Starwood hugely devalues cash & points redemptions starting March 5, 2013!

Starwood has just announced that they’ll be updating their cash & points redemption chart starting March 5,2013!

Here’s their new cash & points chart as of March 5:

And as a point of reference here’s their current cash & points chart:

Basically it seems to be an across the board devaluation of roughly 20-25% in both cash and points. The one exception is category seven properties, as cash & points only became available at those properties mid last year, and I find those redemptions to be disproportionately expensive as it is.

This is definitely a big disappointment, though Starwood is claiming they’re doing this in part to expand cash & points availability. While award redemptions on points aren’t capacity controlled, cash & points redemptions are heavily capacity controlled. So if they actually do expand availability this might not be horrible.

Compared to actually only using points for a free night redemption, cash & points is still a better value, but not by that much before. For reference here’s the free nights award redemption chart:

So with these changes it still makes sense to redeem for cash & points since you’d be getting less than two cents of value per Starpoint spent if you chose to do a free night redemption over a cash & points redemption. That being said, the new rates are approaching the “breakeven” cost of a free night redemption vs. cash & points, so I really do hope this translates to a lot more cash & points availability.

Along with this change they’re also adding cash & points redemptions at all category one and two properties worldwide, while they were previously limited to certain regions. Lastly, they’re allowing premium room and suite redemtions using cash & points. I can’t say either of those options interest me especially, though I guess it’s a nice option for some to have.

On the whole this is a devaluation and a disappointing change, though I really don’t think we can blame Starwood, given for how long they kept rates the same.

Anyway, we still have about six weeks to book stays at the old levels, so I’m definitely going to be doing some speculative bookings and advance planning for my travels later this year.

Comments

  1. Michael H. says

    I agree about it being a devaluation but disagree that we can’t blame them. I don’t think it is unreasonable to expect rates to stay static. Star points are not getting any easier to accrue over the years and I don’t see that room rates are increasing much year to year. Therefore points should not devalue much over time.

  2. lucky says

    @ Michael — While points might not be easier to earn, there’s no doubt that there are more and more points in circulation each year, which could reasonably cause a devaluation.

  3. Nick says

    I think this is a huge devaluation as well, and requires a big rethink on how we value Starwood points. The best value is now just the 5th night free in regular points. Which means we have to compare to Marriott & Hilton which gives you a bunch more points while earning. I may well cancel my SPG Amex.

    The C&P was a huge value to the budget conscious traveler in the off season or shoulder season, now I feel this option is no longer there. Its better value to just look for paid options which should be there because of lower occupancy.

  4. AC says

    I think it discourages my willing to maintain my Platinum status to do mattress runs. Since we only do a big trip once or twice an year so I find it very valuable to do mattress runs on the cat 2/3 hotels with C&P to maintain my status. But with 25% increase in points and cash, I rather save the money on mattress runs and spend these mattress runs money with points for suits upgrade. I can also get a Gold status through Amex Platinum anyway.

  5. Christian says

    Remember that hotels don’t think just in terms of ADR but revenue per available room (RevPAR). So if brand wide, Starwood improves 3% in ADR over the previous year but improves their occupancy by 4% as well, they are looking at a RevPAR gain of 12%. As occupancies for the brand increase following the recession, they have less need to build brand loyalty because more people are willing and able to pay. Therefore, they can afford to devalue their points until the next recession. The only brands that would inhance their programs in a growth period are new brands or existing brands in fiscal distress looking to survive short term.

  6. ikonos says

    Inflation argument only comes in to picture if the revenue rates are going up by about the same measure.

  7. Christian says

    If 3 years ago the brand was doing 60% occupancy, that means they have 40% of their rooms they are willing to discount/give away/open up to points. If today the brand is doing 70% occupancy, then that means they only have 30% of their rooms available for their rewards program. 10%/40% available rooms means they have 25% fewer rooms to allow for points redemption.

  8. hobo13 says

    I actually think this is horrible too….. but I thought Delta yesterday was horrible, so what do I know? I’m worried about 5pm today– United won’t want to let Delta, Priority Club, and Starwood win the bad news category for the week!

  9. Dreamworks says

    I’m in the camp that this is a necessary evil if it greatly expands the availability of C&P. Again, Cash and Points is such a wonderful perk and its my go-to. I imagine people who only book stays with Cash and Points are not going to be happy.

  10. Raymond says

    To be very honest, with the huge change of the SPG program last year, most hotels don’t even offer cash & points. E.g. I looked up all Hong Kong properties and they definitely don’t offer it at all. But it is said that we need to pay more in points and cash all together. What is even more ridiculous is the fact that Asian properties convert the USD in their exchange currency, and then your credit card will convert it from their currency back to USD. This applies to cash and points reservation. I noticed that I paid around 10 – 15 % more.

  11. Andy says

    really horrible! i always thought that cash & points redemption nights are the most economical. given this new change, going forward, i will not book any reward stays at starwood.

    fortunately, they do not devalue their transfer rate into airline mileages, do they? I will convert starwood points into airline mileage to fly instead of booking any cash & points stays.

    my strategy is: i will book reward stays with marriott because marriott frequently offers “1 free night after 2 stays” promotion and has 3,600 hotels worldwide. i will use starwood points exclusively for flights. any better strategy? please advise.

  12. Jr says

    If you stay 5 nights at a same hotel it makes now more spence to use all free stay… (5th night free)

  13. Carl says

    i would be reluctant to lump Starwood’s inflation with this. While Starwood basically increased their C&P by 25%, they also added some suite enhancements, will supposedly increase C&P inventory, and they still have some phenomenal Category 2 values out there, especially in SE Asia.

  14. Linda says

    Almost All of their hotels were also moved up a category. So it is a much bigger devaluation than 25 percent, more like 50 percent. Every category 2 I have ever stayed at is not a category 3. So instead of 3-4000 points they are 7000. Probably going to end my dance with starwood points.

  15. martin says

    I had been accumulating points for the last few years getting ready for the big trip to Europe. I booked a three week trip (rooms only) for four of us. We booked 2 rooms at each hotel. the rooms were all 25k to 30k per night. We spent over 1mm points. Had I paid attention, I could have saved?? Two years ago, we stayed several nights in a very nice hotel in San Diego at the total was 55k Yeah, I’m frustrated.

    I’m not a big traveler due to a busy schedule. Is there an alternative CCard program that may be better?

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