StarPoints - Not a good excuse to buy from developers

[jhm40cu]

Hello.

When I got my Westin Kanaapali North, StarPoint was a main reason for me to buy from developers. For staying in Asia, I cannot make a trip to the US mainland or Hawaii every year. For me, having privilege to convert to StarPoints WAS a great deal even after paying over $1700 MF.

The reason was quite simple: A lot of nice SPG hotels in SE and NE Asia were in lower SPG redemption categories (Category 1, 2, and 3). At some nice Starwood hotels in China or Malaysia, for example, we had to pay $220 a night, but we could stay there for 7000 SPG points or less (And 5th was free if stayed 4 consecutive nights). That made my T/S purchase from a developer a good buy even at the expense of paying $20K more. Why? When I did the math, 80,000 SPG points would worth around $3,000 if I stayed at SPG hotels in Asian Pacific (ex Japan) regions

Guess what? I learned that Starwood jacked up the redemption categories for many hotels in Asian Pacific regions this year. I call this StarPoint inflation. As a result, the purchasing power of my StarPoints decreased dramatically. In addition, the merit of converting to StarPoints will diminish every year as MF will increase at minimum of 5% annually.

So, here is the lesson I learned.. hard way. If you want to buy Starwood T/S from developer because of StarPoints privilege, think twice!

 

[tomandrobin]

The starpoint system is a big issue with the Starwood timeshares. Inflation does not have an effect on Staroptions, but Starpoints it does. Becuase of the constant devaluation of currency, Starwood needs to keep uping the starpoint requirements of the hotels to feep up with inflation. The damage that is being done to the timeshares owners is those starpoint conversions are fixed and eventually will be worth nothing. This is one of those short sited problems, that at the moment of thier conception seemed like a good idea. Too bad no one thought about the effect of inflation in 15 years. This is the same problem we have with the AMT tax code. When it was written, they forgot to adjust the tax for inflation. So instead of just catching the super rich, it will catch about 1 in 5 tax payers in 2 years.

 

[LisaRex]

Yup, you learned the hard way what others found out after the first major StarPoint devaluation about 2 years ago: Starwood doesn't adjust the StarOption:StarPoint conversion to keep up with inflation. Those MFs will go up every year without fail, but the conversion ratio to hotel points and/or airline miles remains static. End result is a negative correlation so that as the value of converting goes DOWN, the MFs go UP. I feel really badly for folks like you who bought thinking that it would be a constant correlation. But I do appreciate you taking the time to warn others so that they can make an informed choice.

 

[pointsjunkie]

i am one of those pie in the sky ( bought many ts from the developer) persons who still loves the option to convert to starpoints. just did it today in fact. i guess i don't look at the same way as many of you. i have hundreds of thousands and i use then to go to places where they have no timeshares. and i use them for mini- vacations. yes i understand they have been devalued but what in today's world has not? even with all that i have i still use them prudently. i love the idea that i will never have to pay for a hotel again(as long as it is starwood)forever. saving for a great to trip to italy in 2010.

 

[LisaRex]

i love the idea that i will never have to pay for a hotel again(as long as it is starwood)forever. saving for a great to trip to italy in 2010.

Except you are paying for them. It's a roundabout method (via MFs), but you do pay for them. And since you are already committed, then you should squeeze them for all they're worth, sister!

But we're trying to caution folks who AREN'T committed yet that the conversion rate is so poor that you'd be better off paying for the hotel rooms/airfare out of pocket than to pay for them by converting StarOptions. Because the value is already low and will only get lower as time goes by.

 

[stevens397]

Hotel point devaluation is inevitable. I wrote to Starwood about a year ago and stated that I well understood the need to adjust. But we people who bought timeshares from them really bought a concept and that the only fair thing to do, over the years, is to adjust the number of Starpoints our units could convert to. Makes sense, no?

Got a few letters back saying they know it's a problem and they're working on it. Thankfully, I'm cynical enough that I didn't hold my breath - I'd be dead by now!

 

[Henry M.]

I wouldn't buy a timeshare just to get Starpoints, but I do find the Starpoints a valuable alternative when I can't use my vacation interval. A lot has to do with where I travel. I get enough value out of Starpoints (even after the latest devaluation) to make conversion a viable alternative to trying to rent out the unit. It is not as good as renting out, but a lot less hassle, and worth more than the maintenance fees. It can be worth much more than the maintenance fees with the suite upgrades I get due to my SPG status. I get at least $0.03/Starpoint and often more like $0.05 or more.

For sure a hotel room doesn't compare to a timeshare in terms of comfort. However, there aren't always good timeshares available where I travel and the cost of a hotel room for a few days can be more than the maintenance fees I pay for the unit or the rental income that I can expect to get. Just on a pure $ sense Starpoints can be a reasonable option (though not the sole justification to buy a timeshare and probably not enough to pay several tens of thousands $ extra to buy from the developer).

It is not good to accumulate too many Starpoints and "bank" them. They do lose value over time. Thus, if you are not going to be using Starwood hotels often you should be careful in your valuation of Starpoints. They are not a panacea, but they are also not terrible. There is no single answer as to their value. Your travel patterns will determine the value to you, which will not be the same as the value to the next person.

 

[DavidnRobin]

i am one of those pie in the sky ( bought many ts from the developer) persons who still loves the option to convert to starpoints. just did it today in fact. i guess i don't look at the same way as many of you. i have hundreds of thousands and i use then to go to places where they have no timeshares. and i use them for mini- vacations. yes i understand they have been devalued but what in today's world has not? even with all that i have i still use them prudently. i love the idea that i will never have to pay for a hotel again(as long as it is starwood)forever. saving for a great to trip to italy in 2010.

making a silk purse out of a sow's ear...

While you are finding benefit - as we all try to do based on our priorities - knowing what you know now... would you buy directly from SVO in order to get the SO-SP conversion benefit?

Looking at the difference in resale price (large savings over SVO purchase) - and the annual MFs - it is very hard to justify upfront.

 

[myip]

making a silk purse out of a sow's ear...

While you are finding benefit - as we all try to do based on our priorities - knowing what you know now... would you buy directly from SVO in order to get the SO-SP conversion benefit?

Looking at the difference in resale price (large savings over SVO purchase) - and the annual MFs - it is very hard to justify upfront.

I will do it only if I requalify and upgrade the unit... No way am I going to pay the retail price for 1 unit. I also analyze which SVO unit with low maintenance and high starpoints ratio - like Lakeside Terrace. --

 

[LisaRex]

Just as an example, I've seen ocean fronts at WKORV as low as $45k resale. The developer is asking, what? $95k now? That $50k can outright buy a lot of hotel rooms, flights AND suite upgrades. Or, if I really, really wanted StarPoints, I could purchase 1.5 MILLION of them for that price (albeit not all at one time).

I'm honestly glad that folks that bought from the developer are enjoying their purchase with no regrets. Unfortunately, some people feel duped by the whole devaluation thing. So just as I wouldn't advise anyone to buy a single unit at a mandatory resort from the developer, I also wouldn't advise anyone to pay an extra $30, 40, or 50k just for the privilege of converting StarOptions to StarPoints at a rate that barely beats what you could buy directly from Starwood's website. At the very least, I think making people aware of the implications of devaluation will ensure that folks who do decide to buy from the developer do so with their eyes wide open.

I consider it my duty as a Tugger.

 

[SDKath]

Ditto what Lisa said.... Katherine

 

[DeniseM]

i am one of those pie in the sky ( bought many ts from the developer) persons who still loves the option to convert to starpoints. just did it today in fact. i guess i don't look at the same way as many of you. i have hundreds of thousands and i use then to go to places where they have no timeshares. and i use them for mini- vacations. yes i understand they have been devalued but what in today's world has not? even with all that i have i still use them prudently. i love the idea that i will never have to pay for a hotel again(as long as it is starwood)forever. saving for a great to trip to italy in 2010.

Hi Barbra - I know you've posted this before, but do you mind telling us what your total purchase price was and what your yearly MF's are, to get to 5 Star Elite?

Thanks!

 

[pointsjunkie]

i bought 3 directly from the developer prior to TUG and then 4 on resale and 2 more developer to requalify two. spent around $110000 and pay $7700 in MF's per year so far. i rented out units to cover all MF's this year. went on a vacation per month, gave time to make a wish and still converted 2 units to starpoints. so from where i am sitting it is working well for me.

and if i would do it over, the first one would be directly from the developer(pre-construction harborside) and the rest i would have bought resale and then requalified them.

if i had bought them all from the developer it would have cost me $36000 more.

my dh only bought because we had the option of converting to starpoints, he liked the idea of not having to vacation every year(little did he know), in case work kept him from vacationing.so now he goes away 4 times a year.

barbra

 

[tomandrobin]

Barbra

Are all your units two bedroom lock-offs?

Tom

 

[pointsjunkie]

no, 2 at svv are l/o.2 at hra isa l/o. 2 at svv regular 2 br and all the rest are 1 br's.

 

[tomandrobin]

Is your HRA phase 1 or phase 2

 

[pointsjunkie]

the unit is in phase 1. we upgrade to the 3 br in phase 3.