Can anyone tell me the cash value of Starwood Points?
StarOptions or StarPointsCan anyone tell me the cash value of Starwood Points?
The Points Guy values StarPoints at 2.7c.
No. It's actually listed at 2.5c, which is an increase this month from 2.4c.
http://thepointsguy.com/2016/01/january-2016-monthly-valuations/
I am surprised that TPG would state that SPs are worth buying at 2.5c/SP.
Besides... I recall the redemption value for SP conversion to FF miles is ~1.3c/SP.
I have redeemed SPs for more than 9 cents apiece ($1,100 vs. 12K points), but generally value them closer to 2.5-3 cents. I do plan on buying a few hundred thousand at 1.9 cents apiece later this year, but would balk at much higher than that.
Not sure how this is relevant other than as yet another possible way to suggest that use of points at hotels is greater than airlines.
I just recently purchased 200,000 SP's for $3,800, or about $.02 per SP. I converted them to 300,000 AA miles when AA had the 25% promotion, and book 4 R/T tickets from Chicago to Australia. The cheapest R/T airfare was $1,900 each, so I save about $3,800 by using the SP's
I also use my SP's to book Starwood property during high season. For 48,000 SPs, or about $960, I get 5 nights at Westin Riverfront which is worth at list $2000.
To this point - if you put a cash value onto something that you would not normally spend the cash on - then fuzzy math comes into play. A great use of SPs is to use them for things that you not normally pay for.
example - we stayed at the Westin Paris (upgraded room) on SPs - the cost of the room (w/ Euro-USD differences, and taxes, etc) was >$1000 per nite (based on this - the SP value was something like 8s/SP). However, I would never have spent $1000 nite to stay there (heck I wouldn't even spend $400/nite). So using a cost of $1000/nite to calculate SP value is misguided and misleading.
But, SPs do allow us to stay in places we would not normally pay to stay - however, that in itself has extrinsic value
I keep it simple by "choosing" my own valuation based on typical redemptions I actually use, and then purchasing when below the threshold and spending when above the threshold (arbitrage opportunities, essentially). For me, that threshold is currently 2 cents.
If it turns out that I have many more opportunities to purchase than I have opportunities to spend, then I can tweak the valuation down to bring it back into equilibrium (or vice versa).
This seems to work out pretty well and ensures that I don't have to resort to fuzzy math nor end up with unmanageable Starpoint balances. It also makes the FF redemption calculations simple. For instance, I recently spent 50,000 miles on a business class round trip ticket which cost $680 in economy (which is what I would have booked otherwise). Those miles cost 40,000 Starpoints which I have valued at 2 cents apiece = $800. So, for an extra $120, I am able to travel business class which includes complimentary baggage (saving $50 -- not fuzzy math) and onboard food & beverage. That's worth the extra money. However, if the economy ticket had been $500, the calculation would have likely ensured that I used cash instead of miles to book.
This is an excellent point, and is another reason why it makes sense to simply choose a valuation and weigh all cash vs. points decisions based on simple -- not fuzzy -- math.
Yes, I have redeemed 12K points for an $1,100 nightly room; however, I did not "trick" myself into thinking that I got 9 cents of value out of every point. Instead, I simply calculated that I was paying $240/night for the room (at 2 cents per point) and since I was comfortable with that we stayed there.
Over time Starpoints increase in upfront cost: lowest I have seen it was 1.9 cents per point in offer from Starwood. But the other factor to consider is the point values at hotels. These have increased over time as well. A hotel in Venice in 2010 was 10 K per night. Now it is 16K. Our favorite Aloft at PDX was 4K, and now 7K.