Starwood has announced its category changes for 2013 (.pdf). Each hotel in their program is assigned to a category which determines how many points a free night costs, and each year they re-assign hotels to categories based on the hotel’s projected average daily room rate.
The new categories go into effect March 5. So we don’t have a lot of notice, but there’s enough time to make bookings now for any hotels that are going to be going up in category (and thus up in price). And that includes speculative bookings, since most award reservations are fairly cancellable, just make sure to cancel within the rules of the reservation if you decide to lock in a lower price now but find you aren’t going to use the reservation after all.
And of course once prices go down for some properties, if you have an existing booking you can in most cases adjust to get points back after the categories change March 5.
About 5% of properties are going down in category and about 20% are going up.
That hurts a bit. I do not like it. But it’s roughly in line with what I’ve expected. Hotel occupancy is up, room rates are up, and Starwood’s award categories are explicitly tied to a hotel’s expected room rates in the coming year. They see a continued strong year ahead (there’s some reason to doubt this assessment with respect to the US economy and to Europe, but it’s not many standard deviations off the consensus view).
Most of the top category hotels did not increase. 23 category 5s and 6s drop a category while only 14 current category 5s and 6s go up a category. The inflation is decidedly not at the high end. There are very few cheap points redemptions out there, but the top end expensive properties aren’t being pushed further out of reach for most redemptions.
It’s especially important for the best properties to stay out of category 6 and 7, because many of those hotels draw really high room rates because of their special accommodations such as being all-suites. But once a hotel is all suites in the top two categories, Starwood charges double points for the room you get being a suite. The member gets penalized twice for the same thing — high room rate because it’s a suite, which makes it a top redemption category, and then double the points of that category because it’s a suite. That’s probably my biggest pet peeve of the Starwood program.
The ultra-expensive category 6 and 7 double points properties are the reason that — even after Hilton’s big devaluation — HHonors remains a better program for a handful of aspirational redemptions like Conrad Koh Samui, the Conrad in the Maldives, and Bora Bora Nui.
None of which helps folks going to Hawaii or dreaming of Santorini those hotels have gotten more expensive. But compared to what we’ve seen from Hilton and Wyndham and Priority Club in the past two months this is nothing.
Finally, I found it interesting that the Parker Meridien Palm Springs is going up in category. I wonder if this factors the allegations that that hotel was cooking the books to increase the reimbursements they’d get out of Starwood for award redemptions?