From time to time, Starwood will reduce the price on SPG points. Well my friends, that time is now and you can save up to 25% off the regular price. Through December 13, 2013, the following reduced prices will be in effect:
- Pricing Group 1: Buy 500 through 4,500 points and you shall receive…NOTHING (no discount for this group) [3.5 cents per point].
- Pricing Group 2: Buy 5,000 through 12,500 points and you will receive a 20% discount (not too shabby) [2.8 cents per point].
- Pricing Group 3: Buy 13,000 through 20,000 points and you will receive a 25% discount (the king of the mountain) [2.625 cents per point].
Is it worth it for you? It depends on your needs, and we will explore the options below.
The Discount Option Comparison
To help your buying decision, I’ve broken down the options into the following groupings:
- Convert to Airline Miles and get the 5,000 Mile Bonus
- Category 6 Redemption Option (Pure Point Redemption)
- Category 6 Redemption Option (Cash & Points)
- Category 2 Redemption Option (Pure Point Redemption)
- Category 2 Redemption Option (Cash & Points)
Option 1: Convert to Airline Miles (and get a double bonus!)
Converting SPG points to airline miles can be quite lucrative. When you transfer 20,000 points to a Starwood transfer partner, you receive a 5,000 mile bonus. In this case, your 20,000 SPG Points would convert to many carriers (like American Airlines, Alaskan Airlines) at a 1:1 ratio. Effectively you would buy 25,000 airline miles for $525.00. This is a nice rate at 2.1 cents per mile.
How does this compare with current pricing of miles ?
|Program||Total Cost||Cost Per Mile||Notes|
|Alaskan||$550.00||0.0212||Currently offering bonus miles for purchase. This is actually 26,000 miles for $550.|
|American||$577.50||0.0231||Currently offering bonus miles for purchase.|
As you can see, the airline transfer option beats buying miles outright. However, Alaskan’s current promotion barely misses the Starwood level. If you were thinking of transferring to Alaskan, you would be better off just buying the miles from Alaskan Air. Why use your Starwood miles for almost the same value when you are limited to a low 20,000 SPG Points per year?
Option 2: St. Regis Here I Come (w/ Points)
Like all Category 6 properties, the St. Regis in Rome requires 20,000 points (off-peak). This is a great comparison category because it shows us the possible value of buying the maximum 20,000 points for $525. Right now, a room at the St. Regis will cost you $445 a night (with the same flexibility of a points redemption). Without calculating anything, you can see this is a terrible value at 2.225 cents per redeemed point.
Option 3: St. Regis Here I Come (w/ Cash & Points)
How does the St. Regis fare with Cash and Points? For a Category 6 property, you will need 10,000 points plus $180.00. If you were to buy the maximum amount, you could get 2 nights for your 20,000 points and $360.00.
In this redemption option, you will receive better value at 2.65 cents per point.
Option 4: Give me a Category 2 Hotel (w/ Points)
If you don’t demand the luxury of a Category 6 property, a Category 2 can offer you great value. Category 2 properties need 3,000 points per weekend night and 4,000 points per weekday night. In this example, we will use the Le Meridien Vilnius (Lithuania) and we will use the weekend night cost of 3,000 points (as we used the off-peak pricing in our prior example).
The flexible rate at this property will cost $114.50 for the same date as the St. Regis Rome. This would net you a value of 3.082 cents per point. A nice value.
Option 5: Give me a Category 2 Hotel (w/ Cash & Points)
Category 2 properties require 2,000 points and $35 per night. Basically, you are buying those 1,000 points for $35. In our example with the Le Meridien Vilnius, this would be a poor redemption option because you would be saving those same 1,000 points at a purchase price of $26.25 while “buying” them for $35.00. At the Le Meridien Vilnius, the value would be 3.975 cents per point. While at first blush this may appear to be a good value, its value is reduced when you remember that you “bought” those last 1,000 points for a much higher price.
If you plan to convert these points to airline miles, it can be very lucrative. Before buying the miles with this plan, you need to check the pricing of each airline. Some airlines, like Alaskan Air, are offering holiday sales which offer almost the same pricing.
If you plan to stay at a Starwood property, my advice is to stay at a Category 2 or 3 rather than a Category 6 because of the better values that the lower tiered properties can offer.
The Fine Print
- Points may only be purchased in 500-point increments.
- Your SPG account needs to be activated for at least 14 days (so if you are signing up for an account, you will need to create a new account by November 29, 2013).
- Only a maximum of 20,000 points may be purchased within a calendar year (if you anticipate purchasing miles in early 2014, it might be a good idea to buy now so you have the freedom to buy an extra 20,000 points in 2014).