Starwood and Marriott are merging. What does it mean for your loyalty points?

Starwood's loyalty program is much loved by its members, and many people in the travel world are worried about what this merger might mean for this very popular program.

It's official! After a few weeks of limbo pending approval from China, Starwood and Marriott are officially merging. What remains to be confirmed is how Marriott and Starwood's loyalty programs will be combined. Starwood's loyalty program is much loved by its members -- myself included -- and many people in the travel world are worried about what this merger might mean for this very popular program.

Well, we finally have some clues as to what the future holds for the combined Marriott/Starwood program. One of the cards in my wallet (and my first points-earning credit card ever, actually) is the Starwood Preferred Guest Card from American Express. Among other benefits, this card typically offers 25,000-30,000 Starpoints as a sign up bonus, but as of today, that sign up bonus is now two free nights at any Category 1-5 property in Starwood's catalogue of hotels. Notice something? The points bonus are gone, which likely means the end of Starpoints altogether. I wanted to believe that Marriott would continue to operate the programs separately, but that doesn't seem to be true.

This new sign up bonus is not nearly as flexible or lucrative as the old one. At best, this is worth 32,000 points, as a Category 5 hotel goes for 16,000 points a night in high season, or 12,000 points a night in low season. What's gone is the flexibility of using points across multiple nights in, say, a Category 1 hotel, which starts at 2,000 points per night. Under the old elevated sign up bonus, you could turn that into 15 nights at the Aloft San Jose, Costa Rica! Now you'll have to settle for two nights in the room of your choice, and you can't even pick the top tier hotels in Starwood's program, like Chase's Hyatt card allows you to do.

You'll also lose out on the flexibility to transfer Starpoints to airlines, and the ability to use the points towards a 5th Night Free award reservation. Also, these new "free" nights have an expiration date, unlike Starpoints, which remain valid so long as your account is active and earning points.

So what are those of us with big stores of Starpoints going to do with all of them? This is just a rumor, but this blogger has obtained documentation that alleges the conversion rate between Starwood and Marriott will be 1 Starpoint to 3 Marriott points. Comparing award charts between Starwood and Marriott, this seems fair to me. Lower tier properties on Marriott's chart start at 7,500 points, which, under that conversion rate, comes out to be  2,500 Starpoints, or the average of low and high season redemption rates in Starwood's program.

If we're looking at top tier properties, Category 7 Starwoods go for 30,000 points a night, or 90,000 Marriott points under this theoretical scenario. Marriott's top tiers only go for 45,000 points a night, so that means that you can get two nights for the price of one! However, this assumes award charts are staying the same after the merger, which I can pretty much guarantee won't happen.

This article first appeared in Brad's Deals.