Should you Take Advantage of Purchasing Starwood Points at a 25% off Discount? Last Day Today

At the beginning of March, Starwood announced a promotion where you can purchase SPG points at a 15%, 20%, or 25% discount. The discounts depends on the number of points you purchase

• Buy 500–6,500 Starpoints: save 15% ($29.75 for each increment of 1,000 points)
• Buy 7,000–12,500 Starpoints: save 20% ($28.00 for each increment of 1,000 points)
• Buy 13,000–20,000 Starpoints: save 25% ($26.25 for each increment of 1,000 points)

This promotion ends TODAY, April 30, 2013. However, they typically run this promotion twice a year, but at a flat 20% discount.  With this promotion, this means that if you go all in it will only cost you $26.25 for each increment of 1,000 points you purchase (typically it is $35 for 1,000 points). While I would not suggest to just purchase points out of the blue, if you do the math for a particular upcoming hotel stay, you might actually find that purchasing and redeeming points might be cheaper then just paying for the hotel outright.

Some things to know with this promotion:

• This promotion ends April 30, 2013
• The maximum number of points you can purchase in a calendar year is 20,000 points
• You can purchase points in increments of 500
• Points take up to 24 hours to deposit into your account
• Your Starwood account must be activated for at least 14 days
• Purchase points here

Now remember, Starwood just went through a devaluation of their Cash & Points redemption and increased the point requirement of many of their hotels. While this promotion can be extremely great for certain properties, it is definitely not as lucrative as it used to be. However, as mentioned above, in the past Starwood has run this promotion at a flat 20% discount. This time around you have the opportunity to get 25% off, so maybe this can make up for the devaluation, slightly. You can read more about this recent change here.

Some examples of when this is a good deal:

• Le Meridien Chiang Mai or Le Meridien Chiang Rai – This is a category 2 hotel and is typically always available for cash + point redemption. This will require you to redeem 2,000 points + $35. The cost of the points plus the “cash” portion of the redemption will only cost you $87.50. However, if you have plans on staying on a weekend, you can redeem just 3,000 points for a free night, which will cost you $78.75. Lastly, if you stay at this hotel 5 nights, you can redeem 16,000 points since you’ll get the 5th night free – on average this will cost you $84/night. Typically, a room at this hotel typically costs at least $120/night.
• Sheraton Mountain Vista Villas in Vail – This is a category 4 hotel and only requires 5,000 points + $75 for a cash + points stay. When I looked last year, availability in the peak of winter (ski season), and cash + point stays were still available. You can purchase up to a 4 night stay (due to the 20,000 point maximum per account), which will cost you a total of $525 ($131.25/night). The cash portion will then cost an additional $75/night, for a total of $206.25/night. While this might still like a lot to pay to purchase points, the regular prepaid rate at this hotel is about $330/night! There are a few other expensive category 4 hotels where you might see the value, like the Westin Aruba.
• Le Meridien Dead Sea, Israel – This hotel at the Dead Sea is a category 1, thus requiring 2,000 points on the weekend or 3,000 points during the weekday. This hotel has a shocking $250/night rate, so purchasing the points required will actually only cost you $56 or $84 a night – probably one of the best value for your points!

There are many hotels where this will actually work to your advantage, so definitely do the math for your particular situation to see if it makes sense. It really does depend on your particular situation.

Pros/Cons of Redeeming Points:

• You will still get stay/night credits even when redeeming (pro)
• You will not get the points (con)
• If there is a bonus at the time, you will be ineligible when redeeming points (con)
• If you are using all points, you will not have to pay any taxes (pro)
• If using cash + point, you sometimes need to pay tax on the cash portion, but since this is on such a smaller amount you will not have to pay the full tax on the regular rate and at some resort and city locations this can be extremely high (pro)
• At some hotels, you do not have the pay the resort fee if using points to redeem for your stay (pro)

So unless there is some unbelievable promotion going on, or the cost of purchasing points is close to the cost of actually paying for the stay, definitely use points when it is cheaper.