SRQ: Using Starpoints for a Coachella Hotel - Good Deal?
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TPG reader Cory asks:
"I'm looking at going to Coachella this year again (8th time...I know, I know, I'm getting too old for all these hipsters), but hotels are filling up quickly and I noticed there's a Westin Mission Hills out in Palm Desert. My question is: the going rate is about $289 a night (cheapest), or 10,000 points per night. How much would you say 10k points is worth and would you pull the trigger on using some points for the three nights I'm thinking of staying (approx $1,000 total)?"
I've never been to Coachella, but I've seen enough pictures of celebrities hopped up on the unknown substances to know it is a good time! On to your question- I always hesitate to tell people whether a specific redemption is worth it or not, since there are many different factors at play. At the end of the day I always tell people that if they feel good about the redemption, then that is all that matters.
If it were me, I'd think that getting about 3 cents per Starpoint is a pretty good deal. I've gotten as high as 7 cents going to super expensive hotels in Europe and leveraging Cash & Points, but at 3 cents you are definitely doing well - especially if that $289 rate doesn't include taxes and fees, which could make the actual paid rate well over $300.
Opportunity Cost
Luckily, you earn elite qualifying nights/stays when you redeem your Starpoints, but you don't earn points on the room rate when you redeem points (the cash co-pay of Cash & Points redemptions does not earn points either). So at a base level, the ~$837 you'll spend on the room rate if you decide just to pay for it will earn you 1,674 points as a base SPG member and an additional 50% bonus (837 points) if you are Gold or Platinum. If you are a 75 night Platinum, you'll earn an additional point per dollar spent (837) and if you use a personal or business Starwood Amex to pay for the room, you'll earn 2 points per dollar (1,674).
You should also factor in any current promotions. Coachella takes place over two weekends: April 12-14 and April 19-21. The first weekend would qualify the stay for the current Power Up Promotion (Jan 15- April 15), which gives 2,000 points for every four nights (up to 16) and a 10,000 point bonus for hitting 20 nights, for a maximum bonus of 18,000. It all depends on how many other nights you have planned in the promo timefare, but the 3 nights worth about 1,500 points- more if they would push you over the edge to get to 20. There is often a gap between promotions, so if you are going April 19-21, I wouldn't bank on a promotion.
All told you can earn between 1,674 and 6,522 points for the $837 purchase. If you have a more expensive trip coming up and you are low on Starpoints, you may want to consider paying for this one. However, if you are Starpoints rich and don't have a lot of other trips planned, I think you should feel perfectly fine about redeeming 30,000 points to save $837.
Points generally don't get more valuable over time, so I don't advocate hoarding strategies. In fact Starwood is increasing the points and cash requirement of many Cash & Points redemptions starting March 5, 2013, so I'd recommend locking in any of the current rates if you have future travel plans. I know your stay is only 3 nights, but the sweet spot on Starwood nightly awards is at 5 nights, since the fifth night is free. So five nights at the Westin Mission Hills would only be 40,000 points, increasing your value per point to over 3.5 cents.
