Marriott Travel Packages are getting more expensive (also maybe more valuable)

I saw Spencer Howard post on Twitter a seemingly-official (or at least well-spoofed) document listing the new prices of Marriott Hotel + Air packages when the combined Marriott, Starwood, and Ritz-Carlton program goes into effect on August 1.

Let's talk about it.

Marriott Hotel + Air packages today

Today, Marriott Hotel + Air packages offer a discount of roughly 24 to 38% when redeeming Marriott Rewards points for 7 consecutive nights and a variable number of miles transferred to one of their partner airlines:

  • The smallest package offers 7 nights at a Category 1-5 property (worth up to 150,000 Marriott Rewards points since the 5th night is free in any case) and 50,000 miles, worth 120,000 Marriott Rewards points (since that amount can be converted into 40,000 Starpoints and transferred to many of the same airline partners, although the Starwood transfer ratio to United is much worse), but costs just 200,000 points, a 26% discount.
  • What seems to be the most popular package among travel hackers offers the same 150,000-point, 7-night stay plus 120,000 miles, worth 288,000 Marriott Rewards points using the same calculation above, but costs just 270,000 points, a 38% discount (giving rise to the odd situation discussed here).
  • Finally, the largest package offers a 7-night Tier 5 Ritz-Carlton stay, worth 420,000 Marriott Rewards points, plus the same 288,000-point mile transfer, but costs just 540,000 points, a 24% discount.

Again, these calculations are based on the current Hotel + Air award chart.

Marriott Hotel + Air packages after August 1, 2018

Now let's apply the same logic to the Hotel + Air chart Spencer posted for redemptions after August 1, 2018.

  • At the low end, you can redeem 255,000 points for a 7-night Category 4 stay plus 50,000 miles, which would otherwise cost 270,000 Marriott Rewards points: 150,000 points for the 7-night stay, and 120,000 points for the mileage transfer, a mere 5.6% discount.
  • The same stay certificate plus 100,000 miles costs 330,000 points, raising the discount to 15.4%.
  • At the high end, a 7-night Category 8 stay (starting in 2019) plus 50,000 miles costs 675,000 points and is worth 630,000 points, a 7% premium over making the two transactions separately!
  • Transferring 100,000 miles instead raises the value of the package to 750,000, which is, in fact, what the most expensive package costs.

This pattern repeats itself for the other packages as well: discounts are small or negative at the 50,000-point redemption level, and range from 5% to 15% at the 100,000-point level.

Marriott Hotel + Air Packages after January 1, 2019

While losing an opportunity to book hotel stays and buy airline miles with a 38% discount is unambiguously a devaluation, I think the explanation is not what will happen in August, but what will happen next January, when Off-Peak and Peak pricing goes into effect. These 7-night stays make no sense at almost category property during Off-Peak periods (an Off-Peak Category 6 redemption would cost just 360,000 points booked separately, but Marriott charges 415,000 points!).

But during peak periods, the discount can be noticeable even at Category 8 properties, where a 50,000-point package will cost 675,000 points but is worth 720,000 points (6.3% discount) and a 100,000-point package costs 750,000 points but is worth 840,000 points (10.7% discount). Note also that these Category 8 properties will include Starwood's current top-end properties in addition to Marriott's.

And if you book a Peak Category 4 hotel with a 100,000-point package, the discount rises to 21.4%, which is at least in the same ballpark as the existing packages.

However, these are still much lower discounts than those offered by the current Hotel + Air packages, so you should certainly book any packages you're interested in before the August 1 changes go into effect. There's been a lot of speculation about how unredeemed stay certificates will be treated after August 1, but given the discounts currently available I think it's largely irrelevant: getting back any points at all from unredeemed certificates will make them an even better deal, and updated points-based certificates would still be able to be used at the much larger joint Marriott-Starwood hotel footprint.

Not too many Ultimate Rewards points angles

Since I get any Marriott Rewards points I need through Ultimate Rewards transfers, I'd like there to be some way to take advantage of Hotel + Air packages that way, but the fundamental problem is that Ultimate Rewards points can already be transferred to programs in each airline alliance, Southwest, and Hyatt at a 1:1 ratio, while Marriott Rewards points can only be transferred at a 3:1.25 ratio.

That means while Hotel + Air packages are good redemptions of Marriott Rewards points (improving their value over individual stay redemptions and individual airline transfers), they're bad redemptions of Ultimate Rewards points.

The exception is if you already have a large Marriott Rewards balance you're considering transferring to Starwood Preferred Guest in order to make an airline transfer. In that case, you should consider instead transferring over Ultimate Rewards points in order to redeem a Hotel + Air Package. For example, 240,000 Marriott Rewards points are worth 80,000 Starpoints, which can be redeemed for 100,000 miles. But transferring 10,000 Ultimate Rewards points over to Marriott will allow you to receive the same number of miles (or more in the case of United MileagePlus), but also a 7-night Category 1-5 certificate.

No matter what Marriott decides to do with those certificates on August 1, it's virtually guaranteed to be worth more than 10,000 Ultimate Rewards points.

Hotel benefits by length of stay

The other day I was looking at hotels for an upcoming weekend trip with flexible dates. I settled on a convenient Hilton property, and was immediately annoyed that I only really needed 4 nights, even though the fifth award night would be free. I vented on Twitter and Milenomics contributor Robert Dwyer pointed out that if I had a Citi Prestige card I'd be sitting pretty with that card's fourth-night-free benefit.

That got me to thinking about the connection between length of stay and optimal booking options.

One-night stays

One-night stays are great because they're opportunities to redeem free night certificates at chains where you don't otherwise have any points or status. For example:

  • Chase IHG Rewards Club Premier cards offer an anniversary free night certificate good at properties costing up to 40,000 points;
  • the new suite of Marriott and Starwood credit cards will offer anniversary free night certificates good at properties costing between 35,000 points and 50,000 points, depending on the card;
  • Chase Hyatt credit cards offer anniversary free night certificates good at category 1-4 properties (up to 15,000 points per night).
  • For stays within the United States, the US Bank Radisson Rewards ($50 annual fee) and Radisson Rewards Premier ($75 annual fee) cards offer up to three anniversary free night certificates valid only at Radisson Rewards properties in the United States when spending $10,000, $20,000, and $30,000 on the cards each cardmember year. If you're going to spend $30,000 on one of these cards my general feeling is that you may as well pay the extra $25 annual fee and get 75,000 additional points annually between the two additional points per dollar the Premier card earns and the 15,000 additional anniversary points.

For longer stays, I don't like free night certificates because they force you to overpay for the nights that aren't covered by the certificate, or move between properties during your trip. But for one-night stays they're ideal, and I often use them for things like airport properties before an early morning flight.

Another option for one-night stays, depending on the property, is booking through one of the luxury travel portals:

  • the Visa Signature Luxury Hotel Collection offers a package of benefits including free Wi-Fi, breakfast for two guests, and a $25 food and beverage credit. If the price is the same as through other booking channels, then on a one-night stay the food and beverage credit can handily offset things like resort fees (which would also be owed on award stays), while on longer stays, the resort fees continue to mount while the food and beverage credit can be used only once.
  • likewise American Express offers a Fine Hotels and Resorts booking channel to their Platinum cardholders, which offers a more generous $100 food, beverage, or spa credit at some properties. Just as above, on a one-night stay that credit naturally goes further than on longer stays.
  • Finally, you can use a Virtuoso travel agent like classictravel.com to secure similar benefits while booking with the card of your choice.

Two- and three-night stays

This is the real wheelhouse of hotel points and fixed-value points, especially if you're able to redeem cheap fixed-value points like US Bank Flexpoints against your stay (if the total cost is above $500), since you'll also earn points on the room rate you pay. If you'd otherwise pay cash, redeeming points is usually a good idea in this window, since easily-earned points like Hilton Honors, World of Hyatt, and (under certain circumstances) IHG Rewards Club points don't offer any advantages, and the resort fees at luxury properties eat up the potential value of the food and beverage credits discussed above.

Some third-night-free offers may also be available through American Express Fine Hotels and Resorts, but unless you've done your research in advance I wouldn't sign up for a Platinum card just in hopes of capitalizing on third-night-free offers.

Four-night stays

At the four-night mark, three additional opportunities open up:

  • fourth-night-free booking options through American Express Fine Hotels and Resorts. These are somewhat more common than third-night-free offers, so for four-night stays in cities served by Fine Hotels and Resorts this may be worth checking since the free night and on-property benefits may lower the total cost below any points redemption you'd otherwise consider.
  • the Citi Prestige fourth-night-free benefit allows you to book four-night stays while only paying the room rate on 3 nights (although taxes and fees are still owed on the fourth night).
  • the Chase IHG Rewards Club Premier card fourth-night free benefit on award stays, which means that otherwise-marginal redemptions may be worthwhile, if the free fourth award night boosts you well above your points' imputed redemption value.

Five-night stays

Presumably because their Top Men told them that virtually no one books five-night award stays, Hilton Honors, Marriott Rewards, and Starwood Preferred Guest all offer the fifth night free on awards stays (Hilton only in the case of elites, but if you're not a Hilton elite I don't know what to tell you).

Seven-night stays

Finally, if you actually have a seven-night stay with Marriott planned at a Category 5 or higher Marriott Rewards property, you should consider booking it with a Hotel + Air Package before August 1, 2018, in order to receive 120,000 or more airline miles alongside your hotel redemption.

Conclusion

I give most people the benefit of the doubt that they understand their travel needs better than I do, so I try not to tell people what they should or shouldn't do. The flip side of that is that you should take the time to assess your own travel needs and figure out which configuration of airline, hotel, and credit card programs works best for you.

For example, if you take the occasional five- or seven-night international trip, but are putting your manufactured spend on a Radisson Rewards credit card, that's not an indictment of the program, it's a mismatch between what you're doing and what you need to be doing to pay as little as possible for the trips you want to take.

Likewise, if your travel consists of taking the occasional road trip to Chicago, you may well want to be earning free night certificates and points you can redeem at the Radisson Blu Aqua, one of the few really great hotels in the Radisson Rewards program in the United States.

Transfer Starpoints to Amtrak Guest Rewards before August 1, 2018

For many years I was a booster of Chase Ultimate Rewards transfers to Amtrak Guest Rewards, due to their zone-based redemption system which made it possible to get 3 or more (possibly much more) cents per point when redeeming Amtrak Guest Rewards for transcontinental sleeper accommodations.

Unfortunately, in December, 2015, Ultimate Rewards points could no longer be transferred to Amtrak Guest Rewards, and in January, 2016, Amtrak moved from a zone-based to a fixed-value redemption scheme.

However, those fixed-value points are still quite valuable!

Refresher: the value of Amtrak Guest Rewards points

Amtrak Guest Rewards points are similar to Southwest Rapid Rewards points in that they have fixed values, but the value they're fixed at depends on the redemption in question. For example:

  • a coach seat on the Northeast Regional from Washington to Boston costs $79 or 3,830 points, for 2.06 cents per points;
  • a business class seat on the Acela Express between the same cities costs $138 or 7,176 points, for 1.92 cents per point;
  • a first class seat on the Acela Express costs $282 or 10,998 points, for 2.56 cents per point;
  • a coach seat between Chicago and Los Angeles on the Southwest Chief costs $142 or 6,107 points, for 2.33 cents per point;
  • a Superliner Roomette costs $794 or 27,393 points, for 2.9 cents per point;
  • a Family Bedroom costs $1,158 or 39,951 points, for 2.9 cents per point;
  • a Superliner Bedroom costs $1,606 or 55,407 points, for 2.9 cents per point.

Starpoints can be transferred to Amtrak Guest Rewards through July 31, 2018

Starwood has announced that transfers to Amtrak Guest Rewards will end with the introduction of the new Marriott Rewards program on August 1, 2018, although it's fair to speculate whether Marriott will arrive at their own accommodation with Amtrak after that date.

Amtrak redemptions are good and you should consider speculatively transferring points

Amtrak Guest Rewards points aren't very valuable if you want to do anything but take train trips, but if you do want to take train trips, they're quite valuable. Earning 2.9% in value on unbonused spend with the Starwood Preferred Guest credit card on unbonused spend puts it solidly up there with the most lucrative cashback credit cards.

If you have an upcoming trip you might consider buying points

I earn virtually all of my miles and points through manufactured spend, but I'm perfectly aware that periodic opportunities to pay cash for miles and points can offers discounts off cash rates under certain circumstances. As Frequent Miler explains, there's currently a Starwood Preferred Guest promotion to purchase points for 2.275 cents each, which would offer a discount of 21.6% off the long-haul Amtrak Guest Rewards redemptions I mentioned above.

That's not a huge discount in absolute travel hacking terms, but if you have an upcoming Amtrak trip planned and you'd otherwise pay cash for it, it would be silly not to instead pay 21.6% less for the same trip.

Speculatively transfer points skeptically

I like trains, so I'd happily transfer an almost unlimited number of Starpoints to Amtrak if I were certain they would maintain their current redemption system. Unfortunately, I'm certain they won't, and I wouldn't recommend anyone transfer Starpoints to Amtrak Guest Rewards for train trips they plan to take more than one or two years in the future.

Conclusion

The Starwood-Marriott merger has created a lot of one-time opportunities we'll all be talking about leading up to and after August 1, 2018. The opportunity to transfer Starpoints to Amtrak Guest Rewards is one that anyone with a large Starpoint balance and an interest in Amtrak travel should consider.

Absolute versus relative redemption values

In Wednesday's post about passing on the current IHG Rewards point sale, I mentioned that it's not enough to get good absolute value from a points redemption if you're not also getting good value relative to other redemption options. I think a lot of people understand this idea intuitively, but since it's central to my travel hacking practice, I want to spell it out in more detail.

Absolute value matters if you don't have choices

If you're constrained in your choice of hotels, airlines, or routes, then you are perfectly justified in thinking about the absolute redemption value of your points. A classic example would be a wedding or conference where you're expected to stay in a particular hotel. If the conference rate is $300 per night, and you're able to book it for 30,000 points instead, you know for a fact you're getting 1 cent per point in value.

You still have to make a choice though: is 1 cent per point a good redemption value or a bad redemption value? If you're redeeming a currency that's otherwise redeemable for cash at one cent each, like Ultimate Rewards points, then it's a bad value, since the paid rate will earn a larger rebate than the redemption. If you're redeeming a currency you paid much less than one per point for, then it might be a good value, since you're realizing a discount off a stay you'd otherwise have to pay cash for.

Relative value matters if you get to choose

In Madison, Wisconsin, there are there chain hotels more or less equidistant from the Capitol:

  • Hilton Madison Monona Terrace
  • Hyatt Place Madison/Downtown
  • AC Hotel Madison Downtown

On a random upcoming Wednesday night, the lowest available rates are quite close:

  • Hilton: $144.53
  • Hyatt: $148.01
  • AC Hotel: $162.86

If you were paying cash, you'd book the Hilton and call it a life. Meanwhile, the cost in points is all over the place (as you'd expect since they're different currencies). Here are those costs, and the redemption value compared to our fallback option of paying $144.53 at the Hilton:

  • Hilton: 36,000, 0.4 cents per point
  • Hyatt: 8,000, 1.8 cents per point
  • AC Hotel (Marriott): 25,000, 0.58 cents per point

These are all well within the normal range of redemption values for these currencies. But in order to determine the highest relative value, we need another piece of information: the cost we paid for the currency in question.

If you earn Hilton Honors points through grocery store manufactured spend, you earn 6 points per dollar spent, instead of 2 US Bank Flexpoints (worth 3 cents towards travel redemptions) with the Flexperks Travel Rewards card or 2 Membership Rewards points with the American Express Premier Rewards Gold card. Meanwhile, if your best method of earning Hyatt and Marriott points is transfers from a flexible Ultimate Rewards account like the Sapphire Preferred, Sapphire Reserve, Ink Plus or Ink Preferred, then you're effectively paying one cent each for those points — the value of Ultimate Rewards points when redeemed for cash.

The best relative value is therefore the Hyatt redemption: paying the equivalent of $80 for $144.53 in value is better than paying $180 (Hilton) or $250 (Marriott).

Alternative: availability-weighted relative value

The above methodology is appropriate for someone with access to plentiful manufactured spend and plentiful travel, which is sometimes treated as the "default" mode for travel hackers.

But of course that describes relatively few people in the real world. Far more common are business travelers who passively accrue points balances on their employer's dime, and casual travelers who discover they've accidentally accumulated a substantial balance in one or more loyalty accounts.

In those cases, I think the relative value calculations I described are almost useless, and it's better to use what you might call "availability-weighted" relative value: if Marriott Rewards points are the points you happen to have because your workplace has a contract with Marriott, you should redeem them more aggressively than a strict relative value calculation would suggest.

This is equally true of travel hackers who refuse to redeem points for anything less than their "optimal" value. If you have a large Hilton balance and a low Ultimate Rewards balance, it makes perfect sense to make a weak redemption at the Hilton instead of a good redemption at the Hyatt. That's what I mean by "availability-weighting" relative value.

If this is your strategy, remember you'll also want to normalize your balances for your typical redemption size. If you have 300,000 Hilton Honors points, 300,000 Hyatt points, and 300,000 Marriott points, which currency do you have "more" of? The obvious answer is Hyatt, where redemptions top out at 30,000 points, then Marriott (70,000), then Hilton (95,000+). However, those answers might be flipped if you have particular properties, and particular values, you typically redeem each currency at.

Conclusion

There is so much fuzzy thinking about the value of different loyalty currencies that I usually ignore people trying to nail down the precise value of this or that program, although I liked the Wandering Aramean Hotel Hustle "average point values" feature back when it was functional, mainly because it confirmed my intuitions.

Instead, I find it simpler to work forward from cost rather than backward from value. I know how much I pay for the loyalty currencies I earn, so for a given trip, I try to find the redemptions that cost the least in foregone value, while also taking into account which currencies I have the most of and therefore are most in need of redemption.

Just remember: your least valuable point will always be the one you don't redeem.

To my reader who mistyped his own e-mail address, Starwood edition

I recently received a question from a reader using the "Contact" page, but the reader seems to have mistyped their e-mail address, which I discovered only after writing my reply. Hopefully reader TF will stop by and find my answer here instead:

"If you have multiple millions of SPG points and tons of airline miles already then it’s not obvious that you should do anything.

"If there’s a particular airline currency you redeem more than any other, you might consider transferring your SPG points to Marriott and booking a bunch of Hotel + Air redemptions (90k SPG -> 132k United miles or 120k Alaska/Delta/American miles). It’s not clear how Amtrak transfers will work after August 1, so if you like taking Amtrak you can also get a good value transferring your SPG points to Amtrak (note that you don’t get the 5k bonus when transferring 20k points to Amtrak).

"However, it’s not like your points will vanish on August 1. If you have been earning your SPG points through hotel stays, well, you can redeem your new Marriott points for hotel stays going forward. A million SPG points will become 3 million Marriott points, which will be enough for 50 nights at any top-tier Marriott property in the world after August 1 (and a whole lot more nights than that at lower-tier properties).

"If you truly cannot imagine needing any more airline miles, and you truly can’t imagine needing any more Marriott/SPG hotel stays, then you could try to sell points or reservations to other people, or through a points broker. Even if you don’t need a stay or flights, perhaps you have friends or family members you could sell redemptions to at a discount, or be the cool aunt or uncle and send your nieces and nephews on an exotic vacation?

"Let me know if I can help with anything else.

"—FQF"

So, there you go TF.

I try to respond to everyone who leaves comments, e-mails me, or submits a contact form, but if you would like to ask a question in private and not have my answer blasted on the internet, be sure to use a working e-mail address.

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.

Is there any value in the latest crop of new credit cards?

[edit 5/14/18: added unlimited Priority Pass Select membership to list of Ritz-Carlton card benefits.]

Several banks have let out a steady trickle of new credit cards and announcements in the last few months, so I thought I'd run through a few of them and see if there are any offers worth signing up for or keeping.

Barclays Arrival Premier

I have had an Arrival Plus card for years, and use it for all my non-manufactured, non-bonused spend, as well as manufacturing spend on it. It has an $89 annual fee, for which you can redeem 8,900 miles as a statement credit. Since it earns a 5% rebate on all the miles you redeem, it functions as a 2% cash back card when you spend "about" $85,000 per year, since when you redeem those 170,000 miles you'll earn 8,500 in rebated miles and another 425 rebated miles when you redeem those, for a total of $89.25 in rebated miles. I also use the card's chip-and-PIN functionality to buy public transit tickets overseas, and Barclays recently added a flight delay benefit.

The new Barclays Arrival Premier has a number of differences from the Arrival Plus:

  • $150 annual fee;
  • no rebate on redeemed miles. Instead, earn 15,000 bonus miles when you spend $15,000 per cardmember year, and another 10,000 bonus miles when you spend a total of $25,000 per cardmember year;
  • $100 Global Entry fee credit every 5 years;
  • transfer miles to airline partners (Aeromexico, Air France/KLM Flying Blue, China Eastern, Etihad, EVA Air, Japan Airlines, Jet Privilege, Jet Privilege, Malaysia Airlines, Qantas).

This card is strictly superior to the Arrival Plus for annual spend between $15,000 and $85,000:

  • at $15,000 in spend, you receive 15,000 bonus miles, which are enough to cover the $150 annual fee;
  • between $15,000 and $25,000, the card acts as a straight 2% cash back card;
  • at $25,000 in spend, you receive another 10,000 bonus miles, which means the card has earned a total of $600 on $25,000 in spend, or 2.4% cash back.

Only for spend in excess of $85,000 will the Arrival Plus's mileage rebate make the return on unbonused spend, after accounting for the annual fee, exceed the Arrival Premier.

Verdict: I'm not in any rush to sign up for the Arrival Premier since it doesn't have a signup bonus and it's not yet possible to upgrade from the Arrival Plus. I assume eventually Barclays will target existing Arrival Plus cardholders with an upgrade offer, which I'll likely take. If you don't have an Arrival Plus yet, the Arrival Premier seems like a perfectly reasonable way to get 2.4% cash back on $25,000 in spend each year, plus serving as a go-to card you can use when traveling internationally.

Starwood Preferred Guest American Express Luxury Card

I think this is the most interesting of the new Marriott Rewards cards that will be available in August, 2018, since it offers a higher earning rate on Marriott and Starwood purchases than the new Ritz-Carlton card, a more valuable anniversary free night award than the new Premier Plus card, and the ability to earn Platinum status after spending $75,000 during the calendar year.

If you spent $75,000 on the card per year, you'd end up paying a $450 annual fee for:

  • a free night award worth up to 50,000 points;
  • 150,000 Marriott Rewards points;
  • $300 in statement credits against purchases at Marriott and Starwood properties, which should include room charges;
  • Platinum status;
  • and an unlimited Priority Pass Select membership.

Assuming you are able to redeem your free night award at a Category 6 or off-peak Category 7 property each year, your $75,000 in spend will earn the equivalent of 200,000 Marriott Rewards points, or 2.67 points per dollar. That's not quite as good as the Starwood Preferred Guest American Express card currently earns (3 Marriott Rewards points per dollar), but it does reduce the devaluation from 33% to just 11%.

Verdict: this card is too expensive to bother with for a leisure travel hacker, but a reimbursed business traveler who can choose their own hotel, and can therefore redeem the $300 statement credit for their employer's cash, might consider manufacturing up to $75,000 in order to enjoy Platinum status on a 4-night, off-peak Category 7 vacation starting in 2019.

Ritz-Carlton Rewards Credit Card

This card also has a $450 annual fee, but with almost nothing to show for it:

  • a $100 statement credit on two-night paid stays at the Ritz-Carlton;
  • 3 annual Club Upgrades on paid stays;
  • a $300 travel credit;
  • Platinum status after spending $75,000 per account year;
  • and an unlimited Priority Pass Select membership.

It's important to note that even if you're a reimbursed business traveler, and even if you spend $75,000 per year at Marriott Rewards and Starwood properties each year, you should be using the Starwood Preferred Guest Luxury Card for that spend since it earns 6, rather than 5, points per dollar spent on those purchases. Using the Ritz-Carlton Rewards card would be leaving 75,000 points on the table.

I know families that love using Club Upgrades to save money feeding their kids when staying at Ritz-Carlton properties, but even if you are able to cash out the $300 travel credit, there's no way I'd be willing to pay $150 to pre-commit to a paid stay at a Ritz-Carlton every single year.

Note that, as is typical for Chase, the Ritz-Carlton card's Platinum status qualification is based on cardmember year spend, not calendar year spend, while typically for American Express, the Starwood Preferred Guest Luxury Card awards Platinum status based on calendar year spend. That means if you sign up for the Ritz-Carlton card for a signup bonus and decide to hit the $75,000 spend threshold to get Platinum status, you'll want to meet the spend requirement early in a calendar year, which should get you Platinum status for the remainder of that year and all of the following year.

Verdict: skip it — nothing to see here.

Marriott Rewards Premier Plus, Starwood Preferred Guest Credit Card, and Starwood Preferred Guest Business Credit Card

In addition to the two ultra-premium cards, Chase is also launching a new Marriott Rewards-branded card with a $95 annual fee and an annual anniversary free night award worth up to 35,000 points, and adding that benefit to the existing Starwood Preferred Guest consumer and business credit cards.

On its own these card aren't very interesting, since Marriott is the worst offender in terms of category creep, seemingly deliberately targeting the few valuable properties where free night certificates can be redeemed and moving them out of the eligible redemption categories, so I would never pay $95 for what's essentially a Category 5 free night certificate (or Category 4 peak season award).

However, one strategy that could make sense for some people is to combine one, two, or three of these cards with the Starwood Preferred Guest Luxury Card mentioned above. If you carried all four cards and spent $75,000 per year on the Luxury card, you could pay $735 in annual fees and $1,500 in opportunity cost (assuming a 2% cash back alternative) for:

  • 150,000 Marriott Rewards points;
  • 3 35,000-point free night awards;
  • 1 50,000-point free night award;
  • and Platinum status.

The point is simply that once you've manufactured Platinum status with the Luxury card, you should value the free night awards earned by the other 3 cards more highly than before. A 35,000-point free night award might not be worth $95 with Silver status, but might be worth $95 with Platinum status. Likewise one 35,000-point free night award might not be worth $95, but 3 might be worth $285 (if you can avoid moving hotels or paying cash to stay in the same hotel), and if so, then they should be even more valuable with Platinum status.

Verdict: whether or not stacking free night awards with Platinum status is worth the time and trouble is going to depend on how properties shake out into Marriott's new hotel categories. If, as I suspect, the most appealing city properties start in or quickly move into Category 6 and above, then the 35,000-point free night awards offered under the new program will be as worthless as the Category 5 awards they hand out today are.

Bonus: don't forget to cancel your Citi AAdvantage cards!

Not a brand new credit card, but a few days ago Citi e-mailed to tell me that:

"As a valued cardmember, soon you’ll automatically earn 2X miles at restaurants and at gas stations with the Citi / AAdvantage Platinum Select World Elite Mastercard.

"You’ll also be able to earn a $100 American Airlines flight discount after you spend $20,000 or more in purchases during your card membership year and renew your card. Your purchases on or after ‌July 22‌, ‌2018‌, qualify toward meeting the minimum spend requirement to receive this benefit."

I didn't have to scroll very far down to also see, "The annual membership fee for this card will be increasing to $99."

The card wasn't worth keeping at $95, so don't let them squeeze another $4 out of you!

Which blackout date policy will the new Marriott Rewards program adopt?

Lots of digital ink has already been spilled over what has been announced regarding the upcoming August 1, 2018, merger of the Marriott Rewards and Starwood Preferred Guest programs. One question we won't know the answer to until the changes go into effect is what the blackout-date policy of the new program will be, and even more importantly, how it will be implemented.

Marriott has a much more restrictive "no-blackout-date" policy than Starwood

As I explained back in 2014, Marriott allows properties to designate "Inventory Control Dates," on which they're allowed to limit the number of standard rooms available for redemptions. The tortured reasoning seems to be that it's not the date that's blacked out, but rather the rooms that are blacked out.

Starwood, on the other hand, states that "As a Starwood Preferred Guest member, you’ll never encounter a blackout date for Free Night Awards at SPG Participating Hotels. Unlike our competitors, we don’t limit the number of standard rooms available for redemption. So, if we have a standard room available at an SPG Participating Hotel, and you have the Starpoints – it's yours."

The merger page simply reads, "No blackout dates to get in your way," without any additional details.

Inventory control dates will infuriate Starwood loyalists

There are many times more Marriott properties than Starwood properties, and Marriott property managers are used to their inventory control dates, so I do not see how it would be possible for the combined program to adopt Starwood's much more generous policy without spending vastly more money reimbursing properties for award nights.

But it almost seems less plausible that starting August 1 Starwood members won't be able to redeem their points without restriction at properties where they can today!

There are ways Marriott could attempt to thread this needle. Since different brands already have different service standards (shampoo, bathrobes, room service), they could simply say that existing Starwood brands will have as one of their service standards a true no-blackout-date policy, while existing Marriott brands will continue to use inventory control dates.

Alternately, they could use Starwood's policy globally, but turn a blind eye to properties abusing the definition of a "standard room" (it may be apocryphal, but my favorite version of this is the property that supposedly put a fax machine in the corner of their standard rooms and called them "executive").

Conclusion

Both Marriott members are rightfully glad they can now book Starwood properties, and Starwood members are looking forward to the big 43% cut to the cost of top-tier properties coming in August. But while Starwood members know to be concerned about the influx of members to their preferred properties, a process that will only accelerate when the programs finally merge and making reservations across brands becomes seamless, the introduction of inventory control dates would mean that bigger pool of members and points will be chasing fewer total available rooms for redemption.

We'll find out soon enough if and how Marriott deals with the problem!

Two takeaways from Starwood Preferred Guest merger announcement

Since blog subscribers already knew about the changes coming to Marriott's elite status qualification in August, I want to highlight two additional takeaways from the details released Monday about the new program.

Starwood Preferred Guest cardholders see a 33% devaluation

Right now Starwood Preferred Guest cardholders earn 1 Starpoint per dollar spent on purchases, and can transfer 20,000 Starpoints to 25,000 airline miles with most of their partner airlines.

After August, they'll earn 2 Marriott Rewards points per dollar spent, and be able to transfer 60,000 Marriott Rewards points to 25,000 airline miles.

The same $20,000 in spend will only get you two-thirds of the way to the same number of airline miles, meaning that on a per-dollar-spent basis, you'll see a 33% devaluation.

Ultimate Rewards transfers look a little better for certain Starwood stays booked in 2018

Currently, flexible Chase Ultimate Rewards points transfer on a one-to-one basis to Marriott Rewards, where they can be transferred on a three-to-one basis to Starwood Preferred Guest. Since Starwood properties top out at 35,000 points, they require up to 105,000 Ultimate Rewards points per night (84,000 Ultimate Rewards points per night on a fifth-night-free award stay).

In August, standard awards will top out at 60,000 Marriott Rewards points, or 43% less than top-tier, peak-season Starwood stays cost today.

"Starting in 2019," standard awards will top out at 100,000 Marriott Rewards points during peak season, bringing the 2019 award chart basically in line with where it is today, although 70,000-point off-peak Category 8 awards will still look better than the 90,000 points they cost today.

Annoyingly, Marriott did not include information one way or the other about whether the new program will continue to offer the fifth night free on award stays. I feel like they could have cut 7 seconds off one of their garbage promotional videos to mention that important piece of information (note that embargoed-for-your-protection Gary Leff says the feature will remain).

Conclusion

Both these observations point in the same direction: if you have a Starwood Preferred Guest credit card today, you have up to 4 more statement closing dates before the changes go into effect. While the Starwood Preferred Guest American Express cards have always been decent for unbonused manufactured spend, especially if you had a particularly lucrative hotel stay or airline transfer partner in mind, all your spend that posts by your July statement closing date will be grandfathered in at the current airline transfer rate and benefit from lower point requirements at Starwood Preferred Guest Category 6 and 7 properties after August 1.

In other words, it's a uniquely auspicious time to pivot away from your other unbonused manufactured spend credit cards and towards your Starwood Preferred Guest, especially if you primarily redeem your Starpoints for Category 6 and 7 redemptions.

This post is focused on Starwood Preferred Guest members because Marriott Rewards members have been so screwed for so long I don't think it's worth dwelling on the fact that the beatings will continue for the foreseeable future.

It's true that the creation of three additional Marriott Rewards redemption tiers above the current maximum redemption rate of 45,000 points will create additional headroom for Marriott to inflate properties into more expensive categories, punishing people who earn Marriott Rewards points through paid stays (and certainly make the 25,000-point and 35,000-point free night certificates just as worthless as they are today). But my working assumption is that anyone who has been earning Marriott Rewards points through paid stays is already so thoroughly downtrodden they'll scarcely notice that the beatings have slightly accelerated.

Table stakes for a decent Marriott credit card reboot

I've been traveling all week, but followed with interest the announcement that Marriott will be rebooting their credit card lineup, with "mass consumer," "premium," and "super premium" credit cards offered by Chase and American Express. Having no interest in speculating about what the cards will actually look like, but wanting to say something about it, here's my take on what to look for in the credit card reboot.

The problem with Marriott credit cards

I haven't carried a Marriott credit card for years, because despite Marriott's broad global footprint, the cards stink:

  • The earning rate of 1 Marriott Rewards point per dollar translates into an imputed redemption value of $900 for top-tier properties, which cost 45,000 points per night. That's absurd compared to any other hotel rewards program besides IHG Rewards Club.
  • The annual free night certificates offered by the Marriott Rewards Premier credit card are limited to Category 1-5 properties. Marriott has experienced enormous category creep in the last several years, so there simply aren't any Category 5 properties available in the medium and large cities I typically visit. Even IHG Rewards Club credit cards offer free night certificates you can use at all IHG properties worldwide.
  • While not impossible, it's outlandishly expensive to manufacture mid- and top-tier status through the Marriott Rewards Premier credit card, requiring as it does $105,000 in spend (in addition to the 15 free elite qualifying nights) to earn mid-tier Gold status.

I'm not in the prediction business, so I don't expect Chase and Marriott to implement my suggestions, but here's the absolute minimum I would look for to even begin to be interested in one of the rebooted credit cards.

An earning rate of 1.5 points per dollar

The fundamental problem with the Marriott Rewards co-branded credit cards has always been the same: their redemption rates top out at 45,000 Marriott Rewards points, which is higher than Hyatt (30,000) or Starwood (35,000), but the earning rate on their co-branded credit cards is the same (one point per dollar). Hilton properties top out at 95,000 points per night, but their credit cards earn a minimum of 3 points per dollar (and offer bonus points in easily-manufactured categories).

The problem was made even more ridiculous when Starpoints became transferrable to Marriott Rewards at a 1:3 ratio, so the same top-tier hotel award night required $15,000 in spend on a Starwood Preferred Guest American Express, but $45,000 in spend on a Marriott Rewards co-branded credit card.

Besides that, anyone can earn 1.5 Marriott Rewards point per dollar with a Chase Freedom Unlimited credit card paired with a $95 Sapphire Preferred, Ink Plus, Ink Bold, or Ink Preferred credit card. Why would they pay anything at all for a Marriott Rewards co-branded credit card that earns less than that?

If a premium or "super-premium" Marriott Rewards co-branded credit card earned 1.5 or 2 points per dollar on unbonused spend, or on easily-manufactured bonused spend, it would begin to look competitive with other cards and combinations of cards already on the market.

Anniversary free nights redeemable at any Marriott property

If a Marriott Rewards co-branded card wants to be taken seriously, it has to get rid of the category limit on anniversary free nights. A natural compromise would be to limit the free night certificate to weekend nights as the Citi Hilton Honors cards do, but in any case the category limitation of Marriott Rewards free night certificates is a pure liability for them at this point.

Gold or Platinum status after a reasonable amount of spend

Any decent co-branded credit card would have to offer at least mid-tier Marriott Rewards Gold status after spending a lot, but not too much, money on the card. Hilton offers top-tier Diamond status for spending $40,000 on its premium co-branded credit cards, and mid-tier Gold status just for carrying them. I understand that Marriott wants to preserve its most valuable elite status for its most valuable customers, but that's not our problem. If it wants people to carry its co-branded credit card, it has to make it worth our while.

Conclusion

To be clear, these aren't three separate suggestions for things Marriott could do to improve their co-branded card lineup. Marriott, Chase, and American Express would have to do all three of these things before I'd consider applying for one of their credit cards.

Who wants to pay an annual fee for a card with inferior earning, an inferior anniversary bonus, and a nominal elite status?