cactuspete

Indeed.

From earlier in this thread: http://www.flyertalk.com/forum/showp...&postcount=113

Boraxo

Not only do I think it is a valid issue, but I think that it may be actionable (as I said at this time last year). I have attended a # of SVO presentations (with one upcoming this weekend ) and the pitch is always the same: you will receive X points for buying, which you can convert to a week anywhere, i.e. Hawaii. Of course, they never tell you that the 50K points which used to buy 6N in Hawaii (incl. the bonus night) will not be sufficient because there will be category creep in a month. Yes there is fine print disclosure which may be sufficient to address SPG depreciation for future years, but SVO doesn't come close to proving adequate disclosure in the initial pitch. Nice fodder for class action lawyers once they are done with Enron, etc.

As for the category creep itself, I think the math is pretty simple, to wit:

As of 2 years ago, 40K points was sufficient for 5N at a Cat 4 resort, which at the time included the Westin Whistler and Westin Maui. (You could also earn extra free nights at Cat 4 thru various promos. ^ But I digress...)

To earn 40K points through SPG stays, you would have to stay 66 nights at an average rate of $200/nt, resulting in hotel revenue of $13,333 (Plats might be able to get away fewer nights and a bit less $ due to bonuses).

However, the same 40K points can be easily earned with 0 stays and $40K Amex spending, for which SPG (not the individual hotels) might receive $800 in revenue (assuming Amex pays .02 per point, but could be less).

Even if SPG gave the resorts the whole $800 for 5N that would not come close to what the property could sell the rooms for, particularly during peak no blackout date periods. And many cardholders can easily spend $40k per year = a free resort vacation every year. ^

As others have noted, the combination of point inflation (IMO solely due to Amex cards - which should have been foreseen) and room rate inflation (due to economic growth) is the cause of the annual category creep. So now it takes 48k points for 5 nights in Maui, and if rumors are true, it will take 64k next year. So in 2007 you will have to spend $21333 at hotels (85 nights @ $250/nt) or 150% of what you used to spend on Amex, just for the same reward.

The end result will be to decrease loyalty from those who don't carry the SPG Amex as they won't be able to keep up with the category creep. Contrast to Hyatt where anyone with a any type of mastercard qualifies for an FFN (free night) after 2 stays. ^

SportsTech

So, I'll book my 50% off Plat redemption and a couple of other potential stays that may or may not happen (but can be cancelled without penalty) for another 70-100K of points, and I'll make these reservations before Feb 1st. It would be nice if the (annual) category increases were negative, but they aren't. So what?

Seems like no one has mentioned that we've gotten a truckload of very rich promo's in the past 6 months that have more than equaled (on a percentage basis) the predicted increase? I don't know what my actual 'earned' (butt in bed) 2006 points total is, but it's well below the 125,000+ points I got last year - 32K from the 'choices' promo alone. There will still be a lot of interesting hotels at Cat 4 or less, and assuming the targeted marketing geniuses don't stick me back in the permanent control group, I imagine there will be an equivalent number of opportunities to over-earn this year. The thing about inflation is, it mostly hurts people whose income grows more slowly than the inflation rate. I'll wait to see whether Starwood sustains the incremental earning opportunities before complaining too bitterly.

gleff

Indeed, we will. And adding Cat 5 to Cash & Points would be a real ^^^.

SportsTech

Amen, Gary. And it would be nice if they lifted the Cat 4 cap to Cat 5 on all of the other promo's, too - category creep would be a lot less onerous if the limits went up with the number of categories.

Seattlenerd

And what kind of pressure is that?

The general bottom line is: Don't kill the messenger. Few frequent travelers programs have official reps, identified as such, on FlyerTalk. If folks are going to whine and moan in their posts (not necessarily the one quoted above), they should do so understanding William's role.

swag

Isn't the real issue the lack of time between the announcement of the specific category changes and when they go into effect? It's not so much that we at Flyertalk are deserving of special treatment. And we get that from William, year round, on a one-to-one basis when needed.

If SPG made the announcement of specific changes - publicly, to everyone - on Feb 1, for redemptions that are made March 15 or later, then the complaining here would cease. (Okay, it wouldn't, but it would at least be lessened, maybe). And the fact that they did just that with the Cat 7's proves that they aren't worried about a run on redemptions, or at least that the concern is outweighed by wanting customers to feel that they have been treated fairly.

BigBopper

Personally, I think the "real" issue is first we pay more for the room and then on top of it, we pay more for the award. They get us coming and going.

Just goes to show once again that the bottom line is profit (which is ok). If you think individual customers are special then you're just naive.

swag

If you pay more for the room, you earn more points, since points are awarded based on spend. As long as long term point inflation tracks long term room rate inflation, it should balance.

The folks who are hurt most are those with large accumulated balances, and those who get most of their points from bonuses, Amex, and other things besides room rate.

ehlfg

I, for one, very much appreciate the advance warning. This thread just pushed me into spending almost all of my Starpoints balance on five nights at Whistler in February. I asked about Cash and Points, but they're still not showing up for Whistler past the end of the year. Unfortunately, I'm just gold and not eligible for the 50% redemption promo (I tried). But it still seemed worth it to lock in Whistler at the current rates before the seemingly inevitable increase to Cat 5.

It would be nice if the redemption rates were to stay the same, but I understand the devaluation. Count me as another hopeful vote for adding Cat 5 to Cash and Points in the future.

itsme

Admittedly, I am not well-informed about this. So please tell me, who won the title for 2006? And who looks like the favorite for 2007, or is it too early to say?

Life_Platinum

Like Ginja, I tried to follow the advice listed in the past Sunday's NY Times Travel section as well as that of Mr. Sanders to book stays over the next 18 months. I also had the same outcome: it couldn't be done according to the Platinum Concierge desk as they suspected the two hotels in Spain had not yet loaded their dates into the computer system. After discussion for a few minutes, they agreed that the only thing I could do was to email the hotels directly and see if they could arrange these award stays. Needless to say, I followed their advice and am awaiting replies from these two properties.

Any ideas on how to accomplish this would be appreciated.

EC Traveler

Hey-

I will admit I am frustrated - even more by the 'lock down' put on Lurker than the actual event of raising the cats for many hotels. I will admit, I'm confused how it went from "most" hotels will move up to now less than 33%, to now somewhere around 20% total? I'll assume 30% or so, which for all intents and purposes means that every cat 4,5,and 6 can move, since by my count 600 of the 900 or so props are cat 1,2,3. Of course, sprinkle in some key cat 3's moving up in place of some average cat 4's staying put. Alas, while I personally have found great redemption value many times in the cat 2's ,mainly when looking for an overnight at an airport or something, generally I have NEVER stayed at a cat 1.

Anyways - the question. When we see this move to Cat 5 of say, 100 cat 4 hotels - will they also travel with it a new Low and High period? I won't get too worried when Westin Whistler goes from 40,000 --> 48,000 for a 5 night stay, but my guess is that they will have a High season for which 40,000 today equals 64,000 tomorrow.

That's part A - will Cat 5's still have low & high or since there will be a hundred or more of them, they won't do that?

Part B - will each hotel's peak night be specifically set, or will it be a general set of dates for all Cat 5's?

Bottom line - I'm Ok with point deflation. I get frustrated when it is a ridiculous change when otherwise nothing else has changed. Example being Westin Whistler - 10k to 16k is 60%. Those types of inflations need to be capped. Nobody can raise their "rates" that much and stay in business, or at least keep loyalty in their pocket.

Thanks
EC T

DCBob

The hotels have the ABLITY to book stays up to 18 months ahead, but in reality, MOST hotels will only set rates a maximum of 11-12 months ahead of time. It would be exceptional service if they agreed to an award booking that far ahead even though SPG permits them to do so.

gleff

If a hotel's award rate plan hasn't been extended, SPG can make the reservation at RACK, deduct your points, and then they then send an instruction to the hotel to convert the reservation to an award stay.