Starwood Points - Cash Value

[tomboyblu]

Can anyone tell me the cash value of Starwood Points?

 

[SandyPGravel]

Can anyone tell me the cash value of Starwood Points?

If I remember correctly it cost about $35 to buy 1000 points.

 

[tomboyblu]

I have the option to purchase 50,000 Points for $1075. I think they actually send me a letter lowering that price even further. Just want to know if its a good deal

 

[SMHarman]

Can anyone tell me the cash value of Starwood Points?

StarOptions or StarPoints

StarPoints cost 3.5c to buy. But the comparison is better to the 1-2c on a cashback card.

StarOptions cost vary across the system. Those from HI and Bahamas properties are expensive. Those from Off peak weeks are expensive. Those from peak St John, AZ and MX resorts are cheap.

 

[tomboyblu]

My questions is just regarding Starwood Points....not Options.

 

[Ken555]

The value of StarPoints varies based on how effective you use them, which was SMHarmon's main point. It all depends where and when you plan on using them. If you don't have a plan, it's likely not worth buying.


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[shade]

The Points Guy values StarPoints at 2.7c. Personally, I have judiciously used them and got 3-5c in Europe. Just finished 5 days at Phoenician in Scottsdale for 48,000 StarPoints for about $1700 of room costs. Got reservation before devaluation last March. Be selective using points in high season and you can get great value. I have never purchased miles though. Better just to earn through spending.

 

[DavidnRobin]

I am surprised The Points Guy would put them at 2.7c/SP.

There is a large FlyerTalk thread on the topic of 'value' of SPs.
http://www.flyertalk.com/forum/star...8302-faq-how-much-starpoint-worth-2007-a.html

Of course, one wants to maximize value in using SPs which is highly variable (and confounded) - thus often used by SVO Sales (aka fuzzy math)

The biggest aspect that is often lost in regards to value (which Ken brings up) is dependent on the number already owned, and the need for them. Importantly, they devalue over time - therefore, holding them is not a good idea.

e.g. - 10000 SPs has more value to someone with 100K SPs versus a million SPs.

IMO - they have a value of 2.25 c/SP - but I would not purchase them at >1.3c/SP (based on my needs)

The point is - 'one size does not fit all' when it come to SP value.

 

[Ken555]

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/




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[Ken555]

FWIW, I just made a reservation for later this year for one night and the cash price (after tax) for the least expensive room (AAA rate) is $252 yet it's only a Cat 2 hotel so the per point value is $0.063. I suspect the rate will lower before I visit but if not it's likely to be among the highest value nights I've ever redeemed at SPG for a US hotel. Still, even at the more reasonable ~$130 for this particular hotel, it's still $0.033 per point.

 

[DavidnRobin]

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.

Would TPG pay the same price if they had none vs. 1 Million SPs? I doubt it unless immediate need for more SPs than 1MM

We probably all can give examples (using fuzzy math) of SP use at >5c/SP. I have had some great redemption value both in US and EU.

Thus, the rub...

 

[okwiater]

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.

 

[Ken555]

I am surprised that TPG would state that SPs are worth buying at 2.5c/SP.

I think there is a difference between our value of the points vs what we would pay for them. Some of us wouldn't pay at almost any price.

Besides... I recall the redemption value for SP conversion to FF miles is ~1.3c/SP.

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.





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[Ken555]

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.

9% is fabulous! Congrats. If I needed more SPG points and had a plan for using them where there'd be a savings when redeeming them then it would make very good sense to buy.

I agree with you, 2.5-3c is more the norm than not. And, this is another reason why I just switched much of my credit card earnings to another program that has similar redemption rates but for less expensive hotels, which effectively offers greater number of free nights for the same earning.


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[DavidnRobin]

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.

Because SP value should include all sources of value, and redemption for FF miles is one of them. Of course, the cost of flight adds to the fuzzy math calculation.

e.g. I converted 80K SPs to AA FF miles last summer with the 25% bonus offer, then turned around to use some of the AA miles for 1st class seats STT-SFO at 30K pp OW) which would be expensive using cash (not that I would pay cash for 1st class seats...). Now, I could have gotten better redemption value, but needed SFO-STT tickets, and had no immediate use for the SPs. Lots of fuzzy math there...

 

[Sicnarf]

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

 

[DavidnRobin]

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

Good value of course, but would you have bought 200K SPs if you already had the SPs needed for the flights/hotel stays? the point of some discussions here...

The value (buy/use) of a SP is based on many factors, but one must be careful in overvaluing SPs based on best-case scenarios. There is a reason the consensus value is 2-2.5c/SP.

 

[Sicnarf]

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.

 

[okwiater]

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.

 

[DavidnRobin]

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

 

[okwiater]

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

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.

 

[DavidnRobin]

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.

of course - it is not all fuzzy math - and certainly subjective.

we can all list of our great SP usage savings - I have many examples - but that wasn't the point. The point is to make sure you weigh all factors (as you have done), but do not get enamored and target the value as the maximum possible. There are many instances were I have used SP at closer to a 2.5c/SP when booking local hotels for stays that I would not normally use, and prefer to use extra SPs over cash.

 

[DavidnRobin]

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.

^^^^ this ^^^^

 

[Rsauer3473]

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.

 

[Ken555]

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.

Some go up in category, some go down. They don't all go up every year.

I agree with your general observation, though. I won't return to some of my favorites since I can't justify the current category valuation.