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’.
Agreed. I wrote to the head of SPG about this awhile back and never heard back. (That’s really disappointing given how much credit I usually give for SPG.)
These rates really take away from the aspirational aspect of the SPG program.
Thanks for doing the math, here. It’s a bad situation. Probably worth paying with cash for those places, and using the SPG miles for what they’re best used for 🙂
Really good argument here, hit the nail on the head. Starwood is not competitive when it comes to redemptions at the best properties in the program. Though they splash these properties all over their promotional materials, redeeming SPG points for them doesn’t make sense.
I also wrote about the high points requirement for Starwood’s category 7 hotels last January.
The redemption value for 480,000 points on a 5-night stay at St. Regis Bora Bora is quite poor compared to $5,000 paid rate.
http://boardingarea.com/loyaltytraveler/2010/01/31/starwood-preferred-guest-uber-category-hotels/
And the 4-night HH award can be had for only 145,000 HH points with an AMEX AXON award. To be fair, however, I don’t believe that an award stay at the Hilton Bora Bora Nui gets you an OWB.
It’s obviously not a huge problem for most SPG members (plenty of other nice places to use points at), but it is wrong. Good to know about the Hilton option in Bora Bora. Too bad the airlines also make award travel to Tahiti unattractive!
Can you explain this sentence please, I dont quite get what you mean by it.
“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 than then redeem Starwood points as an Instant Award for a folio credit at the property.”
I actually successfully redeemed 60,000 points per night for 3 nights for the pool suite at St. Regis Bali. While it seems insane to redeem 180,000 points for just 3 nights, i don’t have to pay almost $4,000 out of pocket, and that can be saved for other things, like meals. And all the starwood points are just sitting there burning a hole in my pocket.
Gary, I’m about to go to Bora Bora in mid-December and the St. Regis wanted 140,000 per night. Who would ever redeem at that rate?
What is happening to Starwood? They used to be the #1 hotel program, but they’ve been devaluing their points significantly over the years… If they do not decrease more hotel categories than they increase, I am thinking of switching over to Hyatt as my primary hotel program. They seem more generous. What do you think, Gary?
Funny, I was thinking about that too while looking at the new W Koh Samui.
Starwood clearly doesn’t want SPG members to redeem their points on the high end properties.
Gary
This is just another reason why I am a huge fan of this blog.Great case in point about premium SPG property redemptions.Its a miracle there is any value left in the program when redeeming in any category
Just as you state “out of whack”
There was a day when SPG was the only hotel loyalty program you needed (circa 1999)One could reedem at the St Regis in New York even on free weekend nights!
now I need at least three or make that 4 major programs to get a fair enough value!
Still a big fan of SPG despite some issues here or there
@Ben that’s probably the property that prompted me most to be frustrated, I saw $450 rates there but it’s category 6 all-suites, I mean 40k points per night.. seriously?
…. seriously you guys should read what you write, 186000 starwood pts for 5 nights! 170000 HH pts for only 4 nights in a hotel that is way below the St Regis when it comes to quality… so one night more for just 16000 pts i dont find it outrageous… in another hand, you dont want to pay and use points for a high end hotel… it is part of game to try to have people booking on cash more than points… starwood uses different rates on points for the different types of units… which is logic.. In another hand, you are comparing a 3900 hotels portfolio (hilton) with a 1100 hotels (starwoods)portfolio with such a difference between the low and high end that it makes this whole article sort of useless and totally not accurate,(would you compare England with Sudan and complain that Sudan has, lets say, no roads…??) if yes then no points in going any further… i worked for wyndham, hilton and marriott and so far starwood provides a far better service than those 3 combined… a last thing, those “high-end” hotels are made for a certain type of customers.. im not willing to be rude, but if you do not have money… dont expect to have the moon for free!
one last thing, your way of giving a value to the points is hilarious, it is totally wrong as is not based on the highest rate but the one you just saw the day you booked (surely the best available rate or the prepaid) – before you go on a rant, make sure your side is clean!
Well said Sam. 🙂