Ever since my speculations about Starwood Preferred Guest award categories for next year, I’ve been thinking more and more about their award structure and am increasingly bothered by another feature of their redemption program — the exorbitantly high redemption rates for some of their high-end properties that are described as ‘all-sute’ hotels.
Some of their most expensive high-end properties, such as the W Maldives and St. Regis Bora Bora, are all suites. That is part of why they’re as expensive as they are.
In order to get the same value out of a (regular, not all-suite) category 7 hotel award as a category 2 weekend hotel award, the rate for the property is going to need to be about $1000 or more per night. That’s at the standard 30,000 Starpoints for a category 7 hotel, ignoring the high season premium that was suspended for 2009 and 2010. Some of those hotels are that expensive, though not always. Fair enough.
The all-suite hotels that are achieving these rates are placed in category 7 because of their rates. But because properties like the St. Regis Bora Bora and W Maldives are ‘all-suite’ they have no ‘standard rooms’ and thus the price of the award generally doubles (or more..). In other words, the redemption value is cut in half.
Put another way, the all-suite nature of the hotel counts against members twice. First, and quite reasonably, in terms of room rates. The nature of the hotel and its rooms drive the price of the hotel high enough to warrant the high redemption category. That’s how a hotel becomes, say, category 7 in the first place. But then they charge double points for the rooms, even though those rooms are helping drive the rates in the first place.
The Starwood program used to have category 5 as its highest levels, and hotels participated and offered rooms at the category 5 price point. They added a category 6 and also implemented double points charges for all suite properties. Then they added category 7.
I stayed in an overwater bungalow at Bora Bora Nui when it was a Starwood property. I didn’t get in on category 5 pricing when it first opened, I paid the higher all-suite premium for it as category 6… 186,000 points for four nights in a horizon overwater bungalow (additional premium for overwater) with then fifth night free. The property got even more expensive with the introduction of category 7 and all-suites.
But it makes for a nice comparison. While a Starwood point is generally worth about three times as much as a Hilton point (roughly, just currency conversion for similar properties), Starwood is really out of whack at the high-end. Bora Bora Nui has moved over to Hilton, and now runs 170,000 HHonors points for 4 nights. Put a different way, the points value required to redeem for this property dropped by about 2/3rds when it was rebranded a Hilton.
In fact, Starwood’s high-end all suite redemptions are so far out of whack that in many cases it’s much cheaper to pay the least expensive room rate and then redeem Starwood points as an Instant Award for a folio credit at the property. I know this has been done successfully at the W Maldives, for a much better redemption value than claiming an award. Though even this isn’t a good use of the points, since you’re only getting a bit over a penny per point in value back by doing this.
When a Starwood point is worth 3+ cents per night on average redeeming for hotels, it seems crazy to fork over 70,000 – 100,000+ points per night for high-end properties retailing for less than $1000. But Starwood’s newer award categories and double charging on hotels without ‘standard rooms’ has created this imbalance. When they should simply categorize a hotel’s ‘base’ room as ‘standard’.