What is the Value of Starpoints from the Starwood Preferred Guest Program?
The Starwood brand encompasses the following 9 brands: Sheraton, Four Points, the W, Aloft, The Luxury Collection, Le Meridien, Westin Hotels, Element, and St. Regis.
Free nights start as low as 2,000 Starpoints for category 1 hotels (those hotels that routinely have their doors kicked in by the DEA). There are no blackout dates with Free Night Awards. The value of your Starwood points depends on several factors, including:
- The category (a rating which takes into account both the quality of a hotel and its location) of the hotel you stay at. Categories range from 1 (lowest) to 7 (ultra-high end death stars).
- The time of year you travel, as point requirements fluctuate to reflect on and off-peak seasons.
- Whether you are able to take advantage of special bonuses and incentives, such as the “5th night free” awards, offered by Starwoods.
The Starwood 50% Off Award
The “50% Off Award” lets you redeem Starwood points for a certificate that offers 50% off regular rack rates for a stay of up to five nights, exclusive of room tax, gratuities and service charges. Properties in Hawaii and the Sheraton Bahrain do not participate in this award. Unlike Free Nights Awards, 50% Off Awards are subject to blackout dates and availability of rooms at the time of reservation. Obtaining the 50% off certificate requires only 1,000 Starpoints, regardless of the category of hotel that you apply the certificate towards. There do seem to be significant limitations to the value of these awards, however. The three main complaints are:
- It appears many Starwood hotels may not accept them, or accept them only on a very limited basis.
- Limited availability of rooms
- Oftentimes the lowest available rate, which can be quite different than the rack rate, is either lower than the 50% off value, or much closer to it, so the savings in these cases won’t be nearly as large as one would hope for.
In light of these constraints, PlasticIQ has decided not to factor in the 50% award coupon into this analysis, though it is entirely possible that it could improve the value of Starpoints above and beyond what we’ve estimated below. Check out this FlyerTalk Forum for some more insights.
Fifth Night Free Awards
The “Fifth Night Free Award” is available when you reserve five consecutive nights at the same Category 3, 4, 5 or 6 Participating Property, and redeem Starpoints for the first four nights. The free night applies only to the fifth consecutive night within the same stay for which that award was ordered. If the reservation is modified to fewer than five nights or the guest checks-out before using the fifth night, then the free night is forfeited. There is no Starpoint refund or free night credit for any unused portion of a Fifth Night Free Award. We do include these awards in our value computation; see the Assumptions section below for more information.
Transferring Starwood Points to Airlines
You can also transfer Starpoints to over 30 airline frequent flyer programs, most on a 1:1 exchange rate basis. Additionally (and quite nicely), if you transfer 20,000 points, Starwood kicks in another 5,000 points—that’s a nice 25% value bump. Of course, PIQ will also estimate the value of this approach to see if it is more economically profitable than obtaining free stays. See Starwood’s Airline Partner List for more details.
Key Assumptions in Estimating the Value of Starwood Starpoints
Here are some of PlasticIQ’s key assumptions:
- According to our research, the average length of stay at hotels ranges between 2-3 nights. Thus, PlasticIQ assumes that only 20% of your travel will be for stays of 5 nights. Furthermore, we assume that for the other 80% of stays, they will be for an average of 3 nights. This enables PlasticIQ to calculate a blended average value of Starpoints, taking into account the 5th night free award.
- Furthermore, we assumed that 75% of hotel stays would be spread evenly between categories 3 through 5 hotels. 15% of stays would be at category 2, and 10% at categories 6 and 7. We assumed no stays at category 1 hotels (we actually had a great deal of trouble even finding category 1 hotels in their network).
- In terms of establishing a market price for these hotels, we looked up prices for Starwood hotels across most star points levels. These serve as the “market prices” to establish the dollar value per Starpoint. We considered 7 major US cities in our index.
- For transferring Starwood points to airlines, we analyzed the value of 7 well-known airlines (out of about 30). We felt that these airlines, for the most part, offered the best route coverage and would at least be approximately representative of the potential value of the airline component of this rewards program. When I quit my day job, I’ll analyze all 30. We also assume that you will transfer at least 20,000 Starpoints in order to earn the 25% mileage bonus.
- PlasticIQ applies a standard 5% non-cash penalty to our estimates.
| Category | Avg Starpoints/Night | Mkt Price | $ val/Starpoint | % of stays | Adj $ val/Starpoint |
|---|---|---|---|---|---|
| 1 | 2,500 | $80 | $0.0319 | 0% | $0.000 |
| 2 | 3,500 | $94 | $0.0268 | 15% | $0.0040 |
| 3 | 7,000 | $139 | $0.0210 | 25% | $0.0053 |
| 4 | 10,000 | $216 | $0.0229 | 25% | $0.0057 |
| 5 | 14,000 | $286 | $0.0217 | 25% | $0.0054 |
| 6 | 22,500 | $369 | $0.0174 | 5% | $0.0009 |
| 7 | 32,500 | $857 | $0.0263 | 5% | $0.0013 |
| Total pre non-cash penalty | $0.0226 | ||||
| Total post non-cash penalty | $0.0215 |
Using Starpoints for Frequent Flyer Programs
As mentioned above, Starwood’s Preferred Guest Program also allows you to use Starwood points to exchange for miles on 30 airlines. The table below highlights our valuation estimates for the 7 major airlines we included in the analysis. As you can see, Virgin Atlantic has the highest mileage valuation of slightly more than $0.02 per mile, but it’s important to note that from the US perspective, Virgin primarily translates to flying to London, so it’s quite limited. The highest valued global airline in the list, American Airlines, is valued at around $0.0151 per mile. Our all-in assessment of Starwood’s mileage transfer option, which takes into account usage of the various airlines based on mileage value and footprint of the airline, is $0.0152 per Starpoint. This is better than working directly through these frequent flyer programs, but not as good as the hotel option.
| Airline | $ value/mile post penalty | Starpoints Req’d for 1 mile | Post exchange $ val/mile | Value after 25% mileage bonus | % allocation | Starpoints post alloc |
|---|---|---|---|---|---|---|
| Virgin Atlantic | $0.0164 | 1:1 | $0.0164 | $0.0204 | 10% | $0.0020 |
| ANA | $0.0126 | 1:1 | $0.0126 | $0.0157 | 10% | $0.0016 |
| American Airlines | $0.0121 | 1:1 | $0.0121 | $0.0151 | 60% | $0.0091 |
| US Air | $0.0102 | 1:1 | $0.0102 | $0.0127 | 15% | $0.0019 |
| Delta | $0.0093 | 1:1 | $0.0093 | $0.0116 | 5% | $0.0006 |
| Continental | $0.0119 | 2:1 | $0.0060 | $0.0075 | 0% | $0.0000 |
| United | $0.0105 | 2:1 | $0.0053 | $0.0066 | 0% | $0.0000 |
| Total | $0.0152 |
Summarizing PlasticIQ’s Thoughts on the Value of Starwood Points
In the final analysis, when Starpoints are used to stay at Starwood hotel properties, they have a value of around $0.0215 per Starpoint. While Starpoints can be exchanged at (mostly) favorable rates for airline miles across multiple carriers, in general you will be better off using them for hotel stays.
Tags: Hotel, Hotel cards, miles, Starwood, travel, Travel cards, Value of points