Rationalizing How Many Starpoints To Transfer To Virgin America

As I posted about yesterday, Starwood and Virgin America are cutting ties as of January 6, 2017. This has to do with Alaska’s takeover of Virgin America, and perhaps more specifically, with the fact that Virgin America Elevate points will convert into Alaska Mileage Plan miles at a 1:1.3 ratio.

As it stands, Starpoints transfer to Alaska Mileage Plan and Virgin America Elevate at a 1:1 ratio, with a 5,000 point bonus for every 20,000 points transferred. This presents a pretty cool arbitrage opportunity. Since Virgin America points will convert into Alaska miles at a 1:1.3 ratio, it means you can temporarily transfer Starpoints to Virgin America and then to Alaska, and get a 62.5% bonus in the end. In other words, 20,000 Starpoints will convert into 32,500 Alaska miles (when you account for the 5,000 point bonus, and then the 30% bonus on top of that).

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I’m sure I’m not the only one who is trying to decide how many Starpoints I want to convert into Virgin America points in the next week, before this opportunity ends.

Starpoints are really valuable

I value Starpoints at ~2.2 cents each. Part of what makes Starpoints so valuable is how flexible they are. You can redeem them efficiently for hotels, convert them into Marriott Rewards points, or transfer them to airlines at a fair ratio.

So their flexibility adds to my valuation of them, though at the same time sometimes it’s a challenge how valuable they are. I hoard Starpoints, rather than redeeming them, which directly contradicts my usual “earn and burn” approach to points. When it comes time to redeem points I usually redeem all other points ahead of Starpoints.

A while back stvr left the following comment about how I paid for three Starwood hotel stays, rather than redeeming points:

I think you should change your valuation of SPG points. Three times you went in for a booking, three times you came out with paying cash b/c it didn’t meet your valuation. Maybe your valuation is wrong.

I guess the issue is that as far as my various points currencies go, I’m happiest hoarding Starpoints, since I feel like they retain their value better than individual mileage currencies.

At the same time…

I’d buy Alaska miles at 1.35 cents each

Assuming I value Starpoints at ~2.2 cents each and then get a 62.5% bonus when converting them (indirectly) into Alaska miles, that’s like picking up Alaska miles for 1.35 cents each. At that rate I’d absolutely buy Alaska miles, given how valuable they are.

Japan-Airlines-First-Class-40
Redeeming Alaska miles for Japan Airlines first class is a great deal

At the same time, there’s an inherent risk to holding onto an individual mileage currency, which doesn’t exist as much with Starwood. For example, I used to love Alaska miles for Emirates first class redemptions, though they devalued that overnight (I don’t think they’ll do it again, but who knows).

So, how many points will I transfer to Virgin/Alaska?

I guess my personal conclusion is that it absolutely does make sense to transfer Starpoints to Alaska with a 62.5% bonus. In other words, I think that if Alaska has awards you find valuable, 1.625 Alaska miles are worth more than one Starpoint.

However, it only makes sense to make such a transfer with a short term use of points in mind, so you’re properly accounting for the holding costs of having a non-flexible points currency. So while picking up Alaska miles for ~1.35 cents each sounds like an amazing deal, realistically I’ll only transfer points that I could use within 6-12 months. So personally I have 700,000 Starpoints (I almost never redeem them and have been collecting them for a decade), and think I might transfer maybe 160,000 Starpoints to Alaska Mileage Plan, which would convert into 260,000 Alaska miles.

I’m curious about you guys — do you plan on transferring Starpoints to Virgin America before the transfer opportunity ends?

About lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

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Comments

  1. Another point to consider is that Starpoints might not be around forever so you will eventually need to transfer them somewhere or let them become 3 Marriott points each.

  2. I’m a big Starwood fan and don’t disagree with your valuation. But how can they be less likely to lose their value when they are diasaopearing in a couple of years? You are hoarding Marriott points; it’s only if you spend them in a couple of years are they Starwood points.

  3. Lucky,

    How do you hedge against the possibility that Starpoints functionality could change dramatically on 1/1/18? Wouldn’t it be better to take advantage of this favorable Alaska transfer ratio now given that uncertainty? Who knows if you will even be able to transfer Starpoints to airline partners at all in the future.

  4. To answer your question directly, Lucky, I am indeed considering clearing out my Starpoints balance (not that many, 20,000 points) an transferring to Alaska. The only issue is that I am prioritizing American these days (I was able to get Platinum status via a promotion for 2018, and I have an off chance of getting Platinum Pro in 2018 based on business travel), so I would rather credit to American these days compared to Alaska. I often redeemed Alaska miles for Delta flights, which is going away. As someone that never flies Alaska, their points became less valuable for me after the Delta announcement. I’m applying for a status match to Alaska, so maybe that will help with my decision.

  5. I transferred 40K SPG points to Virgin America shortly after they announced the transfer rate of 1.3 between VX and AS. I want to check out first class on Cathay Pacific with these points so I need 70K points. I did some shopping thru Alaska’s portal, and also found a 5K points award thru Pointshound on a 2 night hotel stay. All told, between the SPG transfer and other points I’m scraping together, I now have enough to check out CX first class sometime in Q1 of this year.

  6. Transferred 40k to VA. Any idea when the 1.0 : 1.3 conversion to Alaska will be allowed? Hope they don’t change the ratio on us.

  7. @Lucky

    90K SPG = 143K Alaska Miles via Virgin America

    90K SPG = 120K Alaska Miles + 7 Nights at Marriott Property via SPG to Mariott (Air + Hotel Package)

    In other words, Is the 7 nights at a Marriott Property (Cat 1-5) worth 23K Alaska miles

  8. For 163,300 star points, you can convert to Marriott and get two five night hotel packages and 240,000 Alaska miles. It’s 20,000 fewer miles, but you get 10 hotel nights and there is no urgency to do it in the next week.

  9. Your last sentence makes no sense Lucky, ” I might transfer maybe 160,000 Starpoints to Alaska Mileage Plan, which would convert into 260,000 Alaska miles.” So are we to transfer to Alaska for the miles or Virgin first then to Alaska?

  10. You can buy Alaska miles at a reasonable price and as much as you need – something you can’t do with most of their other airline partners. Thats why i would not transfer large amounts of Starpoints. Of course if you want to save cash it is a very good opportunity.

  11. @lucky I probably have 100k Starpoints in my account and around 50k AS points. I’m thinking of transfering roughly 40-60k starpoints to get closer to 100k AS or 140k AS points. Looking for a CX redemption in business or first class to HKG or even JNB!

    I’m slightly hesitant because i’m unsure about the award availability.

  12. What I did for an ideological compromise:

    1. Bought SPG points at 35% discount.
    2. Transferred those points to Alaska.
    3. Essentially bought Alaska miles at 1.4 cents.

    I know it’s hoarding but that’s the way life is, we hold on to what we love

  13. @Tony,
    I’m sure he means via Virgin.

    I’m thinking of transfering 40k in SPG points. I only have 50k and about 100k in Marriott points. I’m torn between moving them to Marriott and doing the Miles&Hotel deal at some point down the road or the transfer to Alaska via Virgin. If I flew Alaska more it would help. I have about 100k in Alaska miles so this transfer would help my long term goals there to get 200k for an award trip plan.

  14. Since you’ve already reviewed most of the airlines which you’d use Alaska Miles to book, the main use I’d think you’d have for those miles are for positioning flights. Even for those you seem to enjoy booking strange airlines on fifth freedom routes. Figure that at most you’d need 1-2 flights in the next 6-12 months which you’d be willing/have to travel on an Alaska partner to/from somewhere you’d be traveling. Transfer enough points to do that.

    Leaving so many points in SPG is great but with the time it takes to transfer points from them and the close in bookings you usually make, does it make sense to keep those miles which you’d never be able to use for the solitary point you are keeping them for?

    Let some of them go. If they’re in Alaska you’d be more likely to actually use them for a redemption.

  15. @Larry, @Andy,

    I tried recently to get a 5-night + miles package, and I couldn’t get it. I called 4-5 times and every time (different) marriott agent told me 5-night package is not available to the general public. So I had to go for 7-nigh package.

    I do think that 7 nights in 1-5 category hotel is absolutely worth 23K miles. Right now you can buy 23K Alaska miles for ~$500. That’s less than 100$ per night in the hotel. If you go via “buy starpoints -> transfer to VA -> transfer to Alaska” 23K would cost even less than that.

  16. Transferred 180,000 SPG points. It is bit of a gamble, but I think SPG/Marriott is more likely than AS to have a devaluation first. I have no intention of using the miles immediately, as AS will be my main programt, having been matched to MVP75.

    The bigger issue for me is what to do with my Thank You points. The only really good partner (and not that great in terms of value) is SQ. However if convert to VX, must take a haircut on 100,000 points to 65,000 AS miles. Any thoughts?

  17. @Andrey @Larry
    The 5 night Marriott package is supposed to be limited to Marriott Vacation Club owners. I have heard of the occasional exception, but I believe it is a disservice to non-MVCI owners to set an expectation of availability of 5 night packages. Cheers.

  18. Marriott hasn’t allowed 5 night package to non-MVCI owners with Platinum members included for many months. it is unrealistic for non-MVCI owners to assuem 5 night package is available.

    I have transferred 160k SPG points to VX and only has 70k left in SPG.

  19. @Jeppie I am not a timeshare owner but had no problem booking a 5 day. That was a couple months ago though. If they are enforcing the timeshare thing now, I cannot say. I have read that some agents say it’s also a perk for Platinum and others let anyone do it. I am merely a sample size of 1. As for setting expectations, I would think that anyone playing this game knows it can change at any time. Marriott could increase the price of travel packages overnight, or even eliminate them. Just as Alaska nearly doubled Emirates premium redemptions with no notice.

  20. How quickly do the points transfer into each program? Spg-virgin, and virgin-Alaska??
    I also need to transfer spg points from my husband into my spg to top off an additional 20k for the transfer bonus.
    Thanks!

  21. Transferring in batches , one more to go . I was already considering transferring all to Alaska when the Marriott takeover was completed . With the Virgin America bonus it is even more appealing . I was reluctant to give up the many transfer partners with Starwood but , with the Alaska partner options I think we can manage .
    I think I play a limited game compared to most .

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