Help me find a Solution...

[PaddyMac]

Ok, so I have been a reader of TUG for 6 years, unfortunately well after we purchased 3 x 2BR SVR at developer prices ranging from 1993 to 2008.

The DD keeps pressuring me to convert a week/year into Starpoints. Up to now I have been able to forestall the event as I realize just how badly the deal is.

We do not vacation 3 weeks a year generally, especially now with so many activities happening with our young children. Competitive soccer in summer, son is concertmaster for youth orchestra through the school year etc.

We use 2 weeks a year usually. However, we have taken advantage of SP points for large overseas hotel trips including Belgium this past summer for two weeks, Spain, Beijing, Disney Cruises (our own dime not on SP points) etc. These points all came from developer purchase bonuses and SP Amex collecting, never from conversions.

Now... however, we have one week a year that will not be used for I'd say 6-8 years until kids are gone. DD wants to convert 1 week per year for hotel trips. Hong Kong is next planned in 2 years, and Ireland/Scotland after that.

Are there any real options for that 1 week/year that makes sense monetarily? We have charged and rented it to friends/family, but in our experience that only happens infrequently.

I don't think an SVR week sells that well for rentals. So therein lies my problem. Any out of the box solutions, Im not thinking of? Your help is appreciated.

 

[SandyPGravel]

If your week is floating try to book either Christmas or New Year's week you might be able to re-coup your MF at SVR by renting it out. Problem with planning on converting to SP,besides the horrible return, is I think you can only convert to SP every other year. If that is still true you would have to rent out the week on the opposite years. Maybe the policy has changed as far as converting to SP, I am not sure because I have never done it.

 

[LisaRex]

You could use SOs to exchange to another VSE property (HRA, WKORV, SDO?) and offer up that week to friends and family for the cost of MFs. You could book a week at HRA, WSJ, or WKORV and offer it up for direct exchange to another resort that you/your friends/your family might want to use via the Classified ads here on Tug. You could deposit the week in II and allowing friends and family to exchange to somewhere else for the cost of MFs.

I believe all of these scenarios are allowed via VSE rules since you're not profiting from it. However, all involve some work on your part. Personally, if I wasn't going to use for the next 5+ years, I'd give the week away vs. the hassle of trying to find an owner.

 

[LisaRex]

Problem with planning on converting to SP,besides the horrible return, is I think you can only convert to SP every other year. If that is still true you would have to rent out the week on the opposite years. Maybe the policy has changed as far as converting to SP, I am not sure because I have never done it.

Since he owns 3 weeks, that shouldn't be a problem. He'd just rotate the VOIs to convert to SPs.

 

[PaddyMac]

As 3* elite, we can convert each week every year. 1 week is floating, 2 are fixed.

Is there a cheaper way to get SPs? I remember they used to go on sale once a year or so. We have an Amex and use it to collect etc. The whole purpose is to save enough SPs for overseas hotel stays, which have been beneficial when bonus SPs from developer purchases were factored in with point collecting. If I can show the cost is cheaper to buy them maybe that would work.

It seems like the answer is as I feared however. Barring, giving away the week (which DD would not want to do either), selling/giving the week to friends family or caving into DD wishes for conversion to points, there is no easy answer.

Booking Xmas or New Years may be an option, however only 1 week is 12 month out reservation, while 2 are 8 month reservations.

Does US Thanksgiving net a decent rental rate at SVR? Or any other major US holiday? Labor, Presidents, Columbus etc?

 

[VacationForever]

It is a no brainer for me to convert. Takes the stress out of trying to use the week or points/options. In fact I just converted my SVN 2017 weeks for Starpoints. I figure unless I get rid of it, it is better than trying to sweat over how to use my week or SOs. At this point, we have too many timeshare weeks and points and we are trying to get rid of most of what we have over the next few years. In the meantime I convert both my SVN (Vistana) weeks to Starpoints and Marriott to MRPs every year. They come out about breakeven but then after conversion, they give me lots of options to use, including flying first class - which some of them end up to be a great deal (from Europe to US and hotel stays in Europe).

 

[PaddyMac]

Our cost per SP point on conversions, MF/SP is 2.3 cents (USD) right now. According to NerdWallet, 2.3 is the standard valuation for points and they're purchased at 3.5cents as of Sept 2015. Can you buy points cheaper than 3.5 cents?

According to those numbers, converting our week to points isn't all that bad. This is for the two fixed weeks, the floating SPs are higher cost at 3.1 cents per SP. Hong Kong trip looks ok at these conversions. We typically like the quality of Sheraton/Westin hotels overseas in comparison to local brands and don't mind paying that premium. For 10 days in HK, it would be over $3000USD for Sheraton HK Towers. That same 10 days can be had for 94k points or just over 2 weeks on the conversion side equalling about $2000USD. When you look at these types of SP conversions, it is actually in our favour.

Maybe I'll convince DD only to convert for Euro/Asia trips.

 

[DavidnRobin]

Be careful with the fuzzy math.
They are sold for 3.5c/SP, but that does not mean that they are worth that price. They can be bought for less. Right now there is a program to buy at a 30-35% discount.

With SP devaluation - I would tend to value a SP to be more around 2c/SP (IMO, YMMV) - used to be 2.25c/SP (based on consensus) before devaluation.

Included in the value of SPs, can be the number you already own (if any), and the planned use.
The more you have - the less value they may have - which is tied to usage and importantly be aware that traveling costs money, plus have the time to travel - so time-money plays a role.

If you can exchange at 2.3 c/SP is not too bad - especially when alternatives are evaluated. Make sure you include associated fees in that calculated.

 

[PaddyMac]

Yeah, I wasn't valuing them at 3.5c/SP, that's what they are purchased for. NerdWallet and PointsGuy mention 2.3-2.5c/SP valuations. My cost of 2.3c/SP was MF/SP but did not include the cost of conversion at 3* which is another $79 I believe. That's per week redeemed, right?

On my SPG.com account at the moment it mentions a 25-50% discount on SPs till Dec 30. 50% would make their cost at 1.75c/SP which is decent. I've never purchased them online before and would only consider doing so at a discount that places it in the area of the consensus value.

Does anyone know if those discounts are.. the more you buy the better the discount? Would you have to buy your allowed maximum of 30k points just to get the 50% discount?

 

[okwiater]

On my SPG.com account at the moment it mentions a 25-50% discount on SPs till Dec 30. 50% would make their cost at 1.75c/SP which is decent. I've never purchased them online before and would only consider doing so at a discount that places it in the area of the consensus value.

Does anyone know if those discounts are.. the more you buy the better the discount? Would you have to buy your allowed maximum of 30k points just to get the 50% discount?

This is a "mystery bonus" wherein you are offered Starpoints at a discount between 25-50%. You don't get to choose the discount amount. Any offer to buy SPs at around 2 cents is a good deal, as most people can redeem for at least that value pretty easily.

 

[DavidnRobin]

Point above regarding SP value may be dependent on how many SPs owned...

Buying 10K SPs (at 2c/SP for example) when already owning 50K SPs, is different than buying 10K SPs when already owning 500K SPs (unless for some reason you need 10K SPs to get to 510K SPs)
DUCY

 

[okwiater]

Point above regarding SP value may be dependent on how many SPs owned...

Buying 10K SPs (at 2c/SP for example) when already owning 50K SPs, is different than buying 10K SPs when already owning 500K SPs (unless for some reason you need 10K SPs to get to 510K SPs)
DUCY

I would argue it depends less on how many SPs owned, and more on your rates of SP earn and burn. Someone with 50K SPs who plans to travel 1x per year for 5 nights to a Cat 4 Westin property is a much different case than someone with 500K SPs who plans to travel 4-6x per year for 5-10 nights in Cat 6 & 7 W and St. Regis properties.

But your overall sentiment is correct.

My recommendation to avoid heartburn over these sorts of things is to simply pick a currency value for SPs (mine is 2 cents), and to earn/buy them at a rate lower than that, and redeem them at a rate higher than that. I don't sweat whether my redemption was 2.5 cents per SP or 8 cents per SP because I know they've all been acquired for 2 cents or less. I treat it as a form of currency arbitrage.

Note also that I never engage in "fuzzy math" WRT SP redemptions. For instance, if I redeem for a first class ticket that I would never have paid for in cash, I don't treat the redemption as "worth" the price of the ticket. Instead, before buying, I always compare my redemption to the cash price of what I would have actually bought.

 

[tperez]

We've found that if we analyzed on a cost per point basis, there are some values out there particularly in the Starwood category 3 & 4 properties where you can book 4 nights and get an additional night free. We just returned from a 10 night stay at the Westin Kyoto which cost 80,000 SPG points. This is a little less than the conversion of a week at KOR. If you're SPG platinum, then you'll also get two free breakfast buffets each morning, which ran $30 each and best of all, the appetizers and all you can drink (not just beer and wine but good stuff: Johnnie Walker, Bombay Sapphire, Sake, etc.) in the lounge each night! We also did 10 nights at the Westin Mammoth Lakes, which was 96,000 SPG points so a little more than a KOR week, and 10 nights at the Element Times Square, which also went for 96,000. (As an aside, both the Westin Mammoth Lakes and the Element have kitchens.) As mentioned above, the value is increased if you travel more and qualify for SPG platinum or gold. For all 10 nights in Mammoth Lakes we were upgraded to a one bedroom suite and in Times Square we got a corner room and again, free breakfasts.

FWIW, we typically don't do the point cost analysis because, as okwiater mentioned above, we never would have paid cash for most of our stays anyway. There are some occasions, such as when looking at airfare or visiting family, when we do a cash vs SPG cost comparison, but those are rare. Typically we'll just ask ourselves something like "Would we get as much pleasure spending 10 nights at the Kyoto Westin as we would in our KOR 2bd week?" If yes, we just book and go. We are KOR pre-construction purchasers so we've been with SVN for a while. Every year we convert something to SPG points and as we've built our portfolio up, we've been converting more each year. What I think is difficult to value and factor into a financial analysis is the value of the option of how you can use your ownership. (No, I don't work for SVN, never have... never will!) For us, we have a limited pot of vacation dollars and with that pot, we want the option of getting preference for booking in KOR (we've been upgraded to ocean front a couple of times) or if we choose on a particular year, being able to go somewhere else in the world. With our timeshare weeks we get that and its hard to assign a $ per point value to that option.

 

[DavidnRobin]

I never claimed the amount of SPs owned was the main consideration. Also, seems to confusion between Spend and Buy.

On the Spend side - of course optimizing the SP Spend is the main consideration. But, that is also a soft number and leads to the use of fuzzy math (as above) due to extrinsic value of the SP Spend. Which is common amoung SP users.
On the Buy side (my point) - a main consideration is the cost of the SPs. However, this cost is related to need. Why buy them if they are not needed - even at a good price because holding them cause a loss in value over time (devaluation).

Even if a Buy of 2c/SP is considered the right price point - the number of SP owned (and needed) is a key consideration.

 

[okwiater]

I never claimed the amount of SPs owned was the main consideration. Also, seems to confusion between Spend and Buy.

On the Spend side - of course optimizing the SP Spend is the main consideration. But, that is also a soft number and leads to the use of fuzzy math (as above) due to extrinsic value of the SP Spend. Which is common amoung SP users.
On the Buy side (my point) - a main consideration is the cost of the SPs. However, this cost is related to need. Why buy them if they are not needed - even at a good price because holding them cause a loss in value over time (devaluation).

Even if a Buy of 2c/SP is considered the right price point - the number of SP owned (and needed) is a key consideration.

I think we're saying more or less the same thing. I was highlighting the fact that SP purchases should be based more on earn and spend considerations than on the balance in your account. Of course, your SP balance is part of that equation, but 500K SPs is not an objectively "high" or "low" balance -- it's just a balance. Whether it's high or low depends on your SP usage patterns.

My only other quibble is that SP spend is not necessarily a soft number if your travel plans are inelastic and you will spend one form of currency or another no matter what. In that case, SP is a form of currency like any other, and although it can be devalued over time, so can any currency. Whether you should "stock up" on SPs and how many you should buy is a function of whether or not you can buy them for less than their redeemable value (arbitrage) and your confidence level in the future value of the currency.

 

[DavidnRobin]

I think we're saying more or less the same thing. I was highlighting the fact that SP purchases should be based more on earn and spend considerations than on the balance in your account. Of course, your SP balance is part of that equation, but 500K SPs is not an objectively "high" or "low" balance -- it's just a balance. Whether it's high or low depends on your SP usage patterns.

My only other quibble is that SP spend is not necessarily a soft number if your travel plans are inelastic and you will spend one form of currency or another no matter what. In that case, SP is a form of currency like any other, and although it can be devalued over time, so can any currency. Whether you should "stock up" on SPs and how many you should buy is a function of whether or not you can buy them for less than their redeemable value (arbitrage) and your confidence level in the future value of the currency.

FWIW, I was responding to the OP (post #7) about the SP Buy costs, and the considerations around amount owned and money & time allotted to vacation spend.

It is a soft number when comparing between individual needs - when people to state what great value was attained and then make a comparison - that number becomes fuzzy (variable) because there is both an intrinsic value (easy to define - as you showed - often related to business and not vacation - as vacation is voluntary) and an extrinsic value (the fuzzy part and very vacation-need specific).

I mentioned it had to do with SP need - in the instance of needing another 10K (at 2c/SP = $200) when one has 500K ($10,000) because one needs 509K for hotels/flights/etc where 2c/SP makes it worth it - fine. However, I would question purchasing 10K SPs (with no direct need) when that could be easily had for 1% and you get something tangible in return (e.g. shopping with AMEX SPG, etc.) - plus, they devalue substantially given enough time. And even more devaluation with the 3:1 conversion to MR points (IME, and general consensus) - of course there are instances where conversion has positive value (due to variability in usage).

For purchasing SPs, the max cost is is 3.5c/SP, but it also has a bottom (1c/SP) that is a 1% cash back comparator at a basic CC rate, and that can come with something tangible.

IMO YMMV (and likely does)

 

[PaddyMac]

I try to stay away from the fuzzy math comparisons as well. We do Orlando twice a year generally and a major overseas trip every 3-5 years. Time has lengthened somewhat with having to pay for children.

The crux of my original problem was about the value of converting to SP points as it specifically relates to a trip to Hong Kong that we are planning for 2018. We'll need 2 rooms and want to stay at Sheraton Towers Hong Kong, because it is 'downtown'. If I can convert at 2.3c/SP and spend them at that hotel for more, it makes sense to me. This is an actual trip in a hotel we would normally use (no fuzzy math here so far).

But part of the original question dealt with the long term conversion to SPs and its value. We tend to do smaller trips every year, weekend getaways to places around CA/US and use SPs to do it. Can this be done cost-effectively? It seems like the answer at that 2.3c/SP cost is: 'if I am careful in choosing hotels and do not let the points sit too long'.

 

[VacationForever]

I try to stay away from the fuzzy math comparisons as well. We do Orlando twice a year generally and a major overseas trip every 3-5 years. Time has lengthened somewhat with having to pay for children.

The crux of my original problem was about the value of converting to SP points as it specifically relates to a trip to Hong Kong that we are planning for 2018. We'll need 2 rooms and want to stay at Sheraton Towers Hong Kong, because it is 'downtown'. If I can convert at 2.3c/SP and spend them at that hotel for more, it makes sense to me. This is an actual trip in a hotel we would normally use (no fuzzy math here so far).

But part of the original question dealt with the long term conversion to SPs and its value. We tend to do smaller trips every year, weekend getaways to places around CA/US and use SPs to do it. Can this be done cost-effectively? It seems like the answer at that 2.3c/SP cost is: 'if I am careful in choosing hotels and do not let the points sit too long'.

Try JW Marriott at Pacific Place in HK instead. I assume you have SPG gold, convert the SPs to MRPs, and you get fabulous food and drinks all day at the lounge all day... Conversion rate is great (SPs = MRPs) and JW Marriott is one of the best hotels that I have stayed in HK and I have spent 100+ nights there.

 

[okwiater]

But part of the original question dealt with the long term conversion to SPs and its value. We tend to do smaller trips every year, weekend getaways to places around CA/US and use SPs to do it. Can this be done cost-effectively? It seems like the answer at that 2.3c/SP cost is: 'if I am careful in choosing hotels and do not let the points sit too long'.

That's exactly right. If you know your cost will be 2.3 cents, then perform some rough calculations regarding how many you will earn/convert versus how many you will use over a given period of time, with the assumption that you will only redeem them at a value of greater than 2.3 cents and for stays you would've otherwise paid for in cash. This exercise will provide you the answer regarding the conversion and/or purchase of additional SPs.

 

[duke]

TPG - The Points Guy has just published his valuation of what points are worth.
SPG point are worth 2.7 cents.
Looks like this valuation came from Marriott points worth 0.9 cents X 3 conversion ratio.
http://thepointsguy.com/2016/12/december-2016-monthly-valuations/