Are Starpoints worth buying at 25% off? California case study suggests NO.

SPG is selling Starpoints for as low as $26.25 per 1,000 points; a 25% discount on the normal rate of $35.00 per 1,000 points.

• Get 20% off buying 5,000 to 12,500 points.
• Get 25% off buying 13,000 to 20,000 points.

SPG rules only allow 20,000 points per calendar year to be deposited in a member account whether self-purchased or gifted to your SPG account from another buyer.

Save Up to 25% on Starpoints now through December 31, 2013
Buy Starpoints® now through December 31, 2013, and receive up to 25% off the regular price when you buy 5,000 Starpoints or more. The more you buy, the more you save.

• Buy 500–4,500 Starpoints:
     No Discount ($35.00 per 1,000 points)

• Buy 5,000–12,500 Starpoints:
     SAVE 20%

• Buy 13,000–20,000 Starpoints:
     SAVE 25%

Buy Starpoints link

A member who has not purchased any points in 2013 can buy 20,000 points for $525 through December 31, 2013.

Then, you can still buy up to 20,000 points again when the calendar year resets on January 1, 2014. You have the opportunity to buy up to 40,000 Starpoints over the next 30 days. And same household members can also buy 40,000 points, then pool your points. $525 for 20,000 in December and $700 for 20,000 in January 2014. A couple can get 80,000 points for $2,450.

That is the high end purchase.

The low end purchase for a discount rate is 5,000 points for $115.

But are Starpoints worth buying?

California Case Study on the Value of Starpoints

Normally I would say Starpoints are worth buying at $26.25 per 1,000 points but after checking San Francisco, San Diego and Los Angeles, I am not seeing many deals with Starpoints.

5,000 points is the minimum purchase with a 20% discount.

For this case study I assume I buy 5,000 points for $115 or 20,000 points for $525.

The following hotels in three California cities are compared to calculate the hotel rate savings using purchased Starpoints for Standard Award and Cash & Points Award savings. I need to get at least $28 per 1,000 points in hotel booking savings. Ideally I want a return in the $35 to $50 range.

San Francisco (Feb 17-19, 2014)

Westin St. Francis $262 or 12,000 points, Starpoints value = $21.83

W San Francisco

• $354 (AAA rate) or $412.36 per night after tax. Earn about 700 to 2,000 points on paid hotel stay rate depending on elite status and promotion bonus for SPG Bring on the Nights Jan 5-April 30, 2014.
• $356 (Prepaid)
• $373 (Best Flexible)
• Standard Award = 12,000 points, Starpoints value = $34.36
• Cash & Points =$110 + 6,000 points, or $128.24 + 6,000 points after tax. Starpoints value = $47.35 per 1,000 points.

Los Angeles Jan 14-17, 2014

Westin Bonaventure Los Angeles Downtown

• $249 prepaid = $288 after tax.
• $275 AAA = $317 after tax.
• $289 Flexible Rate = $334 after tax.
• Standard Award = 12,000 points, Starpoints value = $24.00
• Cash & Points = $110 + 6,000 points; $127.13 + 6,000 points after tax. Starpoints value = $26.83 per 1,000 points compared to advance purchase lowest rate.

Sheraton Los Angeles Downtown

• $249 prepaid
• $189 AAA or $218.45 after tax
• Standard Award = 10,000 points, Starpoints value = $21.85 per 1,000 points.
• Cash & Points = $75 + 5,000 points; $86.69 after tax. Starpoints value = $26.40 per 1,000 points.

SLS, Luxury Collection, Beverly Hills

• $436 prepaid.
• $373 AAA or $430.57 after tax.
• Standard Award = 20,000 points. Starpoints value = $21.50 per 1,000 points based on AAA rate.
• Cash & Points = $180 + 10,000 points or $208.04 after tax. Starpoints value = $22.20 per 1,000 points based on AAA rate.

Sheraton Pasadena

• $179 prepaid or $206 after tax.
• $189 AAA = $217 after tax.
• $199 Best Flexible = $229 after tax.
• Standard Award = 7,000 points. Starpoints value = $31.00 per 1,000 points based on AAA rate.
• Cash & Points = $55 + 3,500 points. $63.29 after tax. Starpoints value = $44.00 per 1,000 points based on AAA rate.
• AAA rate comparison used for points value even though prepaid rate is lower due to similar cancellation policies.

San Diego

I dropped this analysis due to not seeing anything close to $28 per 1,000 points redemption value at any hotel over several dates.

Also checked London, UK and saw few good value award stays.

Bottom line:

Cash & Points awards are your best bet for high value points redemption, however, availability of Cash & Points is relatively low in these cities even in the winter off-season. There was even lower redemption value in Standard awards for most Starwood Hotels.

There were more than 50 hotels in the cities I checked and I saw very few good value redemptions for January and February 2014 in San Francisco, Los Angeles, San Diego and London.

The two hotels listed here with W San Francisco and Sheraton Pasadena were the only Cash & Points award rates with high redemption values making the purchase of points a good deal. Westin Long Beach was another good value redemption not included in this post. Three hotels out of 50 or 60 where buying points gives a favorable savings.

This analysis adds validity to the advice that buying points is only advisable if you have a specific redemption in mind where you know you will ultimately save money,

It looks like SPG points are typically under $25 per 1,000 points value at most hotels with $20 and less per 1,000 points redemption value common. This suggests buying points at $28 per 1,000 or even $26.25 per 1,000 points is not a good deal as a hedge against high hotel rates.

*****

Ric Garrido of Monterey, California is writer and owner of Loyalty Traveler.

Loyalty Traveler shares news and views on hotels, hotel loyalty programs and vacation destinations for frequent guests.

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