I Redeemed Starpoints For A $3,000/Night Hotel Room

In the miles & points world we love to put a value to our points redemptions. However, we don’t all take the same approach in coming up with those valuations.

Some people like to claim that their points redemption is worth whatever that experience would have cost in cash. So if you have a lot of miles & points friends, chances are you’ve seen them post a picture of a first class seat on Facebook and say “my $26,000 first class seat, but I got it for free with points,” or something.

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That’s technically not inaccurate, though also not how I approach points redemptions — I don’t think that seat is worth $26,000, and I also don’t think miles are “free.” Travis wrote a post a while back about how he goes about valuing points, which I agree with:

The value of a point is between your acquisition cost and the redemption value you can get. And if you’re like Travis and me, that “redemption value” isn’t generally the retail cost of the experience we’re redeeming for, but rather what we’d otherwise be willing to pay for it in cash.

All of that is simply to say that below I’m not making the claim that I redeemed Starpoints for a value of over nine cents each. Rather I just want to point out that I redeemed my Starpoints for the highest ever “cent per point” value compared to the retail cost.

I’m in South Florida at the moment, and just getting to the W South Beach for a short stay. I redeemed points to stay here a while back, and felt bad parting with 35,000 Starpoints per night to stay at any hotel. After all, I value Starpoints at ~2.2 cents each, so using my logic, that’s like paying $770 for a hotel night (then again, my valuation of Starpoints also causes me to hoard them, so…).

How much would a paid stay at this hotel cost (and this is for a standard room, since there’s points availability)? $2,612.

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With tax, that’s over $3,000 per night.

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That’s insane.

I’ve redeemed hotel points for a lot of hotel stays, though this is hands down the stay with the highest per night retail value of any redemption I’ve ever made. I don’t think I’ve ever stayed at any hotel that retailed for over $2,500 per night for a standard room.

That certainly makes me feel better about redeeming 35,000 Starpoints per night for my stay here, at least. 😉

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Admittedly that pricing is seasonal given the time of year we’re staying, but still… oy…!

Comments

  1. That’s South Beach for you over New Year’s week. Surprised there was availability at the hotel at all. Really makes you glad hotels haven’t moved to variable award pricing (yet)…

  2. I’m going down to South Beach tomorrow, if you’re familiar with the area, do you have any recommendations as to which of the dozens of restaurants on Ocean Drive have the best food/drink happy hour lunch specials?

  3. Most Miles and Points are not free… correct. They are the by-product or dividend of other activity where their cost is built into the price of the product or service that was the goal of the primary purchase. The two major exceptions are Manufactured Spend and outright Miles and Points purchases. Having said that, we’re all familiar with the huge disappointment we got back in March when Alaska doubled the cost of EK First from 180K to 360K round trip.

    Recently I had a new opportunity that caused me to reconsider the AS-EK value proposition. I was planning a trip to HKG/Macau and wanted the best flight experience that I could score. I had a lot of AS miles in the bank, so that was my currency of choice. I tried to snag Cathay Pacific F, but could not get the dates to work. Delta One would work, but that’s a just OK experience for a trip that long. EK F on the A380 was available for 360K, the same as US to DXB! The “cost” was somewhere in the $3600 – $5400 range based on what it took to get the miles in the first place. In my book, that was worth it. Maybe not to someone else, but to me…. a no-brainer.

  4. Similar to how flights don’t cost $26,000, a fair valuation of your hotel cost isn’t the amount it cost today at over $3,000. It probably would have been available earlier in the year for a much lower price. An example I have is the GH Melbourne that I’ll be visiting during the Australia open next month. I got the base room for $150 booking like 8 months ago, but the same room is now going for $600. For someone to book right now, they’d probably be pretty happy to get it for 15,000 points, but I definitely wouldn’t consider them getting 4 cents per point.

  5. I’m in the Sunset Studio Suite in hyatt regency aruba courtesy of cash+points and my last DSU. The rack rate was $1800+tax per night. Sweet deal given the time of the year.

  6. I’d love to hear your thoughts on the Sunset Studio “Suite”. I’m assuming it’s not a true “Suite”, but a larger room.

  7. If you didn’t know that retail price for your room was $3k, would you say that spending 35k points for a night was a good deal? My guess is probably not.

  8. Lucky, will you do an end of year summary?

    Total points earned
    Total points redeemed
    Total spent on cash tickets
    Miles flown
    Best redemption value
    Worst redemption value

  9. Welcome to my hometown! Make sure you hit up Lost Weekend on the beach and any anonymous Cuban spot with a 24 hour window. Palacia del Jugos is also legit.

  10. You say you redeemed the points “awhile back.” What was the price then? Your comparison of points versus $ should be at that earlier date, not today. That was when you made the decision.

  11. Lucky, on the other end of the spectrum, didn’t you book the 4 Points San Francisco Airport for 3,000 points/night when cash rates were over $300 a few years ago, during Oracle Openworld?

    (Alas, Starwood has eliminated many of these “arbitrage” opportunities….that hotel now sells for 10,000 points/night, which makes paying cash the better deal most of the time.)

  12. You’re going to run in to these kinds of situations when the hotel is actually charging rack.

    Several years ago, I stayed at the Sheraton Krabi beach over Xmas when they wanted rack, which was $400. That made 28,000 points soft five nights look like a steal.

    Next year, I’m going to Octoberfest. There goes 40,000 points, but it beats paying $1500 or whatever I’d get stuck with. It’s not like hotels in Munich don’t sell out for Octoberfest

  13. That is nuts.
    I will say that it is not always easy to get the value you want. For example, I had 420 000 Amex reward points in my account. My wife and I are taking a Singapore to Hong Kong cruise next October. The cruise departs on 10/20 so I need to be there on the 19th. On addition, I want to fly Singapore Airlines; business class at a minimum and I can’t put myself on the waiting list for business or first since my dates are inflexible. I had no choice but to redeem the standard number of points just to make sure that we had a premium cabin.
    Now, if our dates were more flexible, then who knows. The point being that it’s not always easy to get full value for those precious points and miles.

  14. @Dan Diversky – You are spot on, the Sunset studio suites is just a larger oceanfront room with balcony. The standard suite applied for the DSU is the family suite which was not available. The front desk agent offered me to apply the DSU on either the sunset suite or the garden & pool view suite, we chose the sunset and was immediately rewarded with an amazing view of “the sunset” and the oceanfront view was amazing. However I don’t have much to say about the hotel overall – it was just decent enough, the neighboring Barcelo Aruba made the Hyatt look like a Hampton Inn

  15. Would I pay 210,000 HHonors (that’s the equivalent of 35K starpoints) for a SINGLE night at some “aspirational” property? NO, because it would indeed be insane.

    I am right now at Hilton Singapore where I paid 210K HH points for THREE nights for a “premium award”, betting that this would increase my chances of being upgraded to an EXECUTIVE suite at this property that has no standard suites: it worked and I will be spending the next three nights in a huge EXECUTIVE suite @70K HH/night — that’s how one plays the miles/points game with a “full deck.”

    G’day!

  16. Hmm something is fishy. I booked the Week South Beach for last night too and the rate was $1424 not $3000. Hmmmm.

  17. How does the W South Beach manage to fill up all of those rooms with rates so high (even during non-peak periods)? Who are these people shelling out $700+/night to stay there?

  18. can we please stop saying just because you wouldnt pay X means its not worth X. “Redemption value isn’t the retail cost, but rather what we’d otherwise be willing to pay for it in cash”? jesus. go ask an economics professor on the theory of value and our free market system. try not to say ridiculous things in public and keep it to the internet or people will think you are stupid.

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