The Ins and Outs of SPG Flights

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For years Starwood has offered a seldom mentioned program called SPG Flights, which enables you to purchase flights directly through the Starwood Preferred Guest website using Starpoints. TPG reader Travis recently asked for some insight into SPG Flights to find out whether it's a worthy use of his points in lieu of hotel redemptions and transfers to partner airlines. The short answer is no; there's a good reason why this program doesn't get much attention (because it's almost always a rotten deal), but understanding its shortcomings will illuminate the more worthy aspects of the SPG program and help you become a more savvy points and miles traveler.

Ostensibly, the SPG Flights program has several benefits. First, Starpoints can be redeemed for flights on most airlines (with the exception of some low-cost carriers). From my experience with the search engine, any airline that would likely show up on the large online travel agencies (Priceline, Travelocity, etc.) is likely to also show up on SPG Flights. This flexibility surpasses the direct transfer options offered by Starwood's partner airlines, since your points can be used on a broader assembly of carriers.

Second, redemptions are priced according to the going cash rate, and fluctuate with demand. So long as you have enough Starpoints in your account, you can redeem for tickets at any price, and with no blackout dates or other restrictions. In theory, this could make SPG Flights a viable alternative to using airline miles in scenarios where the cost of an award flight is high, but the cash price remains low. Also, since your redemption is treated as a cash fare, you'll earn miles while flying that you wouldn't earn on a regular award flight.

The cost of redemption includes all applicable taxes and fees normally charged by the airline. This could make Starpoints an attractive alternative to award flights that incur hefty surcharges, such as trans-Atlantic flights on British Airways. As it turns out, the prospect of avoiding extra fees is the potential saving grace of SPG Flights, as the program's value proposition is otherwise generally poor.

SPG Flights redemptions begin at 10,000 Starpoints for flights priced up to $150, yielding a maximum value of 1.5 cents per point (CPP). As described in the most recent installment of the TPG monthly valuation series, Starpoints are worth about 2.1 cents per point on average. SPG Flights provides significantly less value at that rate, but the difference is small enough that I wouldn't qualify it as a universally horrible redemption. If you found yourself short on airline miles but with heaps of Starpoints to burn, a redemption at this level could make sense.

Unfortunately, as the cash price goes up, the return on SPG Flights redemptions goes down, and quickly so. The chart below shows the cash price of airfare and the corresponding cost in Starpoints (both pulled directly from the SPG Flights website), along with the maximum value (in cents per point) that can be obtained by redeeming at each level.

There are several things to note in this chart. First, each redemption level corresponds to a range of cash prices. The Max Values listed correspond to the high end of that range. Naturally, though, your chances of hitting the top of the range precisely are low, which means your typical redemption value will be less than what is listed (the low end of each level trends towards a value of about 1.22 cents per point).

Second, there is a rapid decline in redemption value as the cash price increases. For every $65 fare increase, the redemption cost goes up by 5,000 points, which means the maximum redemption value trends towards 1.3 cents per point. That's a pretty meager return on Starpoints in my opinion. With SPG Flights, the value of each point goes down as you redeem more of them. This is the inverse of most award redemptions, for which the higher level (business and first class) awards offer the most value compared to the cash price.

It's worth mentioning that there may be outliers to the valuation chart provided above. I searched about 25 different itineraries, including a variety of destinations, dates, and fare classes. Almost every case provided a value in line with the chart, but there was one exception - an LAX-JFK flight on Delta in business class for September 9-16, 2014 priced out at $2,198, but cost only 125,000 Starpoints through SPG Flights, yielding a value of about 1.76 cents per point.

Finally, you may notice that there's a huge gap between listed redemption levels beginning at $1,060/80,000 points. This is just due to the impracticality of listing every level; the $65/5,000 point trend remains more or less intact. However, the gap is conspicuously located around the point where SPG Flights becomes frivolous. Since Starwood offers a 25% bonus for every 20,000 points transferred to airline partners, you can turn 80,000 Starpoints into 100,000 airline miles, which is generally enough for a roundtrip economy award flight to just about anywhere in the world. Even business or first class award flights tend to top out around 350,000 miles roundtrip (and are usually much less), so any redemption on SPG Flights above this level is just silly.

For example, I priced out an economy class itinerary on SPG Flights from Chicago (ORD) to Tokyo (NRT) for 125,000 Starpoints on Japan Airlines.

However, roughly the same itinerary can be had for 50,000 AAdvantage miles and $53 in fees by transferring just 40,000 Starpoints to American Airlines (which nets 50,000 miles after the 25% bonus), saving you a whopping 80,000 Starpoints.

Even considering the roughly 13,000 AAdvantage miles you would earn by booking with SPG Flights, there's no contest here. The same holds true for most redemptions at or above this level; it's simply a better deal to use Starpoints by transferring to airline partners than to redeem them directly through SPG Flights.

I say most redemptions because, as I mentioned earlier, there are some cases where using SPG Flights could help you avoid costly fuel surcharges. While you can often avoid fuel surcharges by booking strategically on partner airlines, you might consider SPG Flights if you're locked into a specific airline because of your elite status or for other reasons. Consider the following itinerary from Los Angeles (LAX) to London Heathrow (LHR) flying American Airlines with Platinum Elite status:

You could book this itinerary by transferring 50,000 Starpoints to American Airlines (for a total of 60,000 AAdvantage miles after the 25% bonus, since the bonus is only applied to transfers of 20,000 points), but you would incur a fuel surcharge of $708. Alternately, you could use SPG Flights:

In this case you'd pay an extra 35,000 Starpoints (85,000 total) for the same flight, but you would avoid the $708 in fees and earn roughly 22,000 AAdvantage miles (11,000 base plus a 100% bonus for Platinum status). Valuing AAdvantage miles at 1.7 cents apiece, you'd end up getting $1,084 of value out of your 35,000 Starpoints, or almost 3.1 cents per point. Even aside from any other benefits you might garner through your elite status, this is a good deal. The scenario is fairly contrived, but it's plausible enough to demonstrate that SPG Flights could be useful in very specific circumstances.

Overall I'm unimpressed by SPG Flights, as the program seems to offer generally mediocre to poor redemption value. That said, in the points and miles world it's better to have options than to not have them. If your attempts to book an award flight are being stymied by low availability, ludicrous redemption levels, or exorbitant surcharges, you might consider throwing up a Hail Mary and giving SPG Flights a try.
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