Convert 80,000 Marriott points into 100,000 Alaska miles (1.3% guaranteed)


In case there was any doubt, let me be clear from the start: 99% of this post is wishful thinking…

Given that Chase is currently offering 80,000 point signup bonuses for both their personal and business Marriott cards, and in light of the news that SPG points are now transferable to Virgin America, I thought it would be fun to play “what if…”

Convert Marriott points to Alaska miles

Step 1: Convert 80,000 Marriott Rewards to 40,000 Starpoints

Now that Marriott’s buyout of Starwood appears to be going forward, some opportunities are likely to arise.  First, I think it is a given that Marriott will merge the Marriott Rewards and SPG programs in the future, or they’ll create a single brand new program.  Either way, I think it’s safe to say that we have at least 18 months before that happens.  In the meantime, Marriott will probably try to find ways to give Marriott Rewards members the ability to book Starwood free nights; and to give SPG members the ability to book Marriott free nights.

One way to accomplish that is to allow members to transfer points back and forth.  This isn’t an unheard of solution.  Delta and Northwest allowed this while they merged.  So did United and Continental.

If Marriott decides to take this approach, they’ll have to pick a transfer ratio.  It’s generally accepted that SPG points are considerably more valuable than Marriott Rewards points, but the exact ratio is debatable.  One could argue that the transfer ratio of SPG to Marriott should be 1 to 1, or 1 to 5, or anything in between.  I’ll go out on a limb and say that I think that a 1 to 2 ratio is likely.  If Marriott allows points to be moved back and forth, I expect 1 SPG point to equal 2 Marriott Rewards points.

Step 2: Convert 40,000 SPG points to 50,000 Virgin Elevate points

Yesterday, Virgin America announced a new partnership with Starwood Preferred Guest (SPG).  Now it is possible to transfer SPG points to Virgin America Elevate at a 1 to 1 ratio.  And, as always with SPG, when you transfer 20,000 points you get 5,000 bonus points.  So, 20,000 SPG points convert to 25,000 Elevate points and 40,000 SPG points convert to 50,000 Elevate points.

Step 3: Wait for 50,000 Virgin Elevate points to convert to 100,000 Alaska Mileage Plan Miles

In the post “How to play the Alaska / Virgin America deal,” I argued that it was likely that Alaska’s buyout of Virgin America would eventually lead to Virgin America Elevate points getting converted to Alaska miles at a 1 to 2 ratio.  My argument was based on two distinct observations:

  1. Transferable points programs transfer to Alaska 1 to 1 and to Virgin America 2 to 1.  In other words, transferable points programs seem to agree that Virgin America points are worth twice as much as Alaska miles.  However, given the new SPG / Virgin America partnership, this argument is no longer valid.
  2. The price to buy Virgin America miles (5.2 cents per point) is almost twice the price to buy Alaska miles (2.75 cents per mile).  This is still true.

The news that SPG points now transfer 1 to 1 to Virgin America severely undermines my suggestion that points will eventually be converted to Alaska 1 to 2.  While the purchase prices of miles still supports the suggestion, I no longer think this scenario is likely.

How likely is each of the above?

Here are my out of the blue guesses of the probabilities of each of the above puzzle pieces:

  • Ability to convert Marriott Rewards to SPG at a 2 to 1 (or better) ratio: 25%
  • Ability to convert SPG to Virgin Elevate as described: 100% (it’s live now!)
  • Eventual conversion of Virgin Elevate points to Alaska miles at a 1 to 2 ratio: 5%

When combined, those guesses lead us to a meager 1.25% chance that the overall conversion will work. Those aren’t good odds, but it’s fun to imagine the possibilities!

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