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After months of waiting, the deal is finally done: Marriott International has officially acquired Starwood Hotels & Resorts Worldwide, creating the world’s largest hotel chain. The 30-brand Marriott family now includes more than 5,700 properties and over a million rooms around the world.
One of the biggest question marks to come out of the initial announcement late last year was the fate of the two brands’ loyalty programs. Two of the largest programs in the space, Starwood Preferred Guest and Marriott Rewards, make up about 85 million guests combined.
The $13 billion question was answered on Friday, with the announcement that SPG members would have the option to link their accounts to Marriott rewards. The conversion seems to be relatively seamless on paper, with guests retaining their membership tier across both programs and earning one Marriott Rewards point for every three they earned in SPG.
“Marriott will draw upon the very best each program offers and we can’t wait to show the loyal members of these programs the power and benefits of Marriott and Starwood coming together,” said Stephanie Linnartz, Executive Vice President and Global Chief Commercial Officer at Marriott.
The solution, while simple in execution, is only a temporary measure; Marriott said in a company statement that the two programs would operate independently until 2018 at the earliest, at which point the two will be combined into a new combined program.
“While some programs have combined in the past - post merger of two brands (US Airways and American), this is somewhat unique. Also, assuming the consolidation is executed well, this is a huge win for consumers,” Brad Marg, COO of loyalty technology provider Clutch, told Loyalty360. “With a massive breadth of properties, price levels, locations, amenities and food offerings to choose from, consumers will obtain the same level of service, value and choice while earning rewards that aren't divided by two brands. I see no reason why the market won't react positively to this announcement and the only potential pitfall is aligning the physical accounts - points, access, emails, preferences, history etc. If they make that easy, loyalists for SPG and Marriott are going to be thrilled.”
Also optimistic about the move is Gregg O’Neill, Business Development Director of Hinda Incentives, a provider of reward program resources for over 40 years.
“The merger of these two programs is monumental because of the names and brand recognition especially here in the US,” says O’Neill. “But like any large merger, there will be the usual growing pains. I liken this to the Merger of American Airlines and US Air 2 years ago, where two iconic companies with join forces and have many consumer overlaps. I have a personal stake, since I am an elite member in both programs, and recently was an SPG Platinum member. I have since linked my accounts and I am looking forward to seeing where the program takes me. I believe their biggest challenge will managing the 30 different brands under one program: How will the consumer know which is a Marriott hotel?”
CrowdTwist CMO Geoff Smith notes that the pace of mergers often plays a crucial role in its reception and effectiveness, also citing the 2014 merger of American Airlines and US Airways.
"When two companies the size of Marriott and Starwood size merge and each one has a venerable rewards program, you can either rip the Band-Aid off quickly, or take it slowly. It is not surprising that Marriott and Starwood have decided to pace themselves in giving their members time and incentives to try out each other's loyalty program before merging the two sometime in 2018. Merging both initiatives is a monumental task, but so is ironing out the relative differences between the two programs. Like American Airlines and US Airlines, it’s best for Marriott and Starwood to take it slow and determine the right strategy that will satisfy the business needs, as well as those of their loyal guests."
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