Starwood Hotels: The Value of a Starwood Point (3/5)

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The following is the third article of a five part series covering points earned for Starwood Preferred Guest (SPG) hotels. The following was written by my brother, an avid travel hacker who has qualified for Platinum Elite Status in the SPG program.

Introduction

FI Fighter has asked me to share some of my Travel Hacking tips for hotels! I have extensive experience with staying in Starwood Properties: AloftElementFour PointsLe MeridienSheratonWestinWSt. Regis, and The Luxury Collection.

I’ll cover the following:

  1. Earning Starwood Points
  2. Redeeming Starwood Points
  3. The Value of a Starwood Point
  4. Starwood Elite Status
  5. My Starwood Strategy

The Value of a Starwood Point

In this article I will go over a typical hotel room booking, and compare the value of a Starwood Point when: redeeming for a Free Night award, Cash+Points award, and Fifth Night Free award. From here on, a Starwood Point will be referred to as a Starpoint.

First, let’s take a look at redeeming a one night stay in Boston.

The cost of staying one night at the Sheraton Boston is either:

  • $259
  • 12,000 Starpoints
  • 6,000 Starpoints + $110

ScreenHunter_25 Jun. 26 20.26Free Night:

The retail price after tax is $296.65

12,000 Starpoints cost $72 to buy (12,000 x $.006).

$296.95 – $72 = $224.65 savings! It’s like receiving an instant 75% discount!

$224.65/12,000 = $.0187 or 1.87 cents per Starpoint.

ScreenHunter_26 Jun. 26 20.26Cash+Points:

The retail price after tax is $296.65

6,000 Starpoints cost $36 to buy (6,000 x $.006).

The cash portion is: $110 + $15.89 (taxes) + $36 (gift cards) =  $161.89

$296.65 – $161.89 = $135.06 savings! Which is 45% off the retail price!

$135.06/6,000 = $.0225 or 2.25 cents per Starpoint.

ScreenHunter_27 Jun. 26 20.26Fifth Night Free:

The retail price after tax is $1,503.87

48,000 Starpoints cost $288 to buy (48,000 x $.006).

$1,503.87 – $288 = $1,215.87 savings! It’s like receiving a 80% discount for staying five nights!

$1,215.87/48,000 = $.0253 or 2.53 cents per Starpoint!

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Which Award Redemption to Choose?

Free Night:

  • Out of pocket cost: $72
  • Cash savings: $224.65
  • Starpoint value: 1.87 cents

Cash+Points:

  • Out of pocket cost: $161.89
  • Cash savings: $135.06
  • Starpoint value: 2.25 cents

Fifth Night Free:

  • Out of pocket cost: $288
  • Cash savings: $1,215.87
  • Starpoint value: 2.53 cents

As you can see, Fifth Night Free awards give you the most cash savings! It also gives you the highest value out of your Starpoints. Therefore, if you have a vacation that is at least 5 nights, then it makes complete sense to redeem your Starpoints for Fifth Night Free awards. You would be maximizing both the cash savings and the value of each Starpoint. This is by far the best award redemption!

What if you need less than 5 nights? If we compare Free Night awards to Cash+Points awards, then Free Night awards would require the least amount cash. On the other hand, if we choose Cash+Points, then we would be getting more value out of each Starpoint (2.25 cents vs 1.87 cents).

How do you decide between Free Night vs. Cash+Points? It really depends on how much money you are able to spend on a hotel night, and how many Starpoints are in your account. If you have a lot of Starpoints, and your travel plans only require a few nights for the year, then it makes sense to redeem for Free Night awards. In the example above, 4 nights in Boston, or any category 5 hotel, would cost $288 and 48,000 Starpoints. If I had a lot of  Starpoints, then I would always book Free Night awards, since my out of pocket cost would be lower than Cash+Point awards.

However, if you don’t have a lot of Starpoints, and your travel plans require a lot of hotel stays, then it makes sense to redeem for Cash+Point awards. For example, if I had 48,000 Starpoints, then I could redeem them for 8 nights at a category 5 hotel. The only downside is that I would be out of pocket  ~$1295. Regardless, I would be getting more nights with the same 48,000 Starpoints, while saving money at the same time. Most of my Starpoint redemptions are from Cash+Points awards, because it allows me to stretch my Starpoints towards more free nights. In most cases, you can expect Cash+Point awards to give you more value per Starpoint than with Free Night awards. It’s very common to get over 2 cents per Starpoint when redeeming for Cash+Point awards.

Platinum Elite Status:

Having Platinum elite status can really increases the value of each Starpoint! By simply booking a room with the lowest standard rate, or with Starpoints, you will be automatically upgraded to the best available room at check-in, including Suites!

For example, here is a picture of a traditional guest room (240 sq.ft.) I reserved at the Sheraton Boston with Cash+Points.

ScreenHunter_27 Jun. 26 20.30And here is a picture of the Junior Suite (480 sq.ft.) I was able to upgrade to, all thanks to being a Platinum member! It’s always nice to have a separate living room to relax in and to stretch out them tired legs!

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Suite Upgrade:

The value of each Starpoint shoots through the roof when you factor in a Suite upgrade for Platinum members.

Let’s use the Cash+Point award example again, but with a Suite upgrade.

$616.89 – $161.89 = $455 savings! That’s a 73% discount for a Suite!

$455/6,000 = $.0758 or 7.58 cents per Starpoint!!!

Obviously, I would never spend $616.89 on a hotel room, but if the hotel upgrades me for free, who am I to say NO!?

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Club Lounge:

But wait, the value of each Starpoint further skyrockets once you factor in the Club Lounge access for Platinum members, which serves breakfast in the morning, and hors d’oeuvres in the evening. The Club Lounge also provides unlimited snacks and beverages (bottled water/coffee/tea/juice/soft drinks) throughout the day, free printing, WiFi, and morning newspaper. What more could you possibly ask for during a hotel stay!??!

It’s only human nature to try to maximize! But, at the end of the day, each person is different, and it’s difficult to put a $$$ for how much a Starpoint is worth. Some people will say 1.8 cents, while others want 3.5 cents. Just do what makes sense for you, and simply enjoy having a nice bed to sleep in every night!

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Living Proof

Living Proof is an avid real estate investor with a strong case of Wanderlust. He enjoys talking about his crazy lifestyle of collecting frequent flyer miles and hotel points. Within the next year, he hopes to declare early FI and to travel the world!

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Starwood Hotels: Earning Starwood Points (1/5)Starwood Hotels: Redeeming Starwood Points (2/5)Starwood Hotels: My Starwood Strategy (5/5)Starwood Hotels: Starwood Elite Status (4/5)Living Proof Recent comment authors
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Mike
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Mike

Awesome post! I’m just now getting into the AA miles cards…it’s a slow roll, but once I rack up those miles I’ll focus on getting hotels points.

Looking forward to the rest of the series!

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