Starwood "Enhances" Cash & Points Option: Increases Price and Adds New Room Options

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This morning, Starwood announced that it will be updating – and by that, they seem to just mean upping the price, its Cash & Points redemption options starting March 5, 2013, as well as adding the ability to redeem Cash & Points for upgraded rooms and suites.

Starwood's Cash & Points redemptions have historically been some of the best hotel point redemption values around, often yielding at least 3 cents per point in value, but often much more than that.

You can find the current category breakdowns here, but for reference on them, the new redemption levels and the differences:

Category 1
Old: 1,200 Starpoints + $25 offered at Asia-Pacific, US and Canadian hotels only.
New: 1,500 Starpoints + $30
Difference: 300 points + $5

Category 2
Old: 1,600 Starpoints + $30 offered at Asia-Pacific, US and Canadian hotels only
New: 2,000 Starpoints + $35
Difference: 400 points + $5

Category 3
Old: 2,800 Starpoints + $45
New: 3,500 Starpoints + $55
Difference: 700 points + $10

Category 4
Old: 4,000 Starpoints + $60
New: 5,000 Starpoints + $75
Difference: 1,000 points + $15

Category 5
Old: 4,800 Starpoints + $90
New: 6,000 Starpoints + $110
Difference: 1,200 points + $20

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Category 6
Old: 8,000 Starpoints + $150
New:10,000 Starpoints + $180
Difference: 2,000 points + $30

Category 7
Old: 15,000 Starpoints + $275 (this is a relatively new redemption level)
New: 15,000 Starpoints + $275
Difference: Same

So now not only will you be using more points (between 300-2,000 depending on the category of hotel, but you'll also be forced to shell out more cash (between $5-$30) bringing your value per point average down even further.

Not All Bad News
On the bright side, you can now make cash & points redemptions at all Category 1 and 2 hotels worldwide, not just in the US, Canada and Asia-Pacific, as is the case now.

On one hand, clearly a 20% increase is bad news – it's essentially 20% more expensive. On the other hand, Starwood hasn't changed these redemption levels for years, and I think there will still be great value to be had, so for me, this increase isn't really enough to sway me away from the Starwood Preferred Guest program. I think there are still plenty of opportunities to get great redemptions, mostly in the mid-tier properties, though Categories 6-7 are becoming too rich for my blood.

The new upgrade and suite redemption options at least give you a choice, especially if you value those bigger, more specialty rooms, although as SPG has really started quantifying these suites and upgrades over the past year and taking a less willy-nilly approach to who gets suites is a good thing overall. However, as a super Platinum, this new access to suites may cut down on the number of complimentary upgrades I get, which already isn't very high.

Example
One of my favorite Cash & Points redemptions is at the Westin Palace Madrid. I'm planning on going there for a couple days this June. Looking at rates now, I found the nightly rate is about 250 euros – about $335. This is a Category 5 hotel, so award nights go for 16,000 points a night, while the Cash & Points option is currently 4,800 + $90. That gives me a value of 5.1 cents per point.

However, come March 5, if I were to make this Cash & Points reservation, I'd be spending 6,000 Starpoints + $110, so my new point value would instead be 3.75 cents – I've lost about 27% of the value of my points.

While I still think that's a decent redemption for this hotel in peak season, I'm still not glad to see the decline in value of my Starpoints, so it's going to make some decisions as to whether to redeem Cash & Points or just pay the nightly rate more difficult in more situations in the future.

Since these changes don't go into effect until March 5, you still have time to make the most of Cash & Points redemptions for the next 6 weeks or so. I'd recommend making as many reservations as possible, because most hotels have pretty generous cancellation policies with cash & points, so better get in before the rates all go up!
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