Is It Good Value Transferring American Express Membership Rewards To SPG?

Transferring American Express Membership Rewards To Starwood

American Express is my favourite credit card issuer in Canada. Not only do they offer great cards for everyday spend, they are generally the leader when it comes to welcome bonuses.

What I love most about American Express Cards in Canada is the Membership Rewards program, and more specifically, transferring American Express Membership Rewards to various airline and hotel programs.

Not all transfer partners are created equally though, with various different transfer ratios. To make matters even more confusing, not all point programs are created equally, so you need to look beyond the surface to decide whether or not transferring American Express Membership Rewards to a frequent flyer program makes sense.

Is Transferring American Express Membership Rewards To Starwood Preferred Guest A Good Value?

Well…. It depends. On the surface, the 2:1 transfer ratio doesn’t look too appealing, especially considering Aeroplan and British Airways both participate with a 1:1 transfer ratio. However, Starwood Preferred Guest points can be extremely valuable, and are almost always worth more than an Aeroplan or Avios miles.

Let’s look at an example of how Transferring American Express Membership Rewards to SPG could make a lot of sense.

*As a baseline, I value Amex Membership Rewards at 1 cent per point, since that’s what they can be redeemed for towards travel purchases (their ‘cash value’ so to speak). Therefore, anytime I can get more value than that, I consider it a decent redemption, though I aim more towards 2 cents per point for Amex.

Good Example:

I recently stayed at the Ritz-Carlton Pacific Place in Jakarta for two nights using Marriott Reward points, which I earned by transferring American Express Membership Rewards to Starwood to Marriott. As a Tier 1 Ritz-Carlton property, the redemption cost was 30,000 Marriott Reward points per night, which equals 10,000 SPG points, which equals 20,000 Membership Reward points.

20,000 Membership Reward  > 10,000 SPG points (2:1 transfer ratio)

10,000 SPG points > 30,000 Marriott Reward points (3:1 transfer ratio)

Before we break down the value… Wow. What a beautiful property! And considering all guest rooms include executive club access and start at 800 square feet, I’d say this is one of the nicest hotels I’ve ever stayed at, and easily one of the best uses of Marriott Rewards I’ve experienced.

Paid rates at this hotel vary and can range from around $300CAD/night up to $500CAD/night, which is expensive for Jakarta, but given the lounge access and room size, it’s basically an all-inclusive boutique hotel, and probably worth what they charge. I selected a random date in March for this post and found rooms coming in at approximately $390CAD/night.

At this rate, it made sense to transfer 20,000 American Express Membership Reward points to Starwood. Since I used three different currencies for this booking, let’s break down the value of each one:

20,000 American Express points: $390/20,000 = 1.95 cents/point

10,000 SPG points: $390/10,000 = 3.90 cents/point

30,000 Marriott Rewards: $390/30,000 = 1.30 cents/point

I’m happy with those redemption rates, as generally, I want to see close to 2 cents/point for Amex, 3 cents/point for SPG, and 0.7 cents/point for Marriott.

Not So Good Example:

On the same trip, I needed to spend a night in Paris on my routing home. I decided, since Paris is expensive, that I would look at point redemption options, and stumbled across the Prince de Galles, A Luxury Collection Hotel. It looked nice enough, so I booked – and what a beautiful hotel it was!

However, after doing a quick analysis, I realized redeeming points outright might be a poor value. As a Category 7 Starwood hotel, free nights cost a whopping 30,000 – 35,000 SPG points per night, which is steep!

I was transferring American Express Membership Rewards for the purchase and knew I would need 60,000 to equal to 30,000 SPG points required. At that amount, I would get the following value based on the paid rate of $890CAD/night (ouch, Paris is expensive).

60,000 American Express Points: $890/60,000 = 1.48 cents/point

30,000 SPG points: $890/30,000 = 2.97cents/point

Not the worst, but a little bit lower than I’d like, so I decided to check out the cash and points option too. Get ready for some serious math.

The cash and points redemption required $275USD, plus 15,000 SPG points. In other words, I would need 30,000 American Express points and roughly $350CAD for the stay. To calculate the cent per point value, I would need to subtract the copay ($350) from the paid rate ($890) and divide that by the number of points required for the stay.

30,000 American Express points: ($890-$350)/30,000 = 1.8 cents/point

15,000 SPG points: ($890-$350)/15,000 = 3.6 cents/point

So, still not quite as good as Jakarta, but better than an outright points redemption, so I decided to go with this option. Now, given your situation, it could make much more sense to redeem points outright, since it wouldn’t involve a copay at all. For some, getting a little less value for a completely free stay would make much more sense, but since I travel so much it was worth it to pay a bit this time to save some of my points, which I know I’ll be able to redeem for a higher value redemption on a future trip.

Where Transferring American Express Membership Rewards To Starwood Gets Really, Really Good

I recently transferred a mind-blowing amount of Membership Reward points to Starwood to purchase a Marriott Hotel + Air Package for our trip to Maui for Spring Break. We are staying at the Marriott Wailea Resort, which is a category 8 hotel requiring 240,000 Marriott Reward points for a  7-night stay (40,000 points per night, with the 5th night free).

Alternatively, a category 8 Marriott Hotel + Air Package could be purchased, which comes with 120,000 Airlines miles in addition to the 7-night stay. The cost? 360,000 Marriott Reward points. In other words, for an additional 120,000 Marriott points (or 40,000 SPG), I could get 120,000 Alaska Airlines miles. Sold!

So let’s break down the value (hint: it’s good).

The total cost for the package was 360,000 Marriott Reward points, or 120,000 SPG points, or 240,000 Membership Reward points. Which is a lot…

First let’s look at the hotel since that’s the primary motive for purchasing this package. Maui isn’t cheap, and neither is Maui over spring break during whale season. For our stay, rates at the Marriott for a basic room category were $5448.49USD for a 7-night stay, or roughly $7,050CAD….. For a Marriott… Ouch.

Unfortunately, reward stays are still subject to the pesky resort fee, so we’ll have to subtract $280.32USD, or $362CAD, from the price when calculating the cent per point value (CPP).

 

Not even taking into account the airline miles (more on that later), we can calculate that this was a very lucrative use of points:

240,000 American Express points: ($7,050-$362)/240,000 = 2.79 cents/point

120,000 SPG points: ($7,050-$362)/120,000 = 5.57 cents/point

360,000 Marriott points: ($7,050-$362)/360,000 = 1.86 cents/point

I like these numbers… a lot!

Now let’s look at the value of the airline miles. I’m going to look at a realistic scenario first, and then look at the value I plan to get out of my Alaska miles (understanding that most people would choose the first option rather than how I’ll use the miles).

The Common Case

I have a lot of clients looking for family travel to tropical places. What better option than a Marriott Hotel + Air package. We’ve seen the value in the hotel already, so let’s look at getting some realistic value for the airline miles.

One of the options for airline transfer partners is British Airways Executive Club, with the same number of Marriott Reward points needed for a 7-night stay certificate and 120,000 Avios miles. While I wouldn’t always choose Avios over a more valuable program, they can be incredibly helpful for travel to Hawaii from the west coast, with roundtrip tickets costing only 25,000 Avios per person. So, a family of four looking for flights to Hawaii would be best served by choosing this package, as they would have enough Avios for 2 adults and 2 children to fly roundtrip, and even have some miles leftover for a future holiday. Let’s look at some random flights in April from Seattle to Maui with award availability for 4 passengers:

The number of miles needed is actually 100,000 Avios (this is being quoted in Alaska miles, as it’s the best way to search for award availability), plus $44.80USD in taxes/fees. The retail price of the flights is $2,272USD, so for calculation purposes, we will subtract the taxes from the retail price, for a total of $2,227.20USD, or roughly $2,881CAD.

With that, we can calculate the total CPP of the Marriott Hotel + Air package by adding the value of the flights with the value of the hotel and dividing by the total number of points required.

240,000 American Express points: ($2,881+$6,688)/240,000 = 3.99 cents/point

120,000 SPG points: ($2,881+$6,688)/120,000 = 7.97 cents/point

360,000 Marriott points: ($2,881+$6,688)/360,000 = 2.66 cents/point

These numbers are really, really good, and a great way for a family of four to experience a $10,000 Hawaiian vacation on points!

How I’ll Spend The Airline Miles

I already had a boatload of Avios miles when booking this trip, so when I ordered the Marriott Hotel + Air Package, I decided to credit the airline miles to Alaska Airlines Mileage Plan (I consider them one of the most valuable programs for partner airline travel). I’m not 100% sure what I’ll do with the miles, but am considering a trip to Hong Kong on Cathay Pacific. Cathay Pacific has one of my favourite first-class products, and their business class isn’t too bad either. 120,000 Alaska miles is enough for a one-way ticket from Vancouver to Hong Kong in first class and a one-way ticket from Hong Kong to Vancouver in business class, so that’s probably what I’ll do!

Now, before we break down the value, keep in mind that:

1. I would never be paying retail price for business or (especially) first class tickets, so while the CPP will be really high, it’s really only for illustrative purposes
2. One-way tickets price out higher than half a round-trip ticket, so these numbers are a bit inflated, though not by too much

Looking at flights, I see award availability from Vancouver to Hong Kong for 70,000 miles and roughly $50 in taxes/fees. Alternatively, the flight would be a whopping $10,214 to purchase outright.

Returning home in business class costs just 50,000 miles plus $50 in taxes and fees, with the paid rate around $5,374

The total price for this trip would be $15,588, and we would want to subtract the approximate $100 in taxes and fees before calculating the CPP for the Marriott Hotel + Air Package using this airline redemption, bring the actual value to $15,488.

240,000 American Express points: ($15,488+$6,688)/240,000 = 9.24 cents/point

120,000 SPG points: ($15,488+$6,688)/120,000 = 18.48 cents/point

360,000 Marriott points: ($15,488+$6,688)/360,000 = 6.16 cents/point

I love these numbers and is why I love travel hacking. I would never, never be able to pay $20,000 for a flight to Hong Kong and a 7-night hotel stay, but by transferring American Express Membership Rewards to SPG, this is entirely possible!

Transferring American Express Membership Rewards To Starwood Preferred Guest Bottom Line

Travel hacking opens up a lot of opportunities, and I understand that not everyone wants to just fly first class or stay in the best hotels. By transferring American Express Membership Rewards to Starwood Preferred Guest, however, you can choose from a variety of options while getting very decent value out of your points. Whether you’re looking for a hotel stay, a family vacation, or first class flights to the other side of the world, using your Membership Rewards for Starwood and Marriott Redemptions could be a great option, despite the transfer ratio being less than some other airline programs.

Considering Transferring American Express Membership Rewards to Starwood Preferred Guest but short on points? Consider the following cards for their generous welcome bonuses to boost your balances fast:

American Express is currently offering Membership Reward welcome bonus points on the Business Platinum Card .

• Apply for The American Express Business Gold Rewards Card and earn 30,000 Membership Reward Points.
• Apply for The American Express Gold Rewards Card and Earn 25,000 Membership Reward Points and earn 2X the points on gas, groceries, drugstore and travel purchases.
• Apply for The American Express Cobalt Card and earn up to 30,000 Membership Reward Points in your first year, with 5X earning on groceries and dining – equivalent to 2.5 SPG points per dollar spent.
• New Platinum® Cardmembers, earn Welcome Bonus points

Do you think transferring American Express Membership Rewards to Starwood Preferred Guest is a good value? Let us know your favourite way to redeem points in the comment section below!