Marriott’s New Terms and Conditions Leaked

By

-

August 13, 2018

As a reader of PointsNerd, you are probably well aware of our love and activity within the Marriott Rewards Program. If you’ve been keeping up to date with what’s happening, you’ll know that as of August 18th, the SPG program will cease to exist in its entirety and be replaced with a new Marriott Rewards Program.

Well, over the weekend, a Marriott Insider posted the new Terms and Conditions of the new Marriott Rewards program and we here at PointsNerd have read through the tedium of the legalese to distill down some of the more interesting points.

If you are so inclined to read the Terms and Conditions yourself, you can find a copy here.

No Free Reservations Holds at Old SPG Properties

One of the best benefits of the Marriott program is the ability to hold reservations without points in your account, something that Jayce covered in depth in a previous post. We were all expecting that once SPG properties became amalgamated with Marriott, you would be able to make speculative bookings but, alas, this is not to be.

3.6 Points Advance.
Members who seek to make an Award Redemption with an insufficient Point balance may make the Award Redemption and either (1) purchase Points (as described in Section 2.9) to make a valid Award Redemption, provided that the aggregate amount of Points purchased and/or received as a gift by the Member is less than or equivalent to 50,000 Points per calendar year; or (2) the Member accrues sufficient Points to use Points for payment of the Award Redemption no less than fourteen (14) days prior to Member’s arrival date.

3.6(a). If a purchase of Points is not an option, or if a Member does not have sufficient Points to pay for an Award Redemption with Points fourteen (14) days or less from Member’s arrival date, Member will forfeit any Award Redemption. The Award Redemption may be canceled by the Loyalty Program or the Participating Property without prior notice. The Member must re-book the reservation at the best available rate for which the Member qualifies.

3.6(b). Points Advance is not currently offered at the Participating Properties or Brands listed here:

St. Regis

The Luxury Collection®

W®

Sheraton®

Le Méridien®

Westin®\

Design HotelsTM

Tribute Portfolio®

Four Points

Aloft® Hotels

Element®

Non-branded properties listed in Section 1.2.a.

This is an obvious letdown with the new program as many of us wanted to make speculative bookings after August 18th. I know that many folks were hoping to book things like the W Maldives but according to the new Terms and Conditions, you will only be able to do so if you have the points in your account.

Use of Suite Night Awards

Suite Night Awards are something new in the Marriott Rewards program that was brought forward from the SPG program. This is a benefit conveyed when you reach the Platinum Elite Level (50-74 nights) and beyond.

While this benefit seems like a great way to guarantee a suite for a family vacation, the execution is pretty bad and if the SPG program is any indication, it’ll be a benefit that doesn’t amount to much with many hotels “not having suites available” during the time you want.

Additionally, you are required to use a Suite Night Award certificate for each night of your stay.

4.3.c. Platinum Elite Membership Benefits. In addition to all of the benefits Gold Elite Members receive, Platinum Elite Members and above are eligible to receive the following benefits:

…

vi. Annual Choice Benefit. A Platinum Elite Member who has achieved fifty (50) eligible Elite Night Credits annually is eligible to receive one (1) additional benefit from the list of available benefits listed below:

Platinum Elite Annual Choice Benefit Options:

Five (5) Suite Night Awards

40% off bed

$100 Charity Donation

The gift of Silver Elite status for a friend or family member

Five (5) Elite Night Credit
The list of Annual Choice Benefits is subject to change at any time. Once a Platinum Elite Member becomes eligible to receive the Annual Choice Benefit, he/she must choose his/her Annual Choice Benefit by visiting the following sites: for Marriott Rewards, for Starwood Preferred Guest, for The Ritz-Carlton Rewards, and selecting one of the Annual Choice Benefits. A selection must be made through one of the above methods and may not be made through a Customer Engagement Center. All Annual Choice Benefit selections are final and may not be changed after they are made. In the event that an eligible Platinum Elite Member fails to select an Annual Choice Benefit by January 14th of the year following the applicable Qualifying Period, the Member will receive five (5) Suite Night Awards™ as his/her Annual Choice Benefit (“Suite Night Awards,” individually “Suite Night Award”).

A. Suite Night Awards may be redeemed for advance confirmable upgrades for select, premium rooms or standard suites on a per room, per night basis, subject to availability and the applicable terms and conditions set forth below for Suite Night Awards:

(1) Suite Night Awards may be used only on Loyalty Program eligible paid stays as well as Free Night Award stays and Cash & Points stays.

(2) A Member may request to use their Suite Night Awards on Loyalty Program websites or by calling a Customer Engagement Center.

(3) Suite Night Awards may only be used for standard suites or other premium rooms as designated by the Participating Property.

(4) Suite Night Award use is based upon availability of the requested suite or premium room. Checking for availability begins five (5) days before arrival. If availability is not confirmed five (5) days before arrival, availability is checked each day before arrival up to 2 p.m. local time of the Participating Property one (1) day prior to arrival. If at that time Suite Night Awards cannot be confirmed, the Suite Night Awards are credited back to the Member’s account.

(5) Suite Night Awards may be used only when there are enough in the Member’s account so that one is applied to every night of the reservation.

(6) One Suite Night Award is required per room per night.

(7) Suite Night Awards are required for each night of the stay including any nights that may be designated “free” such as the fifth night in a Fifth Night Free Award.

(8) Suite Night Awards may not be transferred or given as a gift; however, a Member may use Suite Night Awards for additional rooms on his/her own stay as long as the Member is present for the stay and the other rooms are under the Member’s name.

(9) Members who book separate reservations for consecutive nights that precede or follow a reservation that has confirmed Suite Night Awards will be required to change rooms to the confirmed room type on any night(s) where a Suite Night Award is not used.

(10) If a Participating Property offers multiple room options for the Suite Night Award, once the suite/premium room option(s) is selected, the selection may be changed until 2 p.m. local time of the Participating Property the day before arrival so long as the Suite Night Award is unconfirmed. Confirmed Suite Night Awards may be canceled up to 2 p.m. local time of the Participating Property one (1) day prior to arrival only if the entire reservation is canceled.

(11) Suite Night Awards have requesting, booking, cancellation, and modification policies that are in addition to – but completely separate from – the booking, cancellation, and modification policies for the reservations on which they are used.

(a) Requests to use Suite Night Awards on a reservation may be made up to 2 p.m. local time of the Participating Property one (1) day prior to arrival.
(b) Requests to withdraw the use of unconfirmed Suite Night Awards may be made up to 2 p.m. local time of the Participating Property one (1) day prior to arrival.
(c) Confirmed Suite Night Awards may be canceled up to 2 p.m. local time of the Participating Property one (1) day prior to arrival only if the entire reservation is canceled.
(d) Once Suite Night Awards have been confirmed, the Member must cancel the entire reservation to receive credit back for all Suite Night Awards. Cancellation of a confirmed Suite Night Award reservation after 2 p.m. local time of the Participating Property one (1) day prior to arrival will result in the forfeiture of all Suite Night Awards applied to the entire reservation.
(e) Suite Night Awards cannot be applied to a reservation once the reservation has been checked-in to a Participating Property.
(f) If a Member departs his/her reservation early, any unused Suite Night Awards confirmed for the stay will be forfeited.
(g) If a Member extends his/her reservation and has enough Suite Night Awards to cover the extension, the Member may use his/her Suite Night Awards based upon availability and at the Participating Property’s discretion.

(12) Not all Participating Properties participate in Suite Night Awards. Suite Night Awards are not redeemable at the following brands: The Ritz-Carlton, Protea Hotels, Aloft, Element, Design HotelsTM, all-Suite Hotels, Marriott Executive Apartments, ExecuStay, Marriott Vacation Club, Marriott Grand Residence Club properties and participating Vistana properties. In addition, Suite Night Awards are not redeemable at select Participating Properties. Contact a Customer Engagement Center for individual Participating Property Suite Night Award participation.

To me, this “benefit” is not a very strong one given that suites cannot be guaranteed more than 5 days before the stay and each certificate is only good for one night. Also, look at the HUGE list of hotel brands that Suite Night Awards are not applicable at. I personally believe that if Marriott wishes to adopt this benefit, they should take on the same policy as Hyatt whereby each suite upgrade is eligible for use for up to 7 nights.

Breakfast at Resorts

Let’s see if this fully comes to fruition but it looks like breakfast will now be included as a Welcome Gift to Platinum Elite Members and higher for resorts in the US, Canada and Europe.

4.3.c (iii) – Platinum Benefits …

RESORTS only:

United States, Canada, Europe: 1,000 Points per stay or breakfast in restaurant per day of stay for Member +1

Lounge Access

One of the bigger questions around the new program was whether or not Platinum Members and above would have access to things like the Ritz Carlton Lounges. Bad news. The answer is no.

4.3.c (iv)

Guaranteed Concierge/Executive/Club/Signature Club Lounge Access for Members plus one guest at JW Marriott, Marriott Hotels, Sheraton, Delta Hotels, Le Méridien, Westin, Autograph Collection, Renaissance Hotels, and Courtyard (outside the United States and Canada) during normal hours of operations. Additional charges may apply for lounge access guest count greater than the Member plus one allowance (including children). Lounge offers light snacks and daily continental breakfast. Lounge Access is not offered at the following brands: The Ritz-Carlton, St. Regis, EDITION, The Luxury Collection, W Hotels, Design Hotels, Tribute Portfolio, Gaylord Hotels, Four Points, SpringHill Suites, Protea Hotels, Fairfield, AC Hotels, Aloft, Moxy Hotels, Residence Inn, TownePlace Suites, Element, Marriott Vacation Club, Marriott Grand Residence Club, and participating Vistana properties. This benefit only applies to the one (1) guest room in which the Platinum Elite Member is staying.

So no lounge access at the Ritz nor at St. Regis properties, Luxury Collection, W Hotels, Design Hotels, Tribute Hotels and Gaylord Hotels. A lot of aspirational properties fall within these brands so it’s obviously disappointing to see such a wide range of exclusions.

They also call out that children are included in the count of guests, which is certainly disappointing for those that have a young family.

Conclusion

While there are a lot of good things about the new program, there are certainly some negatives, most of which I have highlighted in this post. For the most part, I am still pretty happy with the transition and I’m looking forward to what the new Platinum status means for me and my family.

If you happen to read the terms and conditions, I would love to hear about anything I may have missed in my initial review of the terms.

Where Have You Been?

By

Brian

-

August 13, 2018

2

We’ve been inundated with PointsNerd readers wondering where are posts have gone. The answer is simple, I’ve been sick as a dog but I’m on the mend now so I’m hoping to get back to regular posts but be warned … I’m going on vacation soon and it’s a cruise no less, so expect about a week or so without posts.

Thanks for checking in and letting us know you care!

Well That Was Fast – Air Canada to Buy Aeroplan?

By

Brian

-

July 25, 2018

6

So basically 5 days after AIMIA comes out with their new vision for the Aeroplan program, Air Canada, CIBC, TD, and Visa, make a bid to purchase Aeroplan for $2.25B. In the bid, the consortium has offered $250MM in cash as well as taking over the $2B liability that AIMIA holds in Aeroplan miles.

So what does this mean?

We don’t know for sure just quite yet but let’s try to break down what we do know.

Why Is This Happening?

I think the simple answer here is that all the players involved see value in a loyalty program with 5MM members and 34 years of analytical data on Canadian travel and purchasing habits. The value of this information is immense and not something that can easily be replicated with a new loyalty program. Essentially, it makes much more sense for the consortium to purchase this asset than try to build it from the ground up.

While this is speculation, I have spoken to highly placed sources in one of the Big 5 banks that suggested that Air Canada was having a difficult time standing up their new loyalty program, leaving significant uncertainty as to whether or not the program would be ready for June 2020. If you look back to the Investor Call in September of 2017, AC announced that they would be issuing an RFP to find a new financial partner. 10 months later and they have yet to announce a winner in that RFP which suggested that AC may have stumbled out of the gate.

A Depressed Stock

Hey … remember when Air Canada announced that they would be parting ways with AIMIA as of June 2020? How did that stock fare? Oh not so well, at least if you understand how numbers work.

The stock plummeted almost 63% in a single day. That’s Black Tuesday type numbers, folks. It was BAD.

With the stock price severely depressed and AIMIA struggling to meet its financial obligations as it related to the outstanding Aeroplan Miles, it’s kind of the perfect opportunity for the consortium to make a lowball offer for this incredible collection of data.

8 Day Window

The consortium has given AIMIA until August 2nd to mull over this offer and respond to the bid. Currently, there are two major investment firms that hold a significant interest in AIMIA stocks, Mittleman Investment Management with about a 20% share of the company, and Burgundy Asset Management Ltd. with a 12.5% stake.

Both firms will have a very prominent role in deciding whether or not the AC consortium has made a fair offer for the company.

So What Happens?

I can’t profess to know what will ultimately happen but here’s what I would expect to happen. I suspect that AIMIA will counter with a higher purchase and the consortium will ultimately respond by increasing their bid. In the end, the AC consortium will purchase the Aeroplan program from AIMIA.

The Winners

The winners in this are, of course, the consortium led by Air Canada. One could argue that the Canadian consumer and participants in the Aeroplan program would also win in this deal but that is still yet to be seen. We have no idea what Air Canada intends to do with the program and whether or not there will be a large devaluation of your Aeroplan Miles.

The Losers

There are two losers in this deal, one you already know and one that you probably aren’t thinking of. The obvious loser in all of this is AIMIA, a company that became too wholly dependant on one single customer, Air Canada, and had the rug pulled out from under them. AIMIA’s stock price has become incredibly depressed (prior to the bid by the AC consortium) and many Canadians have become disenfranchised with the program.

The other loser in all of this is ….

American Express.

Remember what companies make up this consortium. Air Canada, TD, CIBC, and VISA. If this deal goes through, American Express faces a HUGE problem. There is absolutely no way that Visa puts up this much money just to have American Express continue to be a payment processor of any of co-brand Aeroplan credit cards.

Again, this is pure speculation but I would also suspect that American Express will no longer be a transfer partner of Aeroplan or whatever the new program ends up being called. There is simply no incentive for Visa to allow for this.

In one fell swoop, Visa has all but eliminated one of the major benefits (Membership Rewards transfers to Aeroplan Miles) of one of its strongest competitors, American Express. This puzzle piece fits perfectly with American Express’ announcement in mid-May that saw them extend their contract with AIMIA to take them to June 29th, 2020.

For holders of American Express products that earn Membership Rewards, this leaves a lot of questions unanswered, the biggest of which is “if I can’t transfer my Membership Rewards to Aeroplan, is the program worth continuing with?”

Conclusion

There are still a lot of questions in the air as to what happens to Aeroplan so understanding whether this is a good or bad thing is still to be determined. Just a few days ago, I covered off Jeremy Rabe’s vision for Aeroplan beyond Air Canada. I was excited about the possibilities but had some reservations. Now that this announcement is out there, it puts everything into question.

The Future of Aeroplan

By

Brian

-

July 22, 2018

8

AIMIA, the parent company of Aeroplan has come out with a new interview with CEO, Jeremy Rabe where much of the future of the program is laid out. At first blush, the program sounds fantastic … maybe a little too fantastic?

Over the course of 7:40, many things are defined on how Aeroplan plans on moving forward without Air Canada as it’s major airline partner. You can watch the entire interview here or you can follow along as we break down each feature of the program and our take on it as well as our score on the likelihood of it coming to fruition.

We’re going to skip over the marketing fluff like how the program will make you feel and how excited you will be and rather focus on what’s important to you as an Aeroplan member.

Aeroplan Redemptions

When you hear things like “redemptions wherever you want and whenever you want”, you need to take it with a grain of salt.

We don’t get a lot of detail in this response but Aeroplan seems to indicate that at least part of the new program will feature a fixed-value redemption. Other programs that have this feature include the WestJet Rewards program as well as JetBlue’s Mosaic. In these types of programs, points are valued at a certain dollar value and the number of points required to redeem are based on the actual cost of the ticket. For example, in the WestJet Rewards program, a WestJet Dollar (WSD) is worth $1 and can be used against the base price of any WestJet flight. That flight could be on sale or it could be expensive. The point is you have access to the entire inventory but your WSD is worth $1. No more, no less.

Rabe further clarifies this point by stating that you will be able to use Aeroplan miles on “any airline, any time, anywhere, and for any seat on the plane”.

What we like about this feature is that you are not bound by the distressed inventory that airlines make available for award flights. The downside? Don’t expect to fly Business/First class tickets for cheap.

Fixed value redemptions make a lot of sense for loyalty programs, both from an ease of use perspective as well as a “responsible to the bottom line” perspective. I have no doubt that the new Aeroplan program will incorporate this feature.

Likelihood: 10/10

Points Transfer Program

Okay. Wow. Did I hear that right?

Aeroplan is planning on providing its users the ability to transfer Aeroplan Miles to 20 different airline partners for use within their own loyalty programs. As a point of comparison, there are two notable transferable points programs in Canada, American Express’ Membership Rewards and the Starwood Preferred Guest (SPG) program. SPG will cease to exist in August but they were by far the most powerful transfer program featuring 36 airline transfer partners. AMEX came in second by with only 5 airline transfer partners, it could never hold a candle to SPG’s flexibility.

Aeroplan is making an audacious move and claiming that they will have “up to” 20 airline partners.

One obvious question is what will the transfer ratios be but the fact that there is that level of flexibility in the program is a HUGE plus.

Likelihood: 8/10

I have some doubts as to whether or not Aeroplan will be able to secure transfer relationships with 20 different airlines given that there are 27 airlines in the Star Alliance and I’m sure Air Canada might have something to say to the Star Alliance members that engage in a relationship that would ultimately hurt Air Canada’s new loyalty program.

To me, the number of airlines seems very high but the transfer ratios are the biggest question mark in my mind. If you have 20 airline partners but deliver poor value in the transfer, do you really have 20 airline partners?

A Wide Variety of Rewards

Ultimately having access to more rewards is a good thing because what may resonate with you as a user of a loyalty program may not resonate with others. By having a wide variety of rewards, you keep your users engaged within the program, which in turn helps the retail partners of the program.

What piqued my interest is when Rabe mentions the private jet in the video. I’m sure a lot of you would like to have these types of unique experiences but I’m sure they will cost an arm and a leg.

Programs that offer these types of rewards typically do them at low/no risk. Much like Amazon doesn’t actually stock this $230K Patek Phillipe watch in hopes that someone buys it, Aeroplan would likely not be on the hook for merchandise or experiences unless someone actually redeems Aeroplan Miles for it.

Likelihood: 10/10

I have no doubts that Aeroplan will be able to secure merchandise from their retail coallition partners to make this a reality. The only question in my mind is the value you will get from your miles and whether or not they can put together aspirational packages to get people to spend their miles.

Redemption Levels

Here’s where things get really interesting. Rabe is now on record for saying that redemption levels will be similar to what we have with Aeroplan currently.

Similar? Didn’t he just quote all the same number of miles for redemptions to North America, Mexico and the Carribean, Europe, and Asia?

Well yes. But then you hear the escape phrase that he snuck in there … “starting at”. If you notice the graphics, the redemption rates state “beginning at”.

We don’t know what will ultimately happen to the redemption rates but I always think the worst when I hear things like “limited time” or “free (for the first 2 people) ice cream”. I want to give Aeroplan the benefit of the doubt when it comes to redemption levels but I’ll be honest, I don’t expect great saver level award availability.

Likelihood of redemptions staying the same: 3/10

Likelihood of redemptions “starting at”: 10/10

Charter Flights?

This is what I would deem as a bold move on Aeroplan’s part. It could turn out to be a very shrewd move or it could turn out to be disastrous.

Essentially what Aeroplan is proposing is to use its analytical data to determine which routes are the most likely to sell out an entire plane if offered up for award. I’m unsure of the economics around what it costs to charter an entire plane but one would hope that Aeroplan would be able to stay in the black on the redemption.

Given that AIMIA has been collecting air travel data on Canadians since 1984, I would imagine their knowledge of route popularity is unparalleled. I would expect AIMIA to offer charter flights on routes they know will 100% sell out. Think Vancouver to Toronto (almost all the time) or Vancouver to Honolulu during winter.

Likelihood: 8/10

Partial Redemptions

Partial redemptions offer extreme flexibility in redemptions because you don’t have to wait until you have all your miles before you redeem. Hotels have been in this game for a while with the Points + Cash redemption option. WestJet has famously allowed for partial redemptions for a long time as well.

Keep in mind that this type of redemption is likely to belong in the Fixed Value Redemption world rather than the regular point redemptions that we have been used to in the current Aeroplan program. Don’t expect huge value here but expect great flexibility.

Likelihood: 10/10

Conclusion

Everything that AIMIA and Aeroplan are suggesting seems like things that they can definitely deliver on. While the concept is excellent, the delivery is how we will ultimately judge the success of the program.

I for one am excited about what this new program will deliver to Canadians and I am certainly not as down on the program as I was a few days ago.