Starwood increases cost of ‘cash and points’ awards

Starwood, the Westin / Sheraton / W / aloft etc hotel group, has announced some changes (ie cost increases) to its popular ‘cash and points’ awards.

Full details can be found here. Note that the changes do not kick in until March 5th.

To fully understand how ‘cash and points works, though, you need to look at that table in conjunction with the standard award table.

A Category 3 hotel, for example, will – from March 5th – cost you either 7,000 SPG points per night or 3,500 points + $55. This is up from the current 2,800 points + $45.

A Category 4 hotel will cost you either 10,000 SPG points per night or 5,000 points + $75. This is up from 4,000 points + $60.

Here is an extract from the announcement, which gives some clue to their thinking:

Starting March 5, we will be making some updates to Cash & Points. These will include updating pricing and offering more options and destinations. Now you will have more choices at more destinations than ever before.

Changes will include:

Adding the ability to redeem for upgraded rooms such as suites, Club Rooms, Smart Rooms, and rooms with a view, where available.

Adding all Category 1 and 2 destinations worldwide.

Updating pricing for standard room redemption, with the intention of expanded availability.

So, in theory, Starwood is saying that more hotels will be participating in ‘cash and points’ going forward. We should be grateful it is getting more expensive, because more hotels will take part and for more of the year.

(There may be something in this. ‘Cash and points’ was not on offer when I booked an SPG beach hotel in Greece for late May.)

It is also true that the ability to book upgraded rooms and suites on ‘cash and points’ is clearly an improvement.

Fundamentally, under the new pricing you are effectively buying SPG points for around 1.5 cents each based on Category 3 or 4 redemptions. Note that the numbers are not the same for each category, and some hotels – depending on country – add VAT to the cash element.

This is still a decent deal in my view, compared to an ‘all points’ redemption. SPG points are never sold for less than $25 per 1,000 if you buy them outright, and the headline price with no promotion is $35 per 1,000.

1.5 cents is also a good price when you consider that the Amex Membership Rewards to SPG conversion rate in the UK is 2:1. Doing ‘cash and points’ is clearly a better deal than topping up your SPG balance via Membership Rewards and doing an ‘all points’ redemption, since you’d be getting only 0.75 cents per MR point.

The other good thing about ‘cash and points’, of course, is that it lets you do a redemption with far fewer SPG points than you would otherwise need. This is important for UK residents, since earning SPG points is not so easy. There are few SPG hotels in the UK, the Amex points to SPG points conversion is not great, and the earning rate on the Starwood Amex credit card could be better (it is 1 point per £1).

(To see our complete list of all current hotel promotions for the major chains, click here to visit our ‘Hotel Promos’ page or use the link in the menu bar at the top of the page.)