Yesterday I shared my one wish that would make Starwood points the clearly most valuable rewards currency: timeliness of transferring points.
Other programs figure out how to make transfers instantaneous, while Starwood can take literally weeks to move points around.
In the comments to that post, Jay hits on my biggest frustration with Starwood hotel night awards.
for me, i’d be that ridiculous rule on charging double points for hotels that don’t have standard rooms.
ALL hotels should have standard rooms. that really ires me to no end
I have hit on this before. For instance, three years ago I wrote Starwood’s outrageously-priced unattainable high-end hotel redemptions.
[I] am increasingly bothered by another feature of their redemption program — the exorbitantly high redemption rates for some of their high-end properties that are described as ‘all-sute’ hotels.
Some of their most expensive high-end properties..are all suites. That is part of why they’re as expensive as they are.
In order to get the same value out of a (regular, not all-suite) category 7 hotel award as a category 2 weekend hotel award, the rate for the property is going to need to be about $1000 or more per night. That’s at the standard 30,000 Starpoints for a category 7 hotel, ignoring the high season premium…
Starwood Charges Double for Its Best Category 6 and 7 Hotels
Starwood assigns hotel redemption categories — and thus the number of points required by a hotel — based on that hotel’s average room rates.
The most expensive hotels go into category 7, which are 30,000 points per night (35,000 for ‘high season’ dates).
But Starwood also has a rule that “all suite” hotels do not have standard rooms, and thus you have to spend twice the points for a free night. If a Starwood category 7 hotel is considered to be all suite, then a room would cost 60,000 points per night (70,000 in high season).
This rule applies only to category 6 and 7 properties, and it does not apply to all of them — the St. Regis Bali is a category 7 hotel where entry-level rooms are suites but Starwood Preferred Guest does not charge double to redeem there (which is good, because you rarely get even 2 cents per point in value redeeming for a room there as it is!). And of course it doesn’t apply at “Sheraton Suites” properties regardless of category.
But this does apply at places like the W Maldives, Sunset Key Cottages in Key West and St. Regis Bora Bora.
Charging Double Penalizes Members Twice
All-suite hotels achieve (or expect to achieve) the sort of room rates that justify their category 6 or 7 category precisely because of the type of accommodations they offer, or at least in large part because of that.
Offering all suite accommodations makes them more expensive, puts them into the top category.
But once they’re in that top category, Starwood charges double for them because they are all suite.
It’s circular reasoning that bends over back into the member’s point balance twice — the first time because of room rates, the second time because they charge double for the very thing that drove the room rate in the first place.
This Practice Makes SPG Points Pricing Absurd for their Best Hotels
One of the most attractive features of Starwood is the sheer number of aspirational properties in their portfolio. Marriott Rewards is a much bigger program but there are only a handful at most of ‘special’ properties in the chain. Starwood has a much greater focus on places that are more than just a room, but a destination in themselves. That’s not everyone’s cup of tea, but it’s a major feature they offer.
But it’s precisely those hotels that are taken out of reach by the ‘double points for all suite hotels’ practice, which undercuts the value proposition for hotel redemptions in the program (and is a big reason that I talk more about the mileage transfer value of Starpoints).
The SPG program used to have category 5 as its highest levels, and hotels participated and offered rooms at the category 5 price point. They added a category 6 and also implemented double points charges for all suite properties. Then they added category 7.
What’s most egregious is that it takes orders of magnitude more spending at a Starwood hotel to earn a top tier free night than with any other chain — several times more than Hilton, even, after that latter program’s March devaluation.
A base member would have to spend $35,000 at a Starwood hotel in order to earn enough points for a high season category 7 all suite hotel night — compared to that base member spending $6333 in in-hotel spend with Hilton for their most expensive redemption.
Starwood’s high-end all suite redemptions are so far out of whack that in many cases it’s much cheaper to pay the least expensive room rate and then redeem Starwood points as an Instant Award for a folio credit at the property. Though even this isn’t a good use of points, since you’re only getting a bit over a penny per point in value with Instant Awards. But category 7 double points redemptions can be even worse than this.
When a Starwood point can be worth 3+ cents per night redeeming for hotels, it seems crazy to fork over 70,000 – 100,000+ points per night for high-end properties retailing for less than $1000. And yet they may charge this for rooms barely more than half that.
This effects a relatively small number of hotels, but it is the very ‘best’ hotels that are made inaccessible to redemption in any meaningful way. So for my wish as to what Starwood would change about hotel redemptions? End the practice of charging double for all suite properties in the top redemption tiers.
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