Some Starwood Preferred Guest properties offer their guests to redeem SPG points for so called “Instant Awards” ranging from F&B, Spa Treatments to Limousine Services but do they make sense?
We looked at a couple of the redemption options that are usually displayed through a special list in the guestroom or a personalized letter such in this case, showing the current point balance of the guest.
Generally speaking, redeeming SPG points for hotel stays is already a pretty bad deal in most instances as Starwood Preferred Guests has a horrible ratio when it comes to earning and redeeming points considering you only earn 2 SPG points per US$ spent before tax (3 for Gold/Platinum members).
But what is even worse than using your SPG points for hotel stays is to redeem them for services at the property itself in the form of these Instant Awards.
Here are three awards available from the extensive list:
- 6 pieces of Dry Clean (1500 THB/US$44) – 3000 SPG Points
- Sunday Brunch FEAST With Beverage Package (2800 THB/US$81) – 6000 SPG Points
- 60 Minutes Thai Massage – 6000 SPG Points
As a very conservative valuation I consider SPG points to be worth approximately US$25 per 1000 (2.5 cents per point) but I also purchase the maximum allowed amount of SPG points every year at $35 per 1000, preferably though when a discount promotion is going on. Why? Because it’s still a very cheap option to purchase airline miles for programs that don’t directly sell points such as Singapore Airlines KrisFlyer.
In any case as far as the above awards are concerned the redemption value is completely out of whack and even undercuts my conservative estimate by close to 50%. It is a horrible way to use your SPG points and can only be justified if you don’t put a specific value on your points balance for reasons such as generating a huge amount of points through business related credit card spend.
I have seen these redemption lists at a couple of hotel and none of the options featured were ever a good deal. The hotel likely gets very little reimbursement from SPG for the items on the and needless to say the profit a hotel makes on things like in house spa (usually 3x the price of a decent spa outdoors) and hotel arranged card service (highly inflated compared to options like UBER Black or even Blacklane etc) is huge.
If you earn your hotel points the traditional way by actually staying at the property then it pays off to better try and get the most value out of your points, especially as far as SPG is concerned. As I mentioned their earn/burn ratio is horrible. You have to spend $2000 to get a free night at 4000 points at the aloft in KL for example (Public Rate: $70). How much someone values his miles and points is an individual decision and highly depends on how they are earned and ultimately used up. I don’t think there is a blueprint for what value to attach to it but even with conservative valuation these instant awards are pretty bad.