ILUVCITIBANK

TKG,
thanks for the input.

I had used this logic when computing my est of 60%:

ASSUMPTION:
A) I tend to use the N&F II and/or CAT 4 leisure properties, usually during holiday seasons, usually for 10K per night, usually w/ 5th night free
B) Many if not most of my favorite CAT 4 properties just zoomed up to CAT 5 or higher, and are thus now not eligible for the N&FII awards.

CAT 4 = 10K per night
CAT 5 = 16K per night (worst case, high season, because unfortunately this is the only time I can take family trips (during holidays).

So, the difference (increase) being 6K per night, the math I used was 6/10, or 60% more.

I believe my math is still accurate given my assumptions.

I also, FWIW, re-state my opinion that the fundamental problem, which is being exposed now more than ever, is that spg's award levels are poorly-designed with only six (ok, seven now) tiers, so the jumps (point requirements per tier increase) are uneven and not in anyway tied to US inflation or sense of value as perceived by the consumer. Yes, spg may have some internal, secretive formula for setting CATs based on AVG room rate x the price of tea in China, but that does not help their case in the court of credibility or "smell test".

Sadly, my conclusion is that spg's program has been undermined....by spg's own failure to control inflation of their own currency and by a poorly designed CAT formula which does not consider the "consumer" perspective for CAT jumps ("the infamous smell test"), and then they are further handcuffed w/ such (relatively) few tiers to work with. If spg had fairly jumped CATs **IN PROPORTION* to known and verifiable metrics in the hotel industry (we all hear and see them each time a hotel chain announced earnings...percentages of room rev improvement QTR over QTR, etc), this would have been a fair and balanced point increase. But the dynamics above caused a much different result.

But now the surreal requirement is that starwood may somehow be forced to "release the flow of starpoints" via promotions even more for people to have any hope of reaching CAT 6 and CAT 7 level point accumulations. Or do the CAT 6 and 7 properties intend to "go it alone" on revenue customers only and give up the point/award stayers ? or will we see CAT 6 and CAT 7 properties dipping into the priceline customer base more and more ?

So, I half-expect spg wil have to sort this mess out and come up w/ a design overhaul of their program.

Or, spg goes to the dustbin of has-been affinity programs until some sort of cycle change (change of senior execs; economic cycle where spg "re"-appreciates their loyal customer base instead of "uses & abuses" them, and so on) reinvigorates them to correct these problems.

pinniped

Agree with you there: that is the fundamental problem. Starwood's only way of introducing a smaller increase tied more closely to inflation rates would be to change the points required for a redemption. Still imperfect - as hotel markets vary widely across the globe - but perhaps better in that if they did that, your Cat 4 could stay a Cat 4 but simply require 10,700 (or whatever) points per night.

The Kansas City Westin (Crown Center) did not become 133% nicer on February 1st. None of their revenue metrics more than doubled overnight. But because of the structure of the program, there is no way to phase in a smaller hike in points.

The flipside is Marriott. I hope they just continue with category creep and DON'T re-set the redemption levels themselves. If a Cat 5 goes to 6, it costs me 20k points - about 9% of the total Travel Package cost. If a Cat 6 goes to a Cat 7, it's another 20k - eight percent. Those are levels I can live with - especially in this economy.

(Granted, Marriott has capacity controls, but so do Hilton and Starwood - it's just marketed differently and handled differently in the systems. In practice, I've had good luck redeeming at all three - again, partly because we intentionally avoid peak periods on leisure stays.)

TKG

I completely agree with your calculations for the rate increases, and I think your choice of category is fair. So the ~67% increase that you mentioned is perfectly valid. I just meant to point out that this doesn't equate to a ~67% devaluation of your points.

Just to make it clearer with an example, if redemption rates go up 100%, your points are devalued by 50%, not 100%. (Or did I just make this even more confusing?)

pinniped

I'm not confused - you're looking at it they way I'd look at a stock, for example. If I buy a stock for $50 and sell it for $25, I say "I'm down 50%" If I buy a stock for $50 and sell it for $75, I say "I'm up 50%" (Not counting the affect of juice or taxes.)

For whatever reason, we always express our FF mileage calculations the opposite way - perhaps because we've grown so used to losing. We always express value in terms of what it was prior to the program change - when we theoretically acquired the point or mile in question.

So if my favorite prop jumps from a Cat 2 to a Cat 3, my first reaction is "*&@! That's a 133% increase!!" It takes a while to back up and say "Wow, I just lost 57% overnight." Either way, the impact is the same, it's just how we tend to look at it.

There are probably some CO regulars who would argue that their NonePass miles have undergone a 100% devaluation.

Counsellor

As I recall (but I'll leave it to someone else to look up), Starwood Lurker has stated in the past that the category level for Starpoint redemptions is a function of how many redemptions take place at that particular property, not of US inflation or some objective sense of value. Indeed, some of the properties that went up a level price their rooms at or below that of other properties in the same city at their former level that did not go up a level.

GUWonder

Different occupancy levels may be able to explain much of that, where higher occupancy levels trigger higher payments by SPG to the hotel.

TKG

Good point. I think whichever way you look at it, though, these changes leave us with significantly lower spending power.