Did the Marriott Hotel + Air arbitrage opportunity just get even better?
/All the way back in September, 2016, I wrote that Marriott Hotel + Air packages offered an outlandishly good opportunity to transfer Starpoints to certain airline (but not train!) partners, even if you never intended to redeem the attached 7-night stay certificate.
A curious post by a Starwood employer on FlyerTalk suggests the deal might have gotten even better.
Use Marriott to transfer Starpoints to certain airline partners
Starpoints can be redeemed in multiples of 20,000 points (up to 80,000 points at a time) to receive the following number of points with a number of airline programs (this is a just an illustrative sample):
- United MileagePlus: 12,500
- Alaska Mileage Plan: 25,000
- Delta SkyMiles: 25,000
- American AAdvantage: 25,000
Because Starpoints can be converted into three Marriott Rewards points each, Marriott Hotel + Air redemptions allow you to transfer Starpoints into the same programs at slightly different ratios. 270,000 Marriott Rewards points (90,000 Starpoints) can be converted into:
- United MileagePlus: 132,000
- Alaska Mileage Plan: 120,000
- Delta SkyMiles: 120,000
- American AAdvantage: 120,000
When making these redemptions, you'll also receive a 7-night certificate good at a Category 1-5 property. Due to the fifth night free on award stays, that stay is worth between 45,000 (7 nights at a Category 1 property) and 150,000 points (at a Category 5 property) according to the current award chart.
"Outstanding Marriott Travel Packages will be cancelled and converted to equivalent points"
One thing that could happen after August 1 is that Marriott Travel Packages would be mapped to the new categories, with Category 5 certificates mapped to the new Category 4, Ritz-Carlton Tier 5 certificates mapped to the new Category 8, and the other certificates falling somewhere in between.
But according to Starwood's representative on Flyertalk, that's not the case. Instead:
"Floater certificates, including outstanding Marriott Travel Packages, will be cancelled and converted to equivalent points, credited to the member’s account for future redemption."
You might say (or sing, if you're so inclined), "what do you mean by that? That is not an answer."
And you'd be right! We have no idea how many points Marriott thinks are "equivalent" to a 7-night stay certificate. But instead of whining about uncertainty, I want to walk through a simple exercise thinking instead about the distribution of possibilities:
- Low-value outcome: Category 1-5 certificates are converted to 45,000 points each;
- Mid-value outcome: Category 1-5 certificates are converted to between 60,000 and 120,000 points each;
- High-value outcome: Category 1-5 certificates are converted to 150,000 points each.
This exercise illustrates that just being a "pessimist" isn't enough. Even If you think there's an 85% likelihood of the low-value outcome, a 10% chance of a mid-value outcome, and just a 5% chance of the high-value outcome, you should estimate the value of a 7-night certificate to be around 55,000 Marriott Rewards points, which means you're almost (5,000 transferred Ultimate Rewards points away) at another 25,000-mile transfer under the new Marriott Rewards program.
Of course, the more confident of the mid- or high-value outcomes you are, the more such redemptions you should be willing to make before August 1.
But no matter how you assess the distribution of possibilities, if you typically redeem your Starpoints by transferring them to airline partners, you should consider leaning into this one-time opportunity.
