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Yesterday I wrote about the increased sign-up bonus on the Starwood Preferred Guest® Business Credit Card from American Express. The card is offering a sign-up bonus of 35,000 Starpoints after spending $7,000 within three months, which is the best sign-up bonus we’ve seen on the card. The card’s $95 annual fee is also waived for the first year.
On that post, reader meegabroad asked the following question:
What are the chances that the SPG 5k bonus per 20k transfer to airlines will remain in effect?
I’m sure it’s something a lot of people are wondering, so in this post I’ll share my thoughts on that.
The value of converting Starpoints into airline miles
One of the great uses of Starpoints is converting them into airline miles. Starwood Preferred Guest has 35 airline transfer partners, most of which allow 1:1 transfers:
|Aegean Airlines Miles+Bonus||American Airlines AAdvantage||Hainan Airlines Fortune Wings Club||Qatar Airways Privileges Club|
|AeroMexico Club Premier||Asiana Airlines Asiana Club||Hawaiian Airlines HawaiianMiles||Saudi Arabian Airlines Alfursan|
|Air Canada Aeroplan||British Airways Executive Club||Iberia Plus||Singapore Airlines KrisFlyer|
|Air China Companion||Cathay Pacific Asia Miles||Japan Airlines (JAL) Mileage Bank||Thai Airways Royal Orchid Plus|
|Air France/KLM FlyingBlue||China Eastern Airlines Eastern Club||Jet Airways||topbonus loyalty|
|Air New Zealand Air Points||Delta Air Lines SkyMiles||Korean Air Skypass||United Mileage Plus|
|Alaska Airlines Mileage Plan||Emirates Skywards||LATAM Airlines LATAMPASS Kms||Virgin Atlantic Flying Club|
|Alitalia MilleMiglia||Etihad Airways Guest||LifeMiles of Avianca||Virgin Australia Velocity|
|ANA Mileage Club||Gol Smiles||Lufthansa Miles & More|
What makes this so valuable is that you get a 5,000 point bonus for every 20,000 points you transfer, meaning that you can effectively earn 1.25 airline miles per Starpoint. Not only is this a great value, but the way I see it, it hedges your bets against any sort of a devaluation of Starpoints. Typically there’s a cost to holding onto points currencies because of the fear of devaluations, but with Starpoints we have so many airlines we can transfer the points to that I’m happy just to hold onto the points and redeem them last.
The ability to essentially earn 1.25 miles per Starpoint is also one of the things that makes the Starwood Preferred Guest® Business Credit Card from American Express and Starwood Preferred Guest® Credit Card from American Express so valuable — for someone who largely spends money in non-bonused categories, earning 1.25 miles per dollar spent in your choice of 35 different programs is compelling.
With that in mind, is this transfer ratio just ripe for devaluation, given that in general I expect we’ll see cuts with Marriott? I don’t think so…
Transfer Starpoints to American for redemptions in Qatar Airways business class
Marriott has an equally compelling airline transfer option
I think the reason people are concerned about Starwood devaluing their airline transfer ratio is because Marriott Rewards points can freely be moved to Starwood Preferred Guest at a 3:1 ratio, so this greatly increases the number of people able to redeem their points that way.
What most people don’t realize is that the value of converting Starpoints into airline miles isn’t actually disproportionately rewarding. That’s good news, as I see it, since it makes it less likely that we’ll see an imminent devaluation.
Marriott offers Hotel + Air Packages, which are also an excellent value. With this option you can redeem points for a combination of airline miles and free nights at a Marriott property (the cost in points is different depending on the category of property you want to stay at).
You can see my previous post on this for full details, but just to give an example, here are the costs if you want miles with programs like Air Canada Aeroplan, Alaska Mileage Plan, American AAdvantage, etc.:
|Hotel + Air Package 1||7 Nights + 50,000 Miles||7 Nights + 70,000 Miles||7 Nights + 100,000 Miles||7 Nights + 120,000 Miles|
|Ritz Tier 1-3||350,000||370,000||400,000||420,000|
|Ritz Tier 4-5||470,000||490,000||520,000||540,000|
These prices are in Marriott Rewards points, and points transfer from Starwood to Marriott at a 1:3 ratio. This means that 90,000 Starpoints will get you 120,000 airline miles plus seven free nights at a Category 1-7 property. Even if you take the free nights out of the equation, that’s 1.33 airline miles per Starpoint, and you get seven free nights on top of that. So you’re actually getting a better transfer ratio through Marriott Rewards than Starwood Preferred Guest, and you’re getting seven free nights thrown in.
Currently the ability to convert Starpoints into airline miles isn’t a much better value than converting Marriott points into airline miles, so I don’t necessarily see this as a benefit on the chopping block. There are two considerations, though:
- Starpoints can be converted in virtually any quantity, while Marriott requires specific quantities for converting points as part of a package, which probably eliminates a lot of people
- A lot of people probably don’t know about Marriott’s amazing packages, which limits the number of people using this option
Transfer Marriott points to Alaska for redemptions in Japan Airlines first class
Personally I don’t think Starwood’s mileage transfer options are at risk of being devalued in the short term, since Marriott offers what’s arguably a more attractive mileage transfer option. This continues to make the Starwood Preferred Guest® Business Credit Card from American Express and Starwood Preferred Guest® Credit Card from American Express a great options for everyday spend.
It’s possible that eventually the option to convert points into airline miles will be adjusted, once Marriott forms a single loyalty program. However, in the short term I don’t personally think this transfer option is at risk. At a minimum I think we’d get some notice of this option changing, which is why I continue to feel comfortable hoarding Starpoints (and it’s one of the few currencies I hoard).
Do you think adjustments will be made down the road to Marriott and Starwood airline mileage transfers? What do you think these changes would look like?