Analysis for when to use Starwood Cash & Points

Reader Brian asks the following question on the “Ask Lucky” page of the blog:

How do you crunch the numbers to decide when to use Cash & Points versus paying at an SPG property? For example, the W Hong Kong is $330/night, or 8,000 points + $150. Trying to figure out how to make the best choice.

It’s a fantastic question I get asked all the time, though I don’t think I’ve ever thoroughly covered it, so I figured I’d do so now.

For those of you not familiar with Cash & Points, it’s one of the best uses of Starwood points whereby you can pay part cash and part points for a hotel stay. The award chart looks as follows:

By just about anyone’s valuation of Starpoints, Cash & Points is a better value than an outright points redemption. The “catch” is that Cash & Points is capacity controlled, while outright award redemptions aren’t (as long as a standard award is available).

There are three things to consider when redeeming Cash & Points:

  • What you value SPG points at
  • The value of the points you’re giving up by not booking a revenue stay
  • The taxes/service charge at hotel

What you value SPG points at

I value SPG points at 2.5 cents each. Everyone’s valuation will be different, but I’m using that as the basis of my analysis. If you value them more or less, adjust the math accordingly.

The one thing I always note with my valuation is that for me the value of a point is based on what I’d otherwise be willing to spend for the product, and not the cash value. For example, I just redeemed 51,000 Singapore Airlines KrisFlyer miles for Singapore Airlines first class from Singapore to Tokyo Narita, which would have cost $3,500 had I paid cash. While I got a great value for my points, I didn’t think I got seven cents per value out of the ticket, as the math might suggest. So the analysis assumes the alternative would be paying for the hotel, and that it’s something you’d be willing to do.

So doing the math for the W Hong Kong example Brian gave, you can either pay $330 cash, or “pay” $350 by using Cash & Points ($150 cash, and $200 worth of points).

The value of the points you’re giving up by not booking a revenue stay

While award stays also now qualify towards elite qualification, only revenue stays accrue points. As a base SPG member you earn two points per dollar, while as a Gold/Platinum member you earn three points per dollar. So valuing those at 2.5 cents each, you’re looking at a 5% return as a base member or 7.5% return as a Gold/Platinum member for booking a revenue stay (not factoring in any promotions). So adding to the above math, the cost of a revenue stay would be reduced to $313.50 for a base member or $305.25 as an elite member if you’re paying, both of which are better values than the $350 you’d “pay” using Cash & Points.

The taxes/service charge at hotel

This is the one thing a lot of people overlook. Many hotels have taxes and service charges that add up to as much as 20%, and you only pay that on the portion of the room for which you’re paying cash. In the case of the W Hong Kong, there’s a 10% service charge.

That means in the case of a Cash & Points stay you’d pay an additional $15 (10% of $150), while for a revenue stay you’d pay an additional $33 (10% of $330).

Summing up the math

So once we crunch all the numbers, a revenue stay is costing you $338.25 ($305.25 plus $33) as an elite member or $346.50 ($313.50 plus $33) as a non-elite member, while a Cash & Points stay is costing you $365 ($350 plus $15).

The above example isn’t incredibly compelling either way, as there are other minor things to consider, like whether SPG is running a promotion or which of your accounts (bank account or SPG account) is looking bigger at the time you’re redeeming).

Hopefully that helps at least a little bit!


  1. Thanks for doing the post. As I was crunching the numbers, I agree. Neither option is really compelling. Are you sure that they charge the 10% on the $150 for cash and points? I didn’t see it when I was on their site before.

  2. @ Brian — In my experience all taxes/fees are charged on the cash portion of a cash & points booking. I could be wrong, though.

  3. I just checked my email confirmation, as I had booked using cash & points (while still mulling it over), and saw this:

    Rate Details
    SPG Cash & Points

    150.00 in US DOLLARS per night

    Service Charge 10.0 Percent Per Room Per Night Is In The Rate

    What they might do is discount the rate, and then add taxes, so the total is $150 ($136.36 + $13.64 = $150).

  4. @ Brian — Interesting. I know taxes always apply on cash & points bookings, though maybe the service fee doesn’t?

  5. Actually, I just looked at a receipt for C&P I did recently, and it looks like they charged tax on the cash portion.
    I’ll likely do C&P (at least a couple of the nights) for this upcoming trip, and will report back how the bill is calculated. 😉

  6. @ Brian and luck – In all my c+p redemptions, most properties charge tax on top of the cash portion of c+p rate. Although there are some properties that back out the tax, so when they do tax it, it comes out exactly the c+p rate (only had it happen twice, both outside of the USA).

  7. Lucky,

    As with everything, I think SPG points have a “bimodal” value. The first is the “I don’t care to do any real planning, I just want to book a place for free and go” value, and the second is the “I have a limited amount of points, and want to hold out for something truly worth it” value.

    The former might be a domestic coach award at the “full fare” rate. The second is your “I’m hunting all over the place for the best F experience ever” rate.

    Likewise, I think there’s an “I just feel like going somewhere” SPG value, and an “If you know what you’re doing, you can really get some great value” value.

    If I’m getting less than 3 cpp, I’ll just find a local place that will save me the points. If I’m getting >4cpp, I’ll book the SPG option if the SPG offering is a superior offering in the area.

    SPG points are worth their weight in gold (and then some) so I hate to use them when I’m getting poor redemption value. I like to save them for when I need them, because when I do, they either save me a ton of $ or provide me a particularly nice place to stay.

  8. You forgot that they convert the $150USD to local currency at the hotel exchange rate which always sucks. Then you pay with local currency on a credit card which may or may not have a FTC. Unless it is domestic, for me, cash and points is always a looser.

  9. @ mrpickles — Interesting, can’t say I’ve noticed a huge issue with it. At the end of the day, though, a bad exchange rate on $150 translates to a few bucks at most, no? And as long as you use a card with no foreign transaction fees you can at least settle the bill in the local currency.

  10. In my experience, C+P gives the best value for Cat 3, 4, and sometimes Cat 5 hotels. I’ve often gotten 6-8% “exchange rate” compared with paying a revenue rate. (Example – Sheraton Frankfurt Airport; C+P = $60 + 4000 points; revenue rate $300. I’m saving $240 + taxes by spending 4000 points – an “exchange rate” of about 6%.)

    In the example above, a Cat 6 hotel for $330, the C+P rate is not nearly so compelling. In general I have not found good point “exchange rates” at most Cat 6 hotels.

  11. Coins,

    The value of a Starpoint is varied and always has interesting discussions on Flyertalk. There was a time you could get a nice room in Europe for 10,000 points per night. Those rooms went for $400USD. This is 4 cents per point. The days of 10,000 point redemptions for many properties are long gone, but you get the picture.

  12. Lucky.. question for you — do you get SPG Points for the portion that you paid in “Cash”?? – so in the above scenario — for $150 that you spent with Cash – if I were to be a Plat Member i’d have received 450 Starpoints and 500 bonus along with the promotional points — to me that would make me use the Cash & Points option more..!!

  13. In my experience, C+P gives the best value for Cat 3, 4, and sometimes Cat 5 hotels.

    This. For instance:

    Westin Macau, $45+2800 SPG. Regular rates are around $150-175.
    Sheraton D-Cube Seoul. $60+4000 SPG. Regular rates were over $200.

    And my experience is, no taxes (meaning I save 10-20%) AND I have always been able to tell the hotel to charge the cash portion in US funds (saving myself international transaction charges).

  14. To B,
    No you do not get SPG points for any cash portion of a Cash & Points spend. I just went through this with SPG over the wording in the Terms & Conditions and the AMEX SPG T&C. Although the rate details will not tell you that you will not earn SPG points nor will the email confirmations of the reservation, you have to actually go to the one and only place it states no points and that is on the 8th bullet of on this page,

    Lucky, please add to this, but I lost this battle with SPG and no other way around it. You do earn SPG points for any ‘eligible spend’ for food, etc while on the C&P stay though.

  15. @ Dan — Very true, though I’d argue that you’re not getting four cents per point worth of “value” if you wouldn’t have otherwise paid the $400. In other words, if you did consistently redeem 10,000 points for $400 rooms, does that mean you’d turn me down if I wanted to (theoretically) pay you 3.5 cents cash per SPG point?

    @ B — As stated by Doug, sadly not.

  16. @ Doug — thanks for that info..

    Theoretically, you should be able to earn SP for CP option for the amount that you paid out of Pocket.. but I guess i’ll just have to suck it up and not cry about not being able to earn points on “partially” free stay.

  17. I absolutely love SPG’s Cash & Points. I think it’s the greatest thing in the industry since credit card sign up bonuses.

    I have 32 nights this year alone and 25 of those were for 35$ or less. Considering I was able to do this from a single bonus (10K+15K), being SPG Platinum is one of my best traveling achievements.

  18. I really thought that taxes were included in the cash portion of C&P. Now, properties might not follow the rules correctly (YMMV) but that was always my belief.

    @Pickels – 1,600 points and USD 30 is a great redemption for properties such as the Le Meridien Chiang Rai/Mai, especially considering Platinums get 500 points back.

  19. In fact, when I went through the booking pages for C&P at Le Meridien Chiang Rai, confirmed that taxes were part of the rate. There is a page that shows the pre-tax rate and “Estimated Total” after tax and the rates were the same (1,600 points and $30). The page also says: “Room rate includes the following:
    7.70 % Per Room / Per Night
    Service Charge:
    10.00 % Per Room / Per Night”

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