Sep202010

Finally found SPG Cash & Points Category 2 award in U.S.A.

SPG made the program rule change in October 2009 to allow SPG Category 1 and Category 2 Cash & Points awards in the US and Canada.

Every couple of months since last year I looked and never found any category 1 or 2 hotel in the U.S. offering a Cash & Points award. I just checked today and went through eight states before I finally tried Wisconsin. Today is the first time I found a SPG category 2 hotel in the USA offering this elusive Cash & Points award opportunity.

Aloft Green Bay Wisconsin has a Category 2 Cash & Points award available this weekend for Friday, September 24, 2010. Green Bay Packers have a Monday Night Football away game in Chicago so the weekend football crowds are out of town.

There are only 10 SPG category 1 hotels in the USA. Good luck finding a SPG category 1 hotel, let alone a Cash & Points offer. There are about 100 category 2 hotels in the US and Canada. 

Simple calculation for hotel stay redemption point value  

Aloft Green Bay is $101 after tax for a paid stay or 3,000 points for a weekend rewards night or 1,600 points and $30 for a Cash & Points award. 

Points Redemption Value of a 3,000 points Award Stay

$101/3,000 = $33.67 per 1,000 points 

Points Redemption Value of Cash & Points Category 2 Hotel $30 + 1,600 points Award

$101 – $30 cash portion = $71 saved with 1,600 points

$71/1,600 = $44.38 per 1,000 points.

 

Advanced Points Redemption Value Calculations 

To be more precise you might want to consider the points for a paid stay not earned when spending points. Paying $89 for the Aloft Green Bay room will earn points and elite credit.

In general, I always try and pay when the room rate is around $100 to earn elite credit and points. But assume elite credit is not a concern and the value of points can be adjusted to include points not earned with a paid stay. The base points generally are not a big factor compared to the loss of SPG promotion points.

Currently SPG has the Every Night Counts promotion for double points or triple points. This promotion is really not a big effect on this stay. But sometimes promotions are worth 1,000 or more points per night or even credit towards a high value free night offer. High-value promotions can greatly impact the value of points calculations and should be considered when determining the value of a point.

Starpoints earned on paid Starwood stay: 

$89 x 2 base points/$1 = 178 points

SPG Double points promotion (Sep 8-Dec 15, 2010) = 178 points

Gold or Platinum elite bonus = 89 points 

  • Base member earns 356 points (with double points promotion)
  • Gold or Platinum member earns 445 points (assume double points)

 

SPG Platinum Elite 

  • Platinum member already requalified for 2011 status earns extra elite bonus point or 89 points = 534 points
  • Platinum member, requalified and with 10 nights in Every Night Counts (triple points) earns 712 points 

To keep this post shorter I will ignore the Platinum member who could potentially earn more points from a paid stay with the current promotions.

Two other points earning situations I will ignore since these are not relevant to the value of a paid stay vs. award stay:

  • Platinum member earns 250 points amenity regardless if paid stay or award stay so this is not included.
  • SPG American Express payment is also negated since 2 points/$1 earned for Starwood Hotel spend whether a paid stay or Cash & Points stay.

  

Redemption Value of Standard Award Stay for SPG general member:

Non-elite member earns 356 points paying $89 base rate ($101 after tax)  with the current double points promotion. 

  • $101/3,356 points =
  • $30.10 per 1,000 points.

This is still good redemption value.

Redemption Value of Cash & Points Stay for SPG general member: 

  • $101-$30 = $71 saved;
  • $71 saved ÷ (1,600 points Cash & Points Award + 356 points not earned for paid stay) =
  • $71 ÷  1,956 points =
  • $36.30 per 1,000 points

This is still excellent redemption value since you can buy points for $35 per 1,000 points from SPG.

 

Gold or Platinum elite member earns 445 points paying $89 base rate ($101 after tax)  with the current double points promotion.

Redemption Value of Standard Award Stay for SPG Gold/Platinum member:

  • $101/3,445 points =
  • $29.32 per 1,000 points.

This is still good redemption value. 

Redemption Value of Cash & Points Stay for SPG Gold/Platinum Elite: 

  • $101-$30 = $71 saved;
  • $71 saved ÷ (1,600 points Cash & Points Award + 445 points not earned for paid stay) =
  • $71 ÷  2,045 points =
  • $34.72 per 1,000 points

This is still excellent redemption value since you can buy points for $35 per 1,000 points from SPG.

The main point of this post is finding a Cash & Points for a SPG Category 1 or 2 hotel is a rare find in my searches. This is the first time I have seen a hotel offer this award in the U.S. since they were placed on the SPG award chart in October 2009.

Questions for readers:

Have you ever redeemed a Cash & Points award stay in the U.S. or Canada at a Category 1 or 2 hotel?

Do you even see them offered?

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

More articles by Ric Garrido »

Comments

  1. I read your site religiously everyday and wanted to thank you for all of the breakdowns on point values you have posted throughout the past couple months!

  2. Thank you for being a reader and I am glad you enjoy the point value discussions. I know many people spend lots of time trying to figure out how to calculate the value of points.

    There are many ways to calculate point value and each person needs to fine tune the method to your persoanl travel pattern.

    These are just examples to help people think about the issue and refine it to meet you own needs.

  3. Yes i have…more than once. Often a simple phone call to SPG to see if they have C+P available will do it. Often they have the rooms available for c+p but its not listed on the site.

  4. “Often they have the rooms available for c+p but its not listed on the site.”

    Same results for me – I don’t stay much at Starwood Properties anymore, but I was 2-for-2 last year at cat 2 properties.

  5. A simple internet search is a simpler booking avenue for me than a simple phone call. I do not want to call SPG and ask about category 2 hotels for Cash & Points when they are not showing up on the website.

    That sounds like lots of fruitless minutes in hopes of getting lucky.

    If a room is available I want to see availability on the website.

    Cash & Points show up regularly for category 3 and higher hotels. I can search any date in California and find plenty of Starwood hotels offering Cash & Points, but only for category 3 and higher hotels. I have never seen a Category 2 Cash & Points option show up for a California hotel.

    If SPG offer the awards and SPG has the category 2 awards available over the phone, then why waste my time by not putting the category 2 Cash & Points awards online to see?

    But obviously I appreciate the feedback and I will try the phone tactic the next time I am looking for a Cash & Points award and I do not see availability online.

  6. It’s clear that C&P results in a better return for points used, but that shouldn’t be the sole analysis. You should also factor in cost of purchasing back the points when doing cash & points. In your example, you are paying $30 to save 1,400 points (i.e., buying 1,400 points at a cost of $21.43 / $1,000).

    While I value my starpoints at more than $21.43/$1,000, I wouln’t shell out cash to buy points at that rate.

  7. Why should I factor in the cost of purchasing back points?

    I am paying $30 to only use 1,600 points rather than 3,000 points for a Cash & Points stay and I save 1,400 valuable points in my account. It will cost me over $52.50 if I need to buy 1,500 points from SPG to complete a future reward redemption.

    My only other option to the Cash & Points award stay is to spend 3,000 points assuming I choose to go with an award stay.

    So I pay $21.43 per 1,000 points for the 1,400 points credit towards the 3,000 points category 2 standard award. But since I am getting over $30 per 1,000 points in immediate redemption value with the category 2 Cash & Points award, then I am getting a higher value for my points than the cost to buy them at $21.43 per 1,000 points.

    You say, “While I value my starpoints at more than $21.43/$1,000, I wouldn’t shell out cash to buy points at that rate.”

    In my travels I would rather spend $21.43 to buy 1,000 points than redeem points in my account for $21.43 in redemption value.

    I find Starpoints to be a valuable hotel stay currency.

    I can get this stay buying 1,400 points for $30 ($21.43 per 1,000 points), and the 1,400 points I save can be used for a future higher value hotel stay redemption.

    Extrapolate this one award night to 20 Cash & Points nights where I save 28,000 points by spending $600 rather than using standard SPG rewards. Those 28,000 points I save by using Cash & Points can be redeemed for a 5-night category 3 award stay worth far more than $600.

    I come out hundreds of dollars ahead by redeeming Cash & Points rather than standard award stays.

    Points only have value when redeemed. Since I have never found myself sitting on more Starpoints than I could use, the opportunity to buy points through Cash & Points awards at a rate below the standard SPG purchase price of $35/1,000 points is a welcome opportunity.

  8. As I mentioned I too value Starpoints at more than $21.43 per 1,000 points — so I didn’t mean to say it was a bad deal to do the C&P option. It’s just clear that a C&P on Cat 2 properties aren’t as great of a value as they are on Cat 4s (the best value) when you can essentially pay $10 for 1,000 starpoints (and should always be done instead of using all points). Even Cat 3s, 5s and 6s provide a better pay for keeping starpoint return.

    I agree that it should be very easy for anyone to get value of more than $21.43 for a 1,000 starpoints. My point, however, is that if I was approached out of the blue with an opportunity to buy starpoints for $21.43 per 1,000, I would buy some only if I needed them and wouldn’t empty out my bank account for that deal. Cash is the most versitile currency out there.

    BTW, I am a big fan of the blog and really appreciate the time and effort you put into it. Thanks!

  9. azhoopsfan –

    I see your point that the purchase price for a Cash & Points category 4 award night for $60 and 4,000 points is a better deal in terms of the cash equivalent value for points. In this case you save 6,000 points on the standard award cost of 10,000 points per night by spending $60 compared to saving 1,400 points spending $30 on a category 2 cash & points award redeemed on a weekend night in the Aloft Green Bay example from the post.

    $60 cash portion for category 4 C&P award is like buying Starpoints for $10 per 1,000 points. But unlike Priority Club, these starpoints never end up in your account and you can’t actually buy any points by cancelling the award stay like you can with a Priority Club Points + Cash award. You likely know that, but I want it to be clear to others.

    I said in the post that I would be unlikely to use an award when the rate is only $101 after tax. But let’s assume the room rate is $150 after tax. The category 2 Cash & Points award is certainly more valuable now than the Green Bay example. I have used category Cash & Points awards in Asia where the room rate was over $150 per night.

    For a $150 room at a category 2 hotel with a Cash & Points award I pay $30 and 1,600 points to save $120.

    The 1,600 points redeemed are worth $75 per 1,000 points. That is extraordinary redemption value.

    But I still need to spend $30 in lieu of 1,400 points. The $21.43 per 1,000 points value does not change.

    So I do not think it is particularly relevant whether you pay $21.43 per 1,000 points on a category 2 Cash & Points award or $10 per 1,000 points for a Category-4 Cash & Points award to save 6,000 points on the category 4 standard award price.

    The only side of the equation that matters is what the redemption value is for the points you spend. You only have three choices:

    – pay cash
    – pay points for award
    – pay cash and points for award

    The only way the Cash & Points award will not be better value than the standard award for a weekend category 2 room is if the room rate is under $60. And I definitely will choose to just pay for the room to get elite credit and promotion credit.

    Let’s say the category 4 award for $60 + 4,000 points is a $180 hotel room rate. For many prospective guests the desire to part with 4,000 points with a Cash & Points award will trump spending an extra $120. The 4,000 points only have a $30 per 1,000 points value.

    The fact that I paid $60 for a Cash & Points award and saved 6,000 points really has no effect on the redemption value of the points I spent. The value would have been lower, only $18/1,000 points if I spent 10,000 points for a standard category-4 award night, so obviously the C&P award is better value than a standard award.

    In Green Bay I can get $45 per 1,000 points in a Cash & Points category 2 redemption.

    I need to save $45 per 1,000 points when I spend 4,000 points for a category 4 hotel to get the equivalent redemption value as Aloft Green Bay.

    $180 in points value + $60 cash value means I will need to redeem at a category 4 hotel offering Cash & Points with a room rate over $240 per night to get the equivalent redemption value to the Aloft Green Bay Cash & Points category 2 hotel award.

    ***

    And thanks for the kind words about Loyalty Traveler blog.

Comments are closed.