Several years ago a woman commented on my blog questioning why I obsess with changes in hotel reward categories? Perhaps it is my field of distance measured by personal history in loyalty programs, especially Starwood Preferred Guest where I was an elite member of Westin Hotels several years before Starwood purchased Westin and Sheraton brands in 1998. I have been a member of Starwood Preferred Guest since 1999 when the hotel loyalty program was created.
In 1999, I earned 7,000 bonus Starpoints after three hotel stays with an SPG promotion. In 2009, I earned several free nights at luxury hotels like St. Regis San Francisco and St. Regis Monarch Beach Dana Point through the SPG promotion for one free night after two Starwood stays, up to category 6 hotels.
Over the years I watched the change in SPG hotel reward category assignment and annual reassignment. Several hotels where I stayed when they were category 2 a decade ago for 3,000 or 4,000 points per reward night are now category 4 hotels at 10,000 points per night. The Westin San Francisco Airport has climbed from SPG category 2 in 2005 to SPG category 5 in 2015. The Palace Hotel, Luxury Collection in San Francisco has risen from SPG category 4 in 2007 to category 6 in 2015.
For several years I called out SPG for continually shifting hotels up from lower categories rather than creating a distributed category reassignment by ranking hotels against each other and maintaining a large low category supply for hotel reward nights using points. SPG has been reversing its trend over the past few years by repopulating category 1 hotels.
2009 to 2015 SPG Hotel Reward Category Reassignment
In 2010, I made a five year analysis of SPG reward night category changes for Starwood Hotels showing only 22 specific hotels dropped in SPG category from 2006 to 2010. In 2010, 389 specific Starwood Hotels from 2006 out of about 1,000 Starwood Hotels worldwide had gone up at least one category level. SPG category changes over five years increased the points cost for a reward night at nearly 40% of Starwood Hotels around the globe, while only 2% went down in category. The good news I guess is a majority of Starwood Hotels maintained the same category from 2006 to 2010.
SPG Hotel Reward Category Reassignment 2010 to 2015
- 2007: 291 up and 17 down.
- 2008: 219 up and 14 down.
- 2009: 82 up and 156 down. SPG eliminated SPG peak season dates for category 5 to 7 hotels. These changes occurred during the heart of the global financial recession.
- 2010: no hotel reassignment.
- 2011: 84 up and 93 down.
- 2012: 183 up and 138 down.
- 2013: 218 up and 48 down.
- 2014: 110 up and 140 down.
- 2015: 130 up and 138 down
Since 2007 there have been 1,317 SPG hotel reward category increases and 744 hotel category decreases. In four of eight years with category reassignment, there were more hotels going down than up.
The main concern is SPG category reassignment in 2007, 2008 and 2013 resulted in 728 hotels rising in category when only 79 hotels dropped in category. Only in the last two years has SPG made an effort to move hotels down in category in relative proportion to those hotels rising in category.
The table below shows the distribution of Starwood Hotels among the SPG category 1-7 from 2009 to 2015. There are a few data points of note.
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Starwood Hotels in category 1 have increased from 28 hotels in 2009 to 62 hotels in 2015. Category 1 was dying out until the 2009 shift, the year of the largest downgrade in hotel category in SPG history.
SPG category 2 hotels gained from 2009 to 2012, but have declined again in the last few years. There were 169 SPG category hotels in 2009 and that grew to 231 in 2012, but declined to 200 this year. The third column for each year is the cumulative proportion of Starwood Hotels by categories.
In 2009, fewer than 20% of Starwood hotels were in SPG category 1 and category 2. That proportion grew by 2012 to 25% of Starwood hotels worldwide listed as category 1 and 2 hotel rewards. In 2015 that number has dropped again to 2009 levels. It is important to remember that 2007 and 2008 saw a huge proportion of Starwood Hotels rise in category with almost half of all properties worldwide rising one category. The decline of Starwood Hotels in category 1 and 2 hotel rewards in 2015 falling back to 2009 levels is not a good sign. Many of the category 1 and 2 hotels were moved out of the low tiers from 2005 and 2008.
Category 3 has become a smaller proportion of Starwood Hotels in the past five years dropping from 31.6% of all hotels in SPG category 3 in 2009 down to 25% in 2015. With 317 SPG category 3 hotels in 2015, there is only one fewer category 3 hotel than in 2009.
Looking at categories 1-3 cumulatively shows that the proportion of hotels worldwide in the bottom three tiers has dropped from a majority of hotels at 51.2% in 2009 to 46% in 2015. There are 579 hotels in categories 1-3 in 2015. In 2009 the number of hotels was 515 hotels. There are 64 more Starwood Hotels in the low tier categories today than there were in 2009. More choice is a good thing.
While Starwood Hotels has grown by about 250 hotels since 2009, apparently most of these hotels are ending up in higher categories from 4-7.
Category 4 is the tipping point for SPG reward nights. 10,000 points per reward night eats up Starpoints much more quickly than low cost category 1 and 2 hotel reward nights or category 3 Cash & Points nights. The best attribute of SPG Category 4 is no peak season dates. Take a look at SPG category 4 hotels after the 2015 SPG category changes took effect. The website simply pasted the old category 5 peak season dates for each downgraded hotel’s category 4 listing. I made a note yesterday as I was deleting peak season dates from my SPG category changes spreadsheet. There were more than 3,000 lines with a Starwood Hotel peak season date, each designating a higher reward night cost for a period from six days to more than 3 months in length for the specific hotel. Take a look at the list before Starwood deletes all the peak season dates and you will see what good value there is for points at hotels that would have been 16,000 points per night and are now 10,000 points for 2015.
My advice for SPG members with points to spend is look over the category 4 hotels and see if there is a property where you want to vacation. Some of these hotels will be SPG category 5 again next year.
The data point that sticks out for me from my table for SPG category 4 changes since 2009 is 82% of all Starwood Hotels worldwide were in SPG categories 1-4 in 2009 and that has declined proportionally to 72% in 2015.
SPG category 5 is where much of the growth and SPG points devaluation has come. Earlier in this post I mentioned a couple of hotels where I used to frequently stay when they were SPG category 3 and now they are category 5 hotels. There are one hundred more hotels in SPG category 5 than in 2009. Some of these are probably new build Starwood Hotels. The change in proportion for SPG category 5 hotels increased from less than 12% of all Starwood properties in 2009 to 18% in 2015.
The higher rates for peak season dates are the major drawback of hotels in SPG categories 5 to 7. Check out Brazil, China, Singapore, Paris and Amsterdam for the impact of peak season dates, which means about four months of the year are higher rates at many of these higher category hotels.
Category 6 and 7 are for the high rollers of SPG. A normal middle class person who does not work manufactured spend on credit cards or have business account expenditures to accrue tens of thousands of Starpoints is unlikely to book many reward nights in the upper stratosphere of Starwood Hotels. These are the hotel categories where reassignment is common from year-to-year.
My advice is spend points when the category is low to get the category 6 hotel for 50% fewer points this year before it climbs to SPG 7 or wait for the SPG 7 to drop to SPG 6. Hotels in these two categories frequently change between SPG 6 and 7.
I have redeemed hundreds of thousands of Starpoints and never redeemed Starpoints for a category 6 or 7 hotel. Three years of SPG free night promotions and one year as an SPG Amex Star blogger is when I got my taste of category 6 and 7 hotels. The SPG Amex experience is the one that reaffirmed I don’t find real value in uber-luxury. I’d rather stretch my Starpoints out for many more nights when I need a hotel room in a place I am visiting.
Loyalty Traveler – 139 hotels down in Starwood Hotels award category reassignment March 4, 2014 For those of us in the USA, only 21 hotels dropped while 73 hotels went up in SPG award cost.
Loyalty Traveler – SPG award category reassignments March 5, 2013 (includes 266 hotels list)
Loyalty Traveler – Analysis of SPG Hotel Category Changes March 1, 2012
Loyalty Traveler – Starwood Hotels Category Adjustments for 2011 Effective March 1
Loyalty Traveler – SPG Annual Hotel Category Shift: Yearn to Burn (Feb 28, 2008) – this post shares my thoughts on the big rise of points cost for free nights at Starwood Hotels where I stayed in previous five years.