Yesterday the miles and points community collectively threw virtual tomatoes at the Starwood Preferred Guest cash and points award chart changes.  Some believe they are bad, but potentially not terrible due to alleged increased availability of cash and points redemptions from hotels.  And some think they are bad enough to warrant leaving the SPG program, cancelling SPG co-branded credit cards, and emptying out all SPG points immediately and permanently.  I do not like seeing awards get more expensive, but while this change makes cash and points redemptions about 20-25% less valuable (factoring in the increases in both points and cash components), I think some miles and points junkies are missing one of the main points of cash and points redemptions in general.

One of the big benefits of cash and points redemptions for the average points collector is that it stretches out how far your SPG points can go.  Some lucky travelers/heavy SPG credit card users have hundreds of thousands of SPG points and they can pay for lengthy trips either at the standard award rate, or via cash and points.  However, most of us have substantially fewer points, and don’t always have the luxury to pick and choose between all the various reward options.  For those of us with less impressive SPG point balances, cash and points reservations not only give us a good value for our points, but they also allow us to stretch our points much further over a greater number of nights.

While I have still find some cash and point options at certain properties, I have found decreased availability over the last 12 months in general.  I am clearly a very small sample size, but I have heard similar reports from others.  So, if many of us were unable to make cash and points reservations when/where we wanted, then it didn’t matter how good of a deal they were – we couldn’t regularly use them.

According to SPG Insider, Our intent with these changes is simply to make more Cash & Points rooms available. We’ve worked very closely with our hotels, and between the pricing changes and additional options (room types and hotel categories), our goal is more Cash & Points availability for you. We’ll look forward to your feedback again after the changes are live.”

I may be naive, but given the relatively low availability of cash and point in recent months, and the reality that the rates had not changed since they were introduced, I believe this may be true.  The hotels must not have believed their return from the SPG program was worth renting out a room at the cash and points rate in most cases.  Of course this is a crummy change if you were still having luck getting the cash points reservations you wanted, but if you weren’t getting them anyway then this change isn’t life altering.  I would say the change is no worse than neutral if availability actually increases, but of course we won’t know that until after March 5th.  I’m also quite curious to see how the cash and points suite redemptions play out.

I am going to see if there is any cash and points availability for destinations I am interested in before the March 5th change-over, but if not then I will see what happens after that date before making a final judgement.

Posted by Mommy Points | 21 Comments

21 Responses to “Why SPG Cash and Points Are Still Worth It”

  1. You and I are on the same page! I just posted my analysis of how much better availability will need to be in order to “break even”: http://www.foodwineandmiles.com/2013/01/let-me-show-you-why-starwoods.html

    Let’s hope we see a big enough increase!

  2. rick b says:

    I’ve had zero use for my SPG points because like all normal people, I travel during times when most other people travel, because I have to actually work for a living. Good luck finding a suitable cash+points deal in those times. So I can get the theoretical 2.5-3 cent redemption value.

    The only ones whining are the “professional travelers” who have the luxury of going on a trip with 1 weeks notice, in first class, and find whatever cash+points award they want in low season. They shouldn’t be blogging on here anyway, imho, because they in no way represent the general public in how many points they accrue and how they can redeem them.

    • mommypoints says:

      Rick, yeah the realities of someone who can pick up with 48 hours notice and jump on great redemptions is not the life most people lead, so real availability is important.

  3. Initially I was very annoyed by the increase, and I will admit that it quite negative whenever a devaluation occurs.

    However, the devaluation is not as bad as first predicted by myself and other commentators. Two essential facts lessen the devaluation:

    1. We earn 3-6x (depending on status) per $ spent at Starwood.

    2. Inflation increases prices of hotel stays and other items (if using SPG AMEX).
    As a result, we should expect “devaluation” over the years on any program that is $ based. If they don’t “devalue” the redemptions, they will lose even more money.
    I still hate it, but it is likely a necessary evil in any program that is dollar-based.

  4. caveman says:

    @ rick b. Very well said. I second your opinion 100%. I find their blogs very useful but at the same time I am leagues away from how I (can) spend my points and miles with family during peak school/college vacation times and in general high season. Since I am (almost) never alone so finding a business class well ahead of time is like hitting a jackpot

  5. rick b says:

    caveman — I would even go to say a lot of those trip reports are very misleading, since they lead new readers to believe that you can just mint points by the millions every year, and use them to fly somewhere for 2 days on a whim, just to “try a new product” as they like to put it. That’s a pipe dream for those who don’t get paid to fly around for business or as “travel consultants”.

    • mommypoints says:

      Well today we are heading on a trip (on points) planned months ago, so hopefully you get a good dose of all kinds of travel as you make your way around the blogosphere. ;)

  6. Great Post, increased availability does have value.

  7. David says:

    I’m excited to see what kind of availability there will be for upgraded rooms and suites on C&P.

    I find these new C&P rates doable, and as someone who’s lost their SPG Plat status, I would be more apt to make a reservation if I could confirm a better room, or in some cases, a room for 3 adults.

  8. Jack says:

    @mommypoints “I may be naive”

    Probably. Time will tell, but that justification about increased availability from SPG just sounds like marketing rhetoric to me.

  9. George P. says:

    Devaluation is real. I generally tend not to give the benefit of the doubt to the corporations. Time will tell if increased availability of C&P will go far enough to soften the pain of the devaluation. Of course SPG points are still valuable but…just not as much:-)

  10. bluto says:

    I agree with Jack. I don’t think this is a net positive, and I’m a little surprised to see that SPG’s positive spin is being successfully received.

    • mommypoints says:

      Bluto, I just think we don’t know yet if it will really be bad or will be more or less neutral w availability increase.

  11. Nick says:

    Take this scenario which I find quite common, it may not be typical but I could list a few properties. There are plenty of these in Europe.

    Cat 3 property for lowest standard rate of $190. Old scenario cash and points was $45 + 2800 points. That means ignoring taxes your points are worth 5.2 cents per point. New scenario is $55 + 3500, your points are worth 3.8 cents per point. That’s much more than a 25% decrease in value & closer to 40%.

  12. Rich A. says:

    Devaluation is ALWAYS bad!

  13. Lively says:

    I tend to react like Rich A.

  14. thanks for the post MP, this is a great analysis of the recent devaluation of C+P

  15. RQ says:

    In many cases, it doesn’t matter how much more available it gets, because it won’t be the best option. What Food Wine and Miles is missing in his math is that many times cash will now become a better option

    Take Category 4 – the best “value” for C&P. If he values points at 2.5 cpp, then he’s essentially “paying” $200 per night for a category 4 room. Factor in not getting Starpoints, and a category 4 room would probably have to cost more than $225-$250 a night for C&P to be worth it depending on promo

    If it costs less than $225 a night (and most cat 4’s do), it doesn’t matter if it is 10% available, or 100% available

    And if a category 4 costs more than $250 a night, odds are it’s uber-high season and C&P won’t be available before or after the devaluation

    That’s just an example with the best value for C&P. It’s even worse for other categories

  16. Archon1995 says:

    My personal experience says cash+points are more widely available now. That makes it easier for those like myself who may take years to earn enough points for a free night, to redeem our points. The Starpoints value for (generic) you may be decreased by the change, but for *me* it has gone up because now I *can* use them more easily.

    I recently moved from Seattle to Atlanta, and I searched the entire route I drove for cash+points availability. Not one, and I didn’t have enough for a straight up free night even at Cat 1 properties. Tonight I checked and came up with three cash+points, one of them in a city where I paid cash for a night. Given the opportunity I would have paid the 1600+$30+taxes I see to stay at the Sheraton Denver Tech Center, instead of what I did pay staying somewhere else.

  17. […] bloggers such as ThePointsGuy and MommyPoints state that the change is not too bad.  I disagree, the change to the program devalues the SPG cash […]

  18. […] The best summaries I read were from View From the Wing, Loyalty Traveler and Mommy Points. […]

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