Everyday, Nick and I are asked about Marriott Travel Packages. What will happen to unused certificates when Marriott and SPG merge programs sometime in August? Which packages are the best to buy? Should we upgrade or downgrade our existing packages before the merger? When is the deadline for buying the packages?
Unfortunately, we don’t know. Marriott has been extremely secretive about what will happen with existing travel package certificates when the programs merge. In my earlier post “Potential huge win with Marriott Travel Packages before August,” I detailed the possibility that the certificates will be converted to the number of points needed to book the same 7 night stay. I quoted a Starwood representative who wrote “Floater certificates, including outstanding Marriott Travel Packages, will be cancelled and converted to equivalent points, credited to the member’s account for future redemption.” That would be awesome, but at the time I estimated the chance of that happening at only 20%. For background on this topic, please read the prior post.
As time has ticked away, I’ve revised my probability estimate upwards. The primary reason that I can think of for Marriott to stay so quiet is that they know they’ll be very generous with the travel package certificates, and they fear that leaking that information will cause a run on the market. Everyone with enough points will buy them.
One of the reasons I had been hesitant to believe the Starwood representative’s statement was that it didn’t make much sense to me. After all, Marriott has already publicly stated that existing free night certificates would be converted into points-based certificates of equivalent value. Why not do that with travel package certificates as well? Let’s play out that scenario and a few others…
Converting current category-based travel package certificates into points-based certificates isn’t as straightforward as it sounds. The following chart shows how I previously tried to map travel packages based on categories from old to new:
As you can see in the above chart, only three types of certificates map one to one to the new program: Category 1-5, Category 7, and Ritz Tier 1-3. In all of those cases, Marriott could replace the certificates with certificates for new categories 4, 5, and 6, respectively. But if they issued point-based certificates for those that don’t map exactly, things get weird…
Consider if a current category 9 certificate were converted to a certificate that can be used at any hotel costing up to 45,000 points per night. Then look at the new award chart (above). There are never any hotels worth 45,000 points per night. At best, you could redeem the certificate for a 35K hotel (until peak and off-peak pricing appears and then you can use it for a 40K hotel).
OK, so Marriott could be generous and give you a points based certificate that matches the next higher category (50K in this example). But then the new travel package certificates would really be category based rather than points based.
And, it makes sense that they’d want to offer category based certificates since that’s what they’re planning to offer for new travel packages bought within the new merged program (see: New Marriott Travel Packages: a first glance)
Ideally Marriott would map old certificates to new certificates in such a way that nobody loses. As discussed above, some are perfect one to one matches:
- Old category 1-5 is the same as new category 1-4 (Good for hotels costing up to 25K points per night, either way)
- Old category 7 is the same as new category 5 (Good for hotels costing up to 35K points per night, either way)
- Old Ritz tier 1-3 is the same as new category 6 (Good for hotels costing up to 50K points per night, either way)
The problem is that several old categories do not match up with the new categories. The current values are in-between new category values. If Marriott wants to keep customers happy (and I think they do), they could bump up the value of their certificates to the next higher level. If they did so, they would map the other categories as follows:
- Old category 6 (worth 30K points per night) would map to new category 5 (35K points per night)
- Old category 8 (worth 40K points per night) would map to new category 6 (50K points per night)
- Old category 9 (worth 45K points per night) would map to new category 6 (50K points per night) or new category 7 (60K points per night)
- Old Ritz Tier 4-5 (worth 70K points per night) would map to new category 8 (85K points per night)
One problem with the above plan is that people who paid more for old category 7, would get the same new package as those who bought old category 6. But Marriott could make the category 7 people happier by refunding the difference in points between old category 6 and 7 packages. That would be a solid but complicated plan.
Category-Based Certificates, Map Higher
Could Marriott be extra-generous and always map to a higher category? If so, it would look like this:
- Old category 1-5 (25K) –> new category 1-5 (35K)
- Old category 6 (30K) –> new category 1-5 (35K)
- Old category 7 (35K) –> new category 6 (50K)
- Old category 8 (40K) –> new category 6 (50K)
- Old category 9 (45K) –> new category 6 (50K)
- Ritz Tier 1-3 (50K) –> new category 7 (60K)
- Ritz Tier 4-5 (70K) –> new category 8 (85K)
This would have the same problem as the previous scenario: in several cases, people who paid different rates would get the same packages. Marriott could fix this in the same way: refund the point differences of the original purchase price.
Point Return Option
The simplest option for Marriott is to exchange existing un-attached travel certificates for the number of points needed in the old program to book the same number of nights. This would mean exchanging 7 night category 1-5 certificates for 150,000 points, category 6 certificates for 180,000 points, etc. This is an extremely generous solution, but it’s also nice and simple.
My new estimate: 60%
By detailing various options Marriott has for dealing with existing un-booked travel certificates, I’ve concluded that exchanging the certificates for points makes a lot of sense. Other options are unnecessarily complicated and/or will piss people off. Merging multiple rewards programs is a huge task. By simplifying this one part of it, Marriott would save themselves and their members lots of aggravation.
It’s possible, of course, that Marriott will return some other number of points than the numbers I suggested. That would be simple too. But if they offered less than the number required today to book a 7 night stay, they’re going to make us mad. They don’t want us mad.
So, there you go. My latest guesstimate is that travel package certificates that haven’t been used to book a stay will be converted to points as follows:
- Category 1-5: 150,000 points
- Category 6: 180,000 points
- Category 7: 210,000 points
- Category 8: 240,000 points
- Category 9: 270,000 points
- Ritz Tier 1-3: 300,000 points
- Ritz Tier 4-5: 420,000 points
Questions answered, 60% guaranteed*
If we take as a given that travel packages will be converted to points as described above, we can answer the common questions we’ve been asked:
- Q: What will happen to unused certificates when Marriott and SPG merge programs sometime in August?
A: They’ll become points!
- Q: Which packages are the best to buy?
A: Always pick from the packages on the right side of the charts (the packages that return the most miles). Then, if the points-return really happens, your net cost will be 120,000 points regardless of which category package you buy now. So, go for the category 1-5 certs so that you’ll have more points on hand for other uses in the meantime. One exception: if you have a specific use in mind, go for a package that maps closest to the category that your hotel will be in after the merger (just in case the point-return option doesn’t happen).
- Q: Should we upgrade or downgrade our existing packages before the merger?
A: Downgrade if that would give you enough points to buy another package. Otherwise, only upgrade or downgrade if you have a specific use in mind where upgrading or downgrading will get you closer to the package you’ll need.
- Q: When is the deadline for buying the packages?
A: My guess is that they’ll stop selling packages on August 1 even if the new program isn’t introduced until later in the month (this guess is unrelated to the other guesses above and doesn’t have the 60% “guarantee”*)
* Despite the guarantee, readers are not entitled to recompense or apologies if/when Greg is proven wrong
More info about Travel Packages:
- Why are Marriott Travel Packages a good deal?
- 12 things you need to know about Marriott Travel Packages
- Which airlines are best for Marriott Travel Packages?
More info about Travel Packages as they relate to the merger:
- Potential huge win with Marriott Travel Packages before August
- Marriott Travel Package Arbitrage
- New Marriott Travel Packages: a first glance
More info about the Marriott SPG Merger: