I recently booked an expensive award stay at the St. Regis Bali, and didn’t quite have enough points for a five free nights. Instead of buying the remaining points, my other choice was to book a cash and points stay, which requires about half as many points in exchange for a cash co-pay.
Eventually I settled for cash-and-points, partly because I needed to book a second award and at that point wouldn’t have enough points even if I did choose to buy more (Starwood limits you to 20,000 purchased points each year). But I expect to earn more this spring and will cancel and re-book a free night award as soon as possible. Here’s why I’m going to book the free nights over cash-and-points.
Usually cash-and-points makes more sense. Points are harder to come by than money, and even though their use is more limited they can potentially be more valuable if you find an especially good redemption opportunity. If you can chip in a little cash on every stay, you can stretch them further.
However, free night awards have several key advantages:
You are still obligated to pay taxes and service charges on the cash portion of a cash-and-points award. In Bali, that number is about 21%. It doesn’t matter much when the co-pay is $50. It matters more if the co-pay is $290.
You can get your fifth night free when you book a free night award. Cash-and-points awards provide no such discount. The second reservation I mentioned earlier is only four nights, one reason I chose cash-and-points for it and will keep it that way.
You can sometimes get a better room type if you’re willing to redeem more points. I could choose between 130,000 points for five nights in a plunge pool suite or 126,000 points for a standard St. Regis suite. With cash-and-points, I could only redeem for the St. Regis suite. Cash upgrade offers still exist for each, but they are not always reasonable.
Some hotels are so expensive that the cash-and-points option still lightens your wallet significantly. I like to pay for my travel as much as possible so I that I can rely on my points for those times when they are truly necessary. This is one of those times. In hindsight, I should have paid for a few stays earlier this year rather than redeem points because now I have to buy them back.
Cash-and-points at the St. Regis Bali would require a cash portion in excess of $1,750 when all is said and done, I’d save a few hundred dollars from not buying points, and I’d still have about ~25,000 left in my account. Those 25,000 points are worth $750 at 3 cents each. But I would still be out $1,000.
I’d rather pay $420 for the extra 16,000 points I expect I’ll need (after my upcoming stays) to book free nights and avoid the taxes on the cash portion. I’ll drain my account to zero but come out ahead in the end. Oh, and a free night award also gets me the pool suite. 😉
One remaining advantage of a cash-and-points award in my situation is that the cash portion is not due until check-out. If I wanted to book a free night award, I would need to buy extra points, and that expense comes out of my pocket right now. But since SPG is currently running a sale up to 25% off purchased points, it makes even more sense for me to go ahead and do this.
Sometimes all signs point toward booking a free night award, even when saving the points seems tempting. I’m not sure I strongly argued for one or the other, but I hope you’ll remember some of the factors that influenced my decision when you find yourself in a similar situation.