SPG & Elite Status: Why Are All Stays Counted the Same?
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TPG reader Vito tweeted me to ask:
@thepointsguy—"Why does SPG count a night in a $100 room in Duluth the same as a $1,000 villa at the St. Regis Bali?
First off, they don't count it exactly the same, since you'll earn a lot more Starpoints for staying in the more expensive room. Hotels are typically revenue-based, and the more you spend, the more value you get. However, I think Vito is referring to earning credit toward elite status. Starwood measures elite status qualification in stays or nights, and you get the same number of stays and nights regardless of the cost of your room. The point is, the elite status programs are "frequent" guest programs, meaning they want guests who are coming back.
Just because you spend more doesn't necessarily mean you're more profitable to the hotel. A $100 night at a less expensive property (say, the Sheraton Duluth) could be more profitable to Starwood than a $500 night in Paris. Additionally, the guest staying for $100 in Duluth might have the Starwood Preferred Guest Credit Card from American Express, which gives you five nights and two stays of elite credit each year, and the $95 annual fee is obviously much cheaper than paying for five nights. So how is that fair? It's fair because those SPG Amex customers are making Starwood a lot of money!
Elite status is never going to be totally fair across the board, and I actually like that hotel programs give you the same amount of elite credit regardless of whether you are stay at a more expensive property.
A lot of hotel chains will even allow you to get top tier elite status strictly by spending on one of their co-branded credit cards. For example, you can get Hilton Diamond status for spending $40,000 or more on the Hilton Honors Surpass Card from American Express or the Citi Hilton HHonors Reserve card. The Ritz-Carlton Rewards Credit Card (which I just got) offers Ritz-Carlton Platinum status after you spend $75,000 in a year. So you can earn elite status without spending a single night in a hotel. That's pretty crazy, or pretty lucrative—if you can spend that kind of money, of course.
So while elite status isn't always fair, the programs do allow customers to earn it in a variety of ways, and not just by staying at the most expensive properties.