Marriott-Starwood merger approved, and the official views on the future of MR and SPG programs

After a wait of nearly 6 months (which was expected) and some last-minute price wars, Marriott finally acquired Starwood yesterday, after shareholders voted for the merger. According to the press release, ...holders of over 97 percent of Marriott shares (representing over 79 percent of outstanding shares), and holders of over 95 percent of Starwood shares (representing over 63 percent of outstanding shares) voted in favor of a proposal to approve the transaction.

There were also mails yesterday, from the CEOs of both Marriott and Starwood, to Marriott Rewards and SPG members. Here's what they said.


Here's what Starwood had to say

Nearly five months ago we shared the news that Starwood Hotels & Resorts is joining with Marriott International to create the world’s biggest and best hotel company — with 5,500 hotels and resorts in more than 100 countries. Today we’re pleased to announce that the shareholders of each company have approved the merger.
Since the original announcement, our members have asked many questions about the future of Starwood Preferred Guest® (SPG®). Soon we will begin the long journey to integrate the very best of SPG and Marriott Rewards®. Through this process, your perspective will help guide these discussions as we consider the following:
• How do we continue to deliver the unique experiences, benefits and rewards you’ve come to expect both in and out of our hotels and resorts?
• How do we take full advantage of the extraordinary new range of hotels, resorts and destinations that will be the hallmark of a combined Starwood and Marriott to add new recognition and benefits for you?
• How do we protect the value of your currency and status, whether your Starpoints® balance, lifetime status or membership level?
Getting answers to these complicated, important questions will take time. In fact, we don’t anticipate launching a newly combined program until 2018. This means SPG will continue to run separately until then. In the meantime, we’re actively exploring ways to build bridges between the two programs to further enhance your experience.
In addition, we are not standing still: Among other things, we’re bringing you new access to one-of-a-kind hotels from Tribute Portfolio™ and Design Hotels™, plus exciting new SPG Moments experiences through our unique partnerships with Major League Baseball®, Mercedes AMG Petronas and more.
Know that we’re listening to your feedback, and we value your input. Our merger is on track to close midyear, and as we have more news to share, we will reach out to you. You can also find the latest updates at spg.com/updates and via Twitter (@spg). Our members are at the core of everything we do, and that will not change. We remain at your service wherever you need us — in our hotels, at spg.com, on the SPG apps or via our Customer Contact Centers.
Thank you for sharing your travels with SPG.

Assuming we are able to take the entire statement at face value, here's what I read:
  • The MR and SPG programs will run as separate programs and won't really combine until 2018.
  • It talks of a newly combined program, and that's quite interesting! I'm not sure if this is just a euphemism for rolling up SPG into MR, or if there will actually be a new program. 
  • It talks of integrating the best of each program into the new program. Following on from the previous point, a hybrid program perhaps?
  • It talks of new recognition and benefits - possibly different levels within the new program, that can be matched to the existing SPG and MR programs without a significant loss in value for the members? [Though I agree it will be hard to keep everyone happy.]

And here's what Marriott had to say

We're excited to announce that we've secured shareholder approval for Marriott International to join together with Starwood Hotels & Resorts—a significant milestone towards creating the world's largest lodging company and strongest loyalty program in the industry. Since we announced our plans to merge with Starwood, you've raised questions about the impact of the merger on your membership and the Marriott Rewards® program. I want to take this opportunity to provide an update on where we stand.
Serving our valued guests has always been our priority at Marriott, and your feedback is important to us as we collaborate with Starwood on the vision for our loyalty programs.
After we become one company, we expect to run parallel loyalty programs while we engage in the complicated work of integration. During this period, there is no change to how you manage your Marriott Rewards account or book reservations, and you will maintain your existing member benefits for some time.
The good news is that we have many possibilities ahead of us because Marriott and Starwood both have great loyalty programs. We intend to draw upon the very best of both Marriott Rewards and Starwood Preferred Guest® (SPG®) to provide even more value to our members.
Here are just a few of the future opportunities we're excited about:
• Giving our members access to our collective portfolio of 5,500 hotels and resorts in more than 100 countries.
• Offering even more unique benefits to help members pursue their passions and greater opportunities for exclusive, once-in-a-lifetime experiences.
• Personalized and relevant service before, during and after the hotel stay.
In the meantime, we're actively exploring ways to build bridges between the two programs to further enhance your experience.
Marriott remains committed to evolving our Marriott Rewards member benefits. Our recent announcement of Marriott Rewards Member Rates is the latest way we're showing our loyalty to our members. These new rates are exclusively designed to reward members with the lowest rates available across our portfolio when booking directly on Marriott.com, our easy-to-use app, our call centers or through select corporate travel professionals.
We are grateful for your loyalty, and we are listening to you and taking your input into consideration. Our merger is on track to close midyear, and as we have more news to share, we'll reach out to you. In the meantime, we will continue to provide you with the exceptional service and travel experience you have come to expect from us at Marriott.
You can find the latest updates on Marriott.com and via Twitter (@marriottrewards), and as always, reach out to us through our hotels, at our website, in our Marriott Rewards Insiders community, on the Marriott app or via our call centers.
Thank you for your continued loyalty, and happy traveling!

Considering their press release about the merger was issued jointly, I would have thought that the communication to loyalty program members would also be done in a similar way. However, that's not the case, and I find that already creating a trust deficit at least as far as I'm concerned, in my capacity as a member of both programs. 

Here's what I make of Marriott's announcement:
  • Overall, this announcement says rather less than SPG's, 
  • Same as SPG, they've indicated running separate, parallel programs for some time, and also that the new program will combine some of the best elements of both programs.
  • I'm not very positive about "...you will maintain your existing member benefits for some time..." I do hope I'm not reading too much into this, but is there a potential loss in value for MR members?

Here's what I'd like to see

Internationally, SPG members feel they'll be getting the short end of the stick because of how superior the SPG program is compared to Marriott Rewards. However, from the exclusive perspective of value for your points in India, Marriott scores better. So are my thoughts on what the combined program could offer:
  • retain largely the same requirements to reach elite levels, as the current SPG program
  • complimentary breakfast for top 2 or 3 tier elite levels (Platinum and Gold - or their equivalents)
  • early check-in and/or late-check out for all members
  • a far more generous upgrade policy than either program currently has
  • retain SPG's ability to transfer points to partner programs, or better it
  • rehash the award category levels, creating parity between SPG and Marriott, and as a consequence, standardise the award points required for each level.

Of course, this is just a wish list! 

Readers: What would you like to see as some of the benefits from the new program?

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