FlyerTalk Forums - View Single Post - 2016 SPG Category Change Predictions?
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Old Jan 19, 2016, 10:46 am
  #6  
el_tigre
 
Join Date: Dec 2004
Location: The City of Angels
Programs: UA Gold, Hyatt Globalist, Marriott LTP, Hilton Gold
Posts: 406
Keep in mind the projected ADR to determine category levels is calculated in US dollars. The important question is what kind of currency conversion formula Starwood uses. Whatever it is, I am guessing it is determined no later than January 1 on any given year. Given that, it is going to be very tough for a huge chunk of international properties to move up given how much stronger the dollar has become over the last year and a half.

Take countries that use the Euro for example. The Euro hovered above 1.30 per dollar for most of 2014, when it then collapsed the last third of the year, but still not falling below 1.20. That was enough for widespread category drops in the Eurozone and, I believe, not one property went up. Since then, the Euro has slid even more, averaging around 1.09 per dollar in 2015. So that would make any increase in the Eurozone unlikely for this year. For any particular property, rates would have to overcome that additional ten percent in loss of currency value in addition to the amount their ADR would have to increase to reach the next category.

So I just don't see the Vedema, Pine Cliffs, etc. moving up. I can maybe see the W Amsterdam move since it is not uncommon for new properties to figure out their own demand. I think the OP hit a lot of the European hotels that will move down, but it should be much more than that. I have a feeling the Danieli is very likely to drop to a cat. 6 too.

As for the London properties, that is a bit trickier. The pound has lost about 6% of its value over the last several weeks, but that may be too recent for it to be a factor for this year. I wouldn't be surprised either way.

I don't see the amount of movement the OP sees in the Japanese properties. There might be 1 or 2 that could move up, but it won't be 4+.

Although I think the OP is unfortunately going to be right given they are among the most popular redemptions, I feel there's no way the Sheraton and Westin Maui should be moving up. Both of them have rates that hover around the mid $300's for most of 2016. If they move to cat. 6s, that means it will be near impossible to get anywhere close to two cents per point value out of either property, which is sadly a growing trend in Hawaii overall.
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