Strategy For Starwood Points Since The Marriott Announcement

Strategy For Starwood Points Since The Marriott Announcement

We’ve had a lot of news this week about upcoming changes to the Marriott Rewards program, with both Marriott and Starwood becoming one program as of August 1, 2018. We also saw a change to the Starwood Preferred Guest Credit Card in Canada, where the welcome bonus (and referral program) where greatly devalued from offering generous SPG point bonuses to paltry statement credits. As such, I’ve received quite a few questions regarding the changes, and thought I would share my new strategy for Starwood points since the Marriott announcement.

A Rundown Of The Recent Changes

This has been a busy news week, though unfortunately we still don’t know every detail of the new program, such as how existing properties will be categorized for free-night redemptions. That said, I think I have enough information to formulate a basic strategy, based on the following key points:

• The Starwood Preferred Guest Credit Cards in Canada no longer offer SPG points as bonuses for new cardmembers or referrals
• We can expect a new/reimagined Starwood/Marriott credit card in Canada, though the details (including which bank will issue the card) are yet to be announced
• Redemption rates at hotels are changing in the new program, with maximum award costs capped at 60,000 Marriott Rewards Points (20,000 SPG points) per night
• We don’t know how each hotel will be categorized, though we know based on the rates that some properties will be available at a steep discount based on current rates, especially when combining 5th night free
• Starwood Preferred Guest remains a transfer partner of American Express Membership Rewards at a transfer rate of 2:1, or effectively 2:3 for Marriott Rewards

My New Strategy

Current SPG American Express Credit Cards – My Strategy For Starwood Points Since The Marriott Announcement

Currently we have a total of four American Express Starwood Preferred Guest Credit Cards in our house – two business and two personal. There’s a lot of speculation as to the future of these cards in Canada, and we’ve seen a lot of exciting news for American consumers, but we still don’t know for sure whether or not:

• Amex will keep these cards, and they will start earning Marriott Rewards
• Amex will change these into entirely different products
• Amex will discontinue these cards and a new product will be launched (perhaps by a different bank)

My previous prediction, based on the devaluation to the welcome bonuses and referral program, was that Amex would be discontinuing these cards. However, it seems like the cards will be staying around under the Starwood name in The US, which leads me to believe these cards will remain basically unchanged here.

I recently received an email from Amex talking about ‘exciting new changes’, with a link to a landing page on the Marriott website. On the surface level, it seems these cards are sticking around with some new benefits. While it would be nice to see cardmembers get elite qualifying nights towards status, my guess is it won’t be on these cards. Instead, I suspect the ‘new benefits’ to be the introduction of a new earning rate, and maybe an anniversary free-night stay, up to a certain category, if we’re lucky.

I plan to cancel 3/4 of my cards in the coming days, as I believe there will be better opportunity for new applications when the product re-launches compared to current cardmembers, who might be eligible for a retention bonus. In The US, Amex is offering a ‘rich’ welcome bonus on the new products, so hopefully we’ll see a similar offer in Canada.

However, I plan to keep one card open in the event another financial institution launches a new Marriott Rewards card with a special incentive to current SPG Amex cardmembers (similar to what Amex offered for Chase Marriott cardmembers when that product was discontinued).

Earning Points On Everyday Spend – My Strategy For Starwood Points Since The Marriott Announcement

I put a lot of spend on my SPG Amex cards, since I consider Starwood points amongst the most valuable due to the airline transfer partners and great hotel redemption options. In an effort to hoard as many as possible before August, I plan to apply for the American Express Cobalt Card.

The Cobalt Card is a product that didn’t get much love from me when initially launched, mainly because of the inability to churn with the monthly fee and staggered bonus structure. Furthermore, the Membership Reward points were a little different from other products, with airline transfer partners excluded from redemption options. Key points on the card:

• $10 monthly fee
• 2,500 Membership Reward points each month you spend at least $500 on the card (up to 30,000 points per year)
• 5X points on groceries, dining, and entertainment
• 2X points on travel, transit, and transportation/gas
• 1X point on everything else

Currently you can still transfer Membership Reward points to Starwood at a 2:1 ratio, and this includes points earned on The Cobalt Card. I plan to get this card now and use it hard until American Express changes the transfer terms. At the very least, I’m expecting to get:

• 3 months of the bonus (7,500 points)
• 3 months of groceries and eating out at 5X points ($1,000/month = 15,000 points)
• 3 months of gas at 2X points ($400/month = 2,400 points)
• All non bonus spend will go on my Platinum Card

This should net close to 25,000 points, which translates to 12,500 SPG points, which is pretty decent for $30 worth of annual fees and minimal effort.

The Ability To Transfer American Express Membership Rewards To Starwood Preferred Guest – My Strategy For Starwood Points Since The Marriott Announcement

As of now, you’re able to transfer American Express Membership Reward points to SPG at a 2:1 ratio. On the surface this may not look as good as Aeroplan and British Airways (which both transfer 1:1), though it’s actually one of my favourite redemptions out there. I was able to transfer 240,000 Membership Rewards to SPG to redeem for a 7-night stay at the Marriott Wailea Beach Resort and a roundtrip first class flight to Singapore on Japan Airlines. The retail value of this trip was around $25,000, which represents nearly 10 cents per point for Membership Rewards.

I suspect the ability to transfer Amex -> SPG will stick around until July 31, 2018, or at the very least, American Express will provide some advance notice if the terms change before then. It’s not confirmed that the new Marriott Rewards program will stay on as a transfer partner, but if they do, I can almost guarantee the transfer rate will be devalued (probably 1:1 with the new program).

A lot of people are asking what to do, and for now I suggest just waiting a little bit. I don’t expect this transfer opportunity to disappear overnight, and I feel like I want a bit more info before I transfer a mass amount of Membership Rewards over, as speculatively transferring points really limits options (Membership Rewards are still more flexible than SPG).

While I’ll certainly be transferring some points over before August 1, 2018, I would like to know the following to help decide how many points I’ll transfer:

• How the hotels will be categorized under the new program
• If Marriott Rewards will stay on as a transfer partner after August 1, and at what rate points transfer

I think we’ll get the new categories fairly soon, but probably won’t know the answer to the second point until after the transfer, though again, I believe the new transfer rate will be devalued if Marriott stays on as a transfer partner.

Current/Future Bookings – My Strategy For Starwood Points Since The Marriott Announcement

Marriott announced the new redemption rates for free-night awards, and while I could write an entire post on that alone (including the new dynamic pricing disguised as peak/off-peak pricing), they have said the rest of 2018 will only see standard award pricing, and no category 8 until 2019, which is great.

Based on the new award chart, free-night stays for reservations made between August and December, 2018 will cost a maximum of 60,000 Marriott Reward points per night, or 20,000 SPG points. However, if you have stays of 5-nights or longer, you’ll get the 5th night free, bringing the actual cost down to 48,000 Marriott points, or just 16,000 SPG points per night.

This represents a huge savings at certain properties, such as The St Regis New York Hotel, where free-night redemptions have typically been 30,000-35,000 SPG points per night!

For anyone with a reservation at a category 7 SPG property (or who plans to make one), you’re most definitely going to be better off with the new award prices. If you have a current booking, I would hold on to it for now, as you can always cancel after August 1, 2018 and re-book, subject to availability (I would suggest you make the new booking first with the new program before cancelling an existing reservation). Keep in mind that Marriott allows you to book a room without having the required points, so this should be relatively easy to do in all cases.

As for the low-mid tier redemptions, it’s really unknown if you’ll make out better under the new program or at the current redemption rates. My advice to anyone planning upcoming travel beginning after August, 2018: Book now, and change later if rates drop.

I personally think we’re going to see a lot of the low/mid level redemptions increase with the new program. I think Marriott did a great job at announcing all of the positive changes on April 16th, and intentionally held-off on releasing the new category levels.

 A couple of examples where I suspect rates to increase:

The JW Marriott Beijing, currently a category 5 hotel requiring 25,000 Marriott Points per night, will raise to 35,000 points per night if it remains in the same category.

The Ritz-Carlton Jakarta Pacific Place is an absolute steal at just 30,000 Marriott Reward points per night, including lounge access. I can almost guarantee we will see this property increase in price after August 1, 2018.

The Marriott Wailea Beach Resort is currently a Category 8 hotel requiring 40,000 points per night, and I wouldn’t be surprised to see this property re-categorized as level 6 or 7 requiring 50,000-60,000 points per night, so book now if you were planning to!

Hotel+Air Packages – My Strategy For Starwood Points Since The Marriott Announcement

I sincerely thought these packages were going away with the new program, and was relieved to hear they’d be sticking around, as they are the single best way to redeem Marriott points, in my opinion. Although they’re here to stay, Marriott has announced that some prices may be adjusted (read: increased), though that likely won’t happen until after the new program is launched.

In the meantime, if you were planning to purchase one of these packages, I would continue to offer the same advice: Purchase a package that includes the maximum number of miles for the category 1-5 hotels. If you end up redeeming for a higher category, you can simply pay the difference in points. If you purchase a high category and choose to stay a lower rated hotel, it’s difficult/not worth it to get a portion of your points back.

Summary – My Strategy For Starwood Points Since The Marriott Announcement

I really caution everyone to use their own judgement when deciding on a strategy for Starwood points since the Marriott announcement. While I’m fairly confident in my plan, everything I’m predicting could be completely wrong. Maybe the new hotel categories will see a lot of properties go down in price, or the transfer rate from Amex to Marriott could be 1:3, or 1:5, or 1:10 (well, we can dream), or maybe the new earn rates or benefits on the SPG credit cards will be better than expected.

In the end, it’s impossible to predict, but I’d rather be safe than sorry. In summary, my strategy can be summarized in just a few lines:

• I plan to earn as many SPG points as possible while I still can, mainly through everyday spend on the Cobalt Card
• I plan to cancel 3/4 of my SPG cards, banking on new and improved products being launched with better offers for new cardmembers than retention bonuses for existing customers (keeping just one card in the event another bank launches a Marriott Rewards card with incentives for current SPG Amex holders)
• I plan to transfer a large amount of Amex points to SPG before August 1st, but not quite yet, because I want to get a bit more info into the future of Amex -> SPG/Marriott transfers
• I suspect more hotels to increase than decrease in price for free-night stays, and plan to make any bookings at the current rates prior to August 1st, knowing I can re-book/cancel if the rates decrease

I’ll definitely be watching this closely in the coming months and will keep updating as I know more!

What’s your strategy for Starwood points since the Marriott announcement? Let us know in the comment section below!