subsidiary until the transaction is closed.

 

[sjlola]

Somebody please correct me if I'm wrong, but I believe the bonus to transfer Starpoints to airline miles is 25%; one of the best in the business which is why many are upset over the thought of losing the SPG Amex. Apparently, the SPG Amex is one of the most lucrative affiliations for American Express.