The Brancatelli File By Joe Brancatelli
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Marriott Thinks We're Stupid. We Probably Are.
Thursday, April 19, 2018 -- Ripping an entire chapter from the Delta SkyMiles three-card-monte playbook, Marriott told us all this week that it thinks we're stupid, rubes ready for the plucking.
As you probably already know, Marriott on Monday released one side of its new frequency program combining all Marriott, Ritz-Carlton and Starwood properties in the gigantic Marriott Yet-To-be-Named plan. We know all we need to know about how to earn and how little Marriott values you unless you stay at least 50 nights a year.
The value of the points we earn in the Marriott Yet-To-Be-Named program? Nothing. Not a peep.
It's exactly the same bait-and-switch Delta pulled in 2014 when it shifted SkyMiles to a revenue-based plan. And Marriott's purpose this week is the same as Delta's four years ago: to hide a massive devaluation. To hope you won't notice your newly reduced buying power for months--or maybe until a year from now, when you want to use your points in the new scheme.
And you know what? Just like Delta, Marriott is gonna get away with it. It knows you're too busy or too lazy or too trapped to care.
After all, what choices do you have? Hilton Honors? It's the very model of a plan intent on making its "currency" worthless. World of Hyatt? Hyatt committed frequency suicide more than a year ago. Wyndham or Choice? Crap programs for mostly crap hotels. InterContinental? Meh. Accor? Not enough U.S. properties, little interest in rewarding loyalty. Best Western? No genuine value for truly frequent guests.
If you want to know what Marriott is touting on the earnings side, surf to its naturally self-serving summary. Gary Leff offers a more even-handed, if somewhat Starwood-centric, summary here. But here is all you need to know about the earnings side in a nutshell: Unless you stay at least 50 nights a year and attain Platinum Elite status, Marriott doesn't think you're worth the occasional free breakfast or guaranteed late check-out time. You're also useless to Marriott if you've been getting Starwood Preferred Guest (and, post-merger, Marriott Rewards) status via your American Express Platinum Card.
But the big scam is Marriott's decision to hold back the award charts. Oh, Marriott did offer up the 2019 framework: eight award categories with prices from 5,000 to 100,000 points a night. But without telling us which of its 6,500 hotels will cost how much in 2019, we know nothing.
Actually, we do know something. It's gonna cost you more to claim awards. A lot more. Maybe 50 percent more for the best Marriott/Starwood/Ritz-Carlton properties. The devaluation is going to be huge and it is going to be painful.
How do I know Marriott will whack any of the rubes dumb enough to play in the Marriott Yet-To-Be-Named program? Simple, unassailable logic.
Give or take a Fairfield Inn in Frostbite Falls, a Delta Hotel in Dogpatch or the Sheraton Schitt's Creek, Marriott knows exactly what it will charge in 2019 for an award night at each of the 6,500 hotels in the program. It has to know. You can't design a frequency plan without knowing how many points you expect to award, how many points you expect players to burn and where those points will be spent. Given Marriott's particular mania for data, it has probably run the numbers a thousand times already.
Marriott knows what the award chart and category assignments will be in 2019. The only reason it won't tell you is that it wants to hide the bad news. Why not do exactly what Delta Air Lines got away with in 2014? Reap some good press now, dump the bad news later. When the media is bored with the story. When too many of the bloggers have been seduced by a new credit card link to earn their 30 pieces of cyber silver. Besides, if you push back the announcement of the award chart, you don't have to deal with accumulated, media-driven pushback, only isolated, solitary complaints of individual Marriott guests who get soaked when they try to claim a particular award.
Second factor pointing to the massive devaluation to come? Marriott is switching to an off-peak/peak pricing chart. There's only one reason to implement a two-tiered price for each award category: to eliminate any outsized value a Marriott player could reap by claiming an award during a period of higher occupancy and higher room rate. Moreover, the peak/off-peak gimmick is the same one deployed by Hilton Honors to jack up award prices before it abandoned its fixed-price charts and sent the price of Hilton properties--even the Hampton Inn in Horseheads--into the stratosphere.
The third point: The current face of Marriott frequency, David Flueck, has been telling anyone who will listen that Marriott Yet-To-Be-Named will award players with about 20 percent more points than the Marriott, Starwood and Ritz-Carlton plans it replaces. Since Marriott needn't worry about stiff competition in a suddenly concentrated lodging market, we can assume that Marriott won't give anything away. Award prices generally will jump by at least 20 percent. Then targeted devaluations will kick in. Maybe 30 percent more at the Residence Inn in Red Deer and 40 percent more at the Westin Walla Walla. And wait until you see what you'll pay for an overwater bungalow at the St. Regis in the Disappointment Islands or a junior suite at the JW Marriott on the shores of Sucker Lake. It's going to be a massacre.
Final Point: Owners of Marriott properties already have been promised a 20 percent reduction in their costs for Marriott Yet-To-Be-Named. There are any number of ways the new plan could cost a hotel owner less. Not a single one of those methods to achieve the reduction is good for us. Not a single one.
All this said, we need to be honest with ourselves: We're to blame for the devaluations to come in Marriott Yet-To-Be-Named. We endlessly hunt for points and miles. We refuse to penalize a company like Delta or Hyatt or Hilton when it devalues. After a brief period of righteous indignation after a big devaluation, we drift back into the same old pattern.
Given this week's revelation--or, more accurately, the non-revelation--the smart ones amongst us will empty our Marriott and Starwood accounts before August, when the first set of combined rules for Marriott Yet-To-Be-Named kicks in. (Fully expecting devaluation from the moment Marriott acquired Starwood in 2016, I'm personally down to 892 Marriott Rewards and 80 Starwood Preferred Guest points.)
The rest of us--most of us, sadly--will continue to allow Delta and Marriott to rip us off and ridicule us.
This column is Copyright © 2018 by Joe Brancatelli. JoeSentMe.com is Copyright © 2018 by Joe Brancatelli. All rights reserved. All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.