Redeeming Starwood Preferred Guest Points for Maximum Value

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I value Starpoints at 2.4 cents apiece, and I can get even more than that when I redeem for high-end hotels and premium award flights. However, I routinely get emails from readers who aren’t sure how to maximize their points, so today, TPG Contributor Richard Kerr offers examples of some of the best (and worst) redemption options.

TPG's most recent monthly valuations list Starwood Preferred Guest Starpoints as the single most valuable loyalty currency. The tremendous value they offer along with the relative difficulty of earning them make Starpoints the pièce de résistance of loyalty currencies. As I've done recently for Chase Ultimate Rewards and Amex Membership Rewards, today I'll explore the various ways you can use Starpoints, and show you how get the most out of them.

Earning Starpoints
I believe Starwood does a great job of limiting the ways to earn mega amounts of Starpoints (without spending mega dollars), and thus allows simple supply and demand principles to keep the value of Starpoints high. To balance out the equation, Starwood Preferred Guest offers very desirable redemption options. Still, there are more ways than you may think to earn Starpoints:

In addition, Starwood has two co-branded credit cards that can help compound all your Starpoints earning: the Starwood Preferred Guest® Credit Card from American Express and the Starwood Preferred Guest® Business Credit Card from American Express. Both versions earn a $100 statement credit after you spend $1,000 in the first three months. Plus, an additional $100 statement credit after your first purchase at participating SPG or Marriott Rewards hotels in the first six months. You'll earn 2 points/$ for all spending at Starwood properties, and 1 point/$ on all other spending.

Redemption Options
Now for the fun part — all of your nights away from home are done, you've earned the welcome onus on your AMEX Starwood card, your Delta Crossover Rewards flight has landed, and you just took your SPG-linked Uber ride home from the airport. Your points are in the bank, and it's time to look at how you can redeem for the best value. Here are some of the best choices, as well as ones to avoid.

1. Free nights

Starwood uses a fairly straightforward and reasonable award chart for free nights across its seven categories of hotel properties. Special weekend rates lower the price of Category 1-2 hotels by 1,000 points, and you can get your fifth night free at Category 3 properties and above. TPG Senior Points and Miles contributor Jason Steele wrote last year about How to Get the Best Value for Starwood Hotel Redemptions, and found that Category 3 and 4 properties are typically the strongest options, though there are opportunities to get great value at both low- and high-end properties. If you can get 2.5 cents/point or greater, that's pretty good.

The SPG Nights & Flights option is also worth mentioning. For Category 3 and 4 hotels, you can redeem 60,000 or 70,000 points (respectively) to get 5 free nights and 50,000 airline miles from your choice of 31 airline transfer partners. That's a pretty smashing deal.

Good Redemption — If you're headed to Washington D.C. to explore the National Mall, National Zoo, or to give your local congressman an earful, check out the Westin Georgetown. In May, a standard room is going for $365/night or only 12,000 Starpoints which gives you a redemption value of 3 cents/point.

Bad Redemption — Hawaii can be expensive, and a good option for redeeming points, but don't use them at the Sheraton Princess Kaiulani on Oahu. A standard room is going for just $140, but a free night at this Category 5 property will cost you 12,000 points. That gives you a redemption value of only 1.16 cents/point.

2. Upgrades

You can upgrade from any category of room to either a better room or to a suite. There are different award charts for room and suite upgrades.

Good Redemption — On May 20, the Sheraton Miyako Hotel Tokyo has standard rooms for $147/night with an executive suite starting at $420. As a category 4 hotel, a suite upgrade will cost 10,000 Starpoints, giving you a redemption value of 2.7 cents/point.

Bad Redemption — On May 20, the Sheraton Denver Downtown has base rooms for $280/night with an executive suite on the same night costing $330. As a category 4 property, a suite upgrade again costs 10,000 Starpoints resulting in a laughable redemption value of 0.5 cents/point.

3. Cash & Points

Starwood allows you to use points to cover just a portion of your rate while paying for the remainder in cash, as TPG did recently at the St. Regis Princeville on Kauai.

Good Redemption — In August, The Westin Excelsior in Florence has standard rooms starting at an intimidating $570/night. A free night would cost you 20,000 Starpoints, but the Cash & Points rate would cost just 10,000 Starpoints and $180, meaning you could redeem 10,000 points to save $390, for a great redemption value of 3.9 cents/point.

Bad Redemption — Try to avoid using Cash & Points at already affordable hotels in lower categories. If the cash portion you're covering with points is more than 50% of the cost of the night, then you're getting a worse redemption value than if you booked a normal award. For example, the Aloft Atlanta Downtown is (for some reason) a Category 4 hotel that requires 5,000 points and $75 for a night when paid rooms are only going for $139. This gives you a poor redemption value of 1.28 cents/point .

4. SPG Moments

Good Redemption — Perhaps some of the most unique and captivating redemption options in our entire hobby reside here in SPG Moments. You can redeem Starpoints for once-in-a-lifetime experiences like a round of golf with a pro, suites at a New York Knicks game, or Starwood's recently announced Hear the Music, See the World concert series. Some moments have a fixed price, while others are up for auction. The fact that some of these experiences would be otherwise unavailable makes it difficult to determine a redemption value, but generally the prices are very reasonable compared to what I would expect.

Bad Redemption: Front row tickets to the BackStreet boys in Wuhan, China. Tell me why would the good people of Wuhan want to ruin a pleasant evening by spending it with these guys? Ain't nothing but a mistake.

5. SPG Flights

Good Redemption — This option is not the same as transfers to airline partners. When redeeming for SPG Flights, you use a standard online travel search engine, and are charged (in Starpoints) based on the revenue cost of your flight. For maximum value, your revenue cost should be as close to the high end of each level as possible. For non-stop, round-trip service from Tokyo to Atlanta on Delta May 28-June 4, you'd need 120,000 SkyMiles (or 100,000 Starpoints transferred to Delta). However, you could book through SPG flights for only 70,000 Starpoints — a 30% savings.

Bad Redemption — With all of SPG's airline transfer partners, don't book a flight directly with Starpoints unless it's cheaper than a free flight with the airline's own program. I also would never use this option for flights in a premium cabin, as the cost in Starpoints is much higher than what you'd pay by transferring to an airline program. Want to fly business on United from Newark to London in May? That will be 515,000 Starpoints. Yeah, right.

6. Amtrak Rewards/ Avis and Sixt Car Rental Certificates

Good Redemption — There are great ways to get a lot of value out of Amtrak Guest Rewards. Having 2 people in a roomette on a one-zone trip like New York to Miami can yield value as high as 7.2 cents/point. A Roomette for 2 people costs 15,000 Amtrak points as opposed to $549. Of course, unless you’d rather travel by train in the first place, you also have to factor in the extra time it takes to reach your destination. Readers have also pointed out getting great value on expensive Northeast corridor routes between D.C., Baltimore, New York, and Boston.

Bad Redemption: Avis and Sixt $50 car rental certificates cost 3,500 points a piece. This gives you a flat redemption value of 1.4 cents/point. I would never redeem Starpoints this way.

8. Transfer to Airlines

My favorite use of any loyalty currency is having the ability to transfer Starpoints to 31 different airline programs, with a 5,000 mile bonus for every 20,000 Starpoints I transfer. While not all 31 programs should be seen as equal, if you're just a few miles short of an award, or if there's a special niche award offered by one of the partners, the flexibility of Starpoints is incredibly valuable.

I could write a post on how to maximize transfers to each of the 31 partners. Instead, I divided all the transfer partners into two charts. The first chart shows all transfer partners that I think offer good value, while the second chart lists partners that don't.

Good Redemption — Depending on your situation, you can likely get good value out of transferring to these programs:

Bad Redemption — I'm not an expert in the Hainan Airlines Fortune Wings Club, but like the other partners listed below, I can't see a good reason to transfer to the program. The airlines below either offer a poor transfer ratio, are too expensive, or can be accessed more efficiently. With some of these partners, the opportunity cost of no longer having my points to use for the above solid partners stops me from ever using them.

Bottom Line

Starpoints are incredibly valuable because of the potential value in free nights, Cash & Points rates, and the ability to transfer to airline partners with a 5,000 mile bonus. Some of the new SPG Moments have also caught my eye, but in the end I prefer to use points for travel and just pay for my own (non-VIP) concert tickets.

How do you get great value out of your Starpoints?