Potential huge win with Marriott Travel Packages before August

Marriott travel packages are awards in which you exchange Marriott Rewards points for airline miles plus a 7 night stay certificate (or a 5 night certificate for timeshare owners).  You do not have to book your actual stay right away.  You have a year to do so, and Marriott Rewards has been very generous about extending the validity of the certificate for another year when asked.  So, many of us will have 7 night certificates in their accounts when Marriott and Starwood merge programs in August.  What will happen to those certificates then?

The Point-Equivalent Hypothesis

Previously, we had been told that all outstanding certificates will be replaced with new certificates that match the number of points that the current certificate is valid for.  For example, Marriott category 1-5 certificates today can be used at hotels that cost up to 25,000 points per night, so we expect those certificates to be replaced with new ones that are good for free nights costing up to 25,000 points per night.  In other words, the new certificates will have point limits rather than category limits.  This view of our certificate future is directly supported by Marriott’s official transition FAQ, with the caveat that this is about credit card free night certificates, not travel package certificates:

I HAVE A FREE NIGHT CERTIFICATE FROM A MARRIOTT REWARDS OR RITZ-CARLTON REWARDS CREDIT CARD. CAN I USE IT AT AN SPG HOTEL (OR VICE VERSA) AFTER AUGUST?

Members may book a redemption reservation with an existing Free Night Certificate under the current terms up until August 2018, even if the arrival date is after August 2018. Starting in August, any outstanding Certificates will be updated from Category-based to points-based values in the new combined redemption chart and may be used for stays at Rewards or SPG hotels up to the points value displayed on your updated Certificate. For example, you will be able to apply a Marriott Rewards Free Night Certificate to an SPG stay, or an SPG Free Night Award to a Marriott Rewards stay. Ritz-Carlton Rewards Free Night Certificates can also be applied to Marriott Rewards and SPG hotels.

To me, this seems like a fair way to deal with all existing certificates, especially since Marriott claims that more hotels will go down in award price than up in the new program.  Plus, it will make all existing certificates more valuable since they’ll be usable at all hotels across the Marriott / SPG / Ritz portfolio that cost that many points or fewer.

The Points-Back Hypothesis

A reliable source of SPG / Marriott info, Starwood Lurker on Flyertalk, threw a wrench in our certificate assumptions when he posted the following on Flyertalk:

Floater certificates, including outstanding Marriott Travel Packages, will be cancelled and converted to equivalent points, credited to the member’s account for future redemption. <added by Starwood Lurker 18May18>

At first, I thought that Starwood Lurker was confused.  The Marriott FAQ that I referenced above can be misinterpreted if you don’t carefully read the whole thing.  Consider the beginning of this sentence: “any outstanding Certificates will be updated from Category-based to points-based values…”  That part does make it sound like you’ll get points back.  But the rest makes it clear that you’ll get a certificate: “… up to the points value displayed on your updated Certificate.”  So, I figured that Starwood Lurker had made a mistake and would amend his statement later.  But he didn’t…

Starwood Lurker posted again on the topic a few days later in response to someone asking how many points would be refunded.  His non-answer clearly tells us that he continued to believe that the certificates would be exchanged for points, but he didn’t know how many points:

“I have a 7-night category 1-5 Marriott certificate from the travel package. Are you saying I will receive 150,000 Marriott points for it, to use for anything I want?”

All I am saying is exactly was was written: Floater certificates, including outstanding Marriott Travel Packages, will be cancelled and converted to equivalent points, credited to the member’s account for future redemption. <added by Starwood Lurker 18May18>

I have no idea what the converted equivalent points will be.

Best regards,

William R. Sanders
Social Media Specialist
Starwood Hotels & Resorts LLC

“…Would love if William could confirm the value of the hotel point value of a travel package when refunded…”

Would love to be able to, but I cannot.

Best regards,

William R. Sanders

The fact that Starwood Lurker has continued to support the idea that certificates will be refunded suggests to me that his original assertion wasn’t a mistake.  He believed it on May 18th and continued to believe it on June 18th.

What the heck are “floater certificates”?

I can’t find a good definition of Marriott / SPG “floater certificates” anywhere.  Previously I figured that floater certificates were all free night certificates that haven’t yet been redeemed for free nights.  But, in the Flyertalk Wiki on this subject, Starwood Lurker makes a distinction between “outstanding awards for certificates” and “floater certificates”.  He maintains that “outstanding awards for certificates” will be converted to new certificates with commensurate value, but “floater certificates” will be converted to points:

C5. How will existing Chase category-5 certificates be handled after the realignment of categories?

• “Starting in August, any outstanding Certificates will be updated from Category-based to points-based values in the new combined redemption chart and may be used for stays at Rewards or SPG hotels up to the points value displayed on your updated Certificate.” (Source: https://members.marriott.com/faq/#i-…a-after-august)
• Existing awards can be attached to any reservation made through July 2018 and are valid for 50 weeks. Any outstanding awards for certificates with a pre-defined category (like Chase or MegaBonus promotional certificates) will be converted to a commensurate value with the new award schedule. Floater certificates will be cancelled and converted to equivalent points, credited to the member’s account for future redemption. <added by Starwood Lurker 19Apr18>

So all we can be really confident of is that “outstanding Marriott Travel Packages” are floater certificates.  My guess is that “outstanding Marriott Travel Packages” are packages that have been purchased, but where the free nights have not yet been booked.

UPDATE 6/21/2018: Starwood Lurker answered my question on Flyertalk as follows:

47. What is the definition of a “floater certificate”?

Examples might include the annual Credit Card certs, Megabonus certs, and unused Travel Package certs. <added by Starwood Lurker 21Jun18>

Wow!  This potentially means that credit card free night certificates will turn into point equivalents as long as they’re in your account by August.  Suddenly I’m even more interested in the Ritz card…

Why this is important

It has long been possible for Marriott Rewards members to cancel their 7 night stay certificates in exchange for points.  Category 1-5 certificates net 45K points.  Higher level certificates net 45K plus the difference in price between that certificate and a category 1-5 certificate.  For example, a category 8 certificate costs 90K more than a category 1-5 certificate, so cancelling a category 8 would get you 45K + 90K = 135K points back.

If Marriott were to unilaterally cancel certificates at the current refund rate, customers would be outraged.  Consider someone planning to use a category 1-5 certificate for 7 nights at a category 5 hotel.  If they instead got only 45K points, they’d only be able to use those points for one night… almost two since current category 5 hotels cost 25K points per night.

To stay whole, a category 1-5 certificate owner would have to get 25K x 7 – 25K for 5th night free = 150K points.

If Marriott is really going to cancel certificates in exchange for points, I think they’d have to keep people whole.  In fact, Marriott execs have consistently stated their goal to keep customers whole, in many different ways, through the transition.  This means that category 1-5 certs would net 150K points, cat 1-6 would net 180K, etc.

That would be amazing

Consider buying a category 1-5 package for 270K points.  Under normal circumstances, that would get you 132K United miles or 120K airline miles of various other types (or less with some others), plus the 7 night certificate.  But if your certificate was refunded for 150K points, then you would really get 132K United miles or 120K other miles for a net cost of only 270K – 150K = 120K Marriott points.

This gets more jaw dropping when we look at this from the point of view of SPG Starpoints which normally transfer to airline miles 1 to 1.25 (20K to 25K).  Since SPG Starpoints convert to Marriott 1 to 3, you would get the following exchange rates after the point refund:

• Net 40K SPG Starpoints = 132K United
• Net 40K SPG Starpoints = 120K other miles (Aeromexico, Air Canada, Alaska Airlines, American Airlines, British Airways, Copa Airlines, Delta Airlines, Frontier Airlines, GOL/Varig, Hawaiian Airlines, Iberia Airlines, Southwest Airlines, Virgin Atlantic)
• Net 40K SPG Starpoints = 85K Aeroflot, Air China, Air France/KLM, Alitalia, ANA, Asia Miles, Asiana Airlines, Avianca-TACA LifeMiles, China Eastern, Emirates, Etihad Airways, Japan Airlines, Jet Airways, Korean Air SKYPASS, LAN, Lufthansa Miles & More, Multiplus, Qantas, Qatar Airways, Saudia Airlines, Singapore Airlines, South African Airways Voyager, TAP Air Portugal, Turkish Airlines
• Net 40K SPG Starpoints = 60K JetBlue

Of course, you can’t cycle the same points over and over since the refund won’t appear until August.  So, it’s probably more accurate to consider what can be done with the refunded points.  We know that in August, 60K rewards points will be transferable to 25K airline miles, so 150K rewards points will be transferable to 60K airline miles (two 60K transfers to 25K miles each, and one 30K transfer to 10K miles).  It follows then that those who prefer airline miles can (theoretically) convert points as follows:

• 90K SPG points = 120K airline miles (see above for other rates) + 7 night cat 1-5 certificate…
• 7 night certificate = 150K rewards points = 60K airline miles
• Total: 90K SPG points = 120K airline miles + 60K airline miles = 180K airline miles (more for United, less for various international airlines and JetBlue).  That’s a terrific, 1 to 2 transfer ratio!

But, I’m not at all confident…

If I was confident that travel package certificates would convert to points as described above, I’d shout on the rooftops for everyone to buy a package now.  In fact, I think it would make sense for anyone who can afford it to buy the needed points during the current 35% off points sale (details here) in order to convert those points to airline miles at an extremely favorable ratio.

My biggest hesitation is with the fact that I don’t understand why Marriott would do this.  If they have the ability to convert one night certificates to points equivalent certificates in the new program, why couldn’t they do the same with travel packages?  If multi-day certificates were the problem, then why not convert them to 7 one-night certificates?  It just doesn’t make sense.

Based on the fact that I had previously been told that the stay certificates would convert to points equivalent certificates, plus the fact that I don’t really know what “floater certificates” are, plus the fact that the whole idea of refunding them for points makes little sense, I wouldn’t bet much on this really happening.  If I had to estimate a probability, I’d say that there’s maybe a 20% chance of it playing out as described above.

The downside of buying now

There are two significant downsides to buying travel packages before August.  One is that you might prefer to conserve your points to book SPG properties that are currently category 7 or higher (off-the-chart properties) when they temporarily go down to 60K rewards points (20K Starpoints) in August.

Another reason not to buy now is that there may be better deals in August.  We have been told that travel packages will still exist and will offer similar value.  We’ve also been told that Marriott’s goal is to offer all airline miles at the same rates.  This could mean that high value airline miles that are currently a bad deal with travel packages will suddenly become a great deal (examples include ANA, Asiana Airlines, Japan Airlines, and Korean Air SKYPASS).

How I’ll Play It

It’s worth keeping in mind that travel packages as they exist today are a great deal if you need the airline miles.  If you have a real need (or good use) for 132K United Airlines miles or 120K Alaska miles, to name two examples, then a travel package can be a great deal even if you have no interest in ever using the stay certificate.

I currently have a 7 night category 8 stay certificate with no immediate plans for how to use it.  If I were to cancel it now, I’d get back 135K points and I’d be fine with that since I really purchased the package for the airline miles.  But, if this plays out the way I described above, the certificate could turn into 240K points in August.  That would be a huge win.  So, obviously I’ll hold onto my certificate to see what happens in August.

The real question for me is whether to buy an additional package.  If I needed airline miles I’d do it, but I’m flush with most miles in quite a few programs.  Plus, I want to use my points to book SPG properties that are currently category 7 or higher when they temporarily go down to 60K rewards points (20K Starpoints) in August.

More Info

More info about Travel Packages:

• Why are Marriott Travel Packages a good deal?
• 12 things you need to know about Marriott Travel Packages

More info about the Marriott SPG Merger:

• Marriott SPG Ritz Transition Guide

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