While the most obvious thing to do with Starwood points is use them for hotel stays, I think the most valuable thing to do with them is transfer them to airline miles.
- They transfer 1:1 into most airline programs (indeed, more airline transfer partners than Chase Ultimate Rewards or American Express Membership Rewards)
- You get 5000 bonus miles when you transfer points into 20,000 miles.
When transferred in 20,000 mile increments, you’re getting 1.25 airline miles per Starpoint with most transfer partners. That means a Starwood is worth at least 25% more than any of their airline partners. I consider them worth even more than that given their option value and their reputation as a store of value (they have less of a history of devaluations than most programs, although far from zero).
The downside is that points do not transfer instantly from Starwood to airline partners. In my experience Starwood transfers to American take 3-4 days. Fortunately American still lets you hold awards under most circumstances for 5 days, so you can lock in an award before making the transfer.
American AAdvantage is offering a 20% bonus on transfers from Starwood. The offer was supposed to end but has been extended through August 31. That means 20,000 Starwood points will convert to 30,000 miles through the end of the month.
Offer Extended! Earn more miles toward your next trip with the American Airlines AAdvantage® and Starwood Preferred Guest® programs.
Now through August 31, 2015, convert your Starpoints® to AAdvantage miles and earn a 20% bonus on the amount of AAdvantage miles you receive from the conversion.
American will be adding that extra 20% within 7 days from the time the transfer posts to an American account. That means the extra bonus won’t show up in time to ticket award reservations held prior to making a transfer. So it’s more a play for future award booking, or for awards you’re confident will remain available, rather than one for locking in an award and then transferring.
It’s a way to leverage those Starpoints for Etihad first class awards, for instance.
You never want to transfer more than 60,000 Starpoints to an airline in a day if you can avoid it. That’s because Starwood won’t post more than 79,999 miles to an airline in a day. 60,000 Starpoints posts 75,000 American miles (and then you’ll get 15,000 more American miles later with this promotion). By capping your transfers at 60,000 in a day, you maximize your 5000 mile bonuses for transferring points to miles.
If you want to transfer more than 60,000 Starpoints just split your transfer across multiple days.
I consider Starwood Starpoints the most valuable rewards currency. This transfer bonus is big, and very tempting, but I have too many American miles as it is. They ran it last July and I didn’t take advantage of it then. I’m going to hold onto my Starpoints this time as well.