Blurring the Lines of Loyalty

Starwood’s latest bombshell, SPG Flights, extends loyalty currency toward paying for awards of any kind and blurs the line between airline and hotel loyalty programs

Warning: Do not assume that this story is only about the Starwood Preferred Guest program. It is not and contains information and advice for members of all programs.

In June 2006, we told InsideFlyer readers that we were looking at the new “golden egg” for frequent flyer programs in the form of the United Mileage Plus Choices program which, while modeled after the Delta Air Lines SkyPoints credit card and the Air New Zealand Airpoints award redemption, clearly portrayed a general directional shift of how these programs look at reward redemption. In the United Plus Choices program, which we continue to champion, the average redemption for awards is just over 17,000 miles–meaning that members on average are paying 17,000 miles for an award that they normally would be paying a minimum 25,000 miles for using the regular award chart. Members can redeem their miles at roughly a penny per mile in cash value toward the redemption of any United flight listed on united.com, bypassing the usual award flight capacity controls, blackout dates and the standard levels of award chart redemption. Turns out that we were correct to see this as a sign of things to come because the industry has seen similar program features that offer alternative award redemption put in place by Delta SkyMiles with their growing Pay With Miles program. That program will also be implemented for Northwest WorldPerks members when the merger between Delta and Northwest, and their frequent flyer programs, is final. And while “survival of the fittest” fuel hedge changes are getting most of the FFP attention these days, there is word that at least one other major frequent flyer program has almost completed work on a similar extended redemption offer.

And then, there’s Starwood Preferred Guest’s latest offer. SPG Flights looks to be extremely relevant to today’s frequent flyer. Frequent flyers have been bombarded with new fees (baggage, redemption, blankets, etc.) and while SPG Flights does not solve the problem of having to pay to check your luggage, it does give frequent flyers a break from transaction fees, taxes and airline booking fees because they are paid in points when you book your award flight.

With SPG Flights, members can book last minute–even for holiday travel–where airlines might normally charge additional service fees for redeeming an award. If there is a flight available, a SPG member can book it with Starpoints.

SPG Flights is a natural extension of the SPG “no blackouts” room redemption policy Starwood pioneered. With the addition of SPG Flights, members will now have the same access to unrestricted air travel they now have with rooms–if there is an available seat on a flight, it’s yours.

We’ll take a look at the benefits this new program offers SPG members and its impact for members of other loyalty programs, both airline and hotel. We will also give you tips on how to use the program.

SPG Flights is in our opinion one of the most evolutionary changes in hotel programs since several shifts in programs in the past: Marriott’s points for merchandise offers that were introduced some years ago, Starwood’s no blackout dates redemption policy introduced in 1999, and more recently, the Any Hotel, Anywhere reward offer from InterContinental hotels. And we see this move by Starwood as possibly evolutionary for the rest of the travel loyalty industry as well.

Hotel loyalty programs have long enjoyed a cozy fit with frequent flyer miles. Many will remember Sheraton Club International ClubMiles currency and the Marriott Miles program from years gone by. But the SPG Flights program was born out of other reasons. First of all, after seven years of acclaimed success as one of the world’s leading hotel guest programs, it lost some of its luster during the 18th annual Freddie Awards when it failed to win some of the categories it had a lock on for many years. Yes, even the best of programs need an update from time to time and it looked as though SPG was suffering from the dreaded seven-year itch and needed a makeover. SPG has a history of solving pain points for their members and this new benefit is particularly relevant because of the growing concern that it is more difficult to redeem miles for flights. In addition, airlines are imposing new and higher fees on travelers trying to redeem their miles for flights. SPG appears to have listened to their members struggling with these issues and decided to create a program to help alleviate these frustrations.

Hotels have long held the upper hand in creating real value for members with their award redemption structure because unlike airlines, they typically are paying hotel property owners for an award redemption room. In the case of SPG Flights, Starwood has elected to simply divert some, or even all of that payment, to the airlines to secure no blackout award redemption, similar to the manner in which a popular credit card program like CapitalOne GoMiles Card does–by actually purchasing the airline tickets. It’s the way that Marriott has long offered merchandise awards to their members and other types of non-room awards are offered by Priority Club, HHonors and others.

Sure, all major programs have long offered the availability to convert your points into airline miles–but that might be a shortcut to a disaster if once transferred the award is not available. This new program seems to offer a sound solution, one that just may return this program to its prominence, and if nothing else, make an even stronger case that the SPG American Express card may be the best loyalty card in the business–hotel or airline.

At first glance, some members will no doubt focus on the value of a SPG point toward the flight award redemption. While that can be a consideration, as airfares rise, it actually puts this program at a disadvantage since the value of a point declines over time based on airfares. But, it might be incorrect to base the value of this program solely on the value of the points being exchanged. The program was created to help those members find award seats that don’t seem to be there and for that reason alone this is a marvelous benefit. And for those interested, the SPG Flights program currently offers a better value per point/mile than any other airline in the world offering similar programs including the United Choices program, the Delta Pay With Miles program and the Air New Zealand Airpoints program. Not bad for a start. In fact, in some cases the SPG Flights is a minimum 50 percent better value for conversion than the airlines.

Now, having a better value may be problematic over time for SPG since some of their airline partners have shunned partnerships in petty jealousy–the current Continental, Singapore and United conversions to miles are examples. But this program overcomes some of that jealousy by giving real money over to the airlines.

Cashing In

What we like best is that if you are smart, there are an unlimited number of ways you can work this program to your advantage, although it will require just a little more work. Here are four ways that make the most sense:

• Family Travel. One common obstacle is finding five free awards on a single flight. Can it be done? Sure. But if not, three travelers can book awards with your airline and use SPG Flights to “purchase” the other two seats. Now remember, these “awards” earn frequent flyer miles so if using this solution, remember to use your miles for award seats for your family members and you should be the recipient of the SPG Flights award. And don’t forget to collect miles as well for any family member traveling with SPG Flights.
• Use this program as a double dip. Rather than pay 200,000 miles for a business class award because you could not find it available at 100,000 miles, use SPG Flights to book the coach airline ticket you need and then use your airline miles for the upgrade on the same ticket. Overall we think you’ll find a savings if you remember that this option is about not having to pay double miles.
• At first, some of the higher level redemptions will appear of less value to you. Hold out and use this program when you hear of an airfare sale which increases the value of the points you’ll be using. This is especially true of business class air fare sales.
• Keep this program in mind if you’re considering a cash back or CapitalOne-style travel rebate program. At most levels your value per point/mile is greater than 1 percent, even approaching 1.5 percent at the lower levels of redemption.

The Details

To help you get a sense for what this program is and what it is not, we’ve gleaned some of the following FAQs from the spg.com/FLIGHTS Web site to help you along:

• Are there blackout dates or capacity controls?
  There are no blackout dates or airline capacity controls with SPG Flights! While more Starpoints may be required for high-demand flights because of the higher cost of a high-demand ticket, if there is a seat available on an available flight on a participating airline, Starpoints can be used to purchase a ticket for it.

• Can I redeem Starpoints for an airline ticket on every airline?
  Starpoints can be redeemed for airline tickets on most major carriers worldwide. Starpoints cannot be redeemed for airline tickets on some smaller, local, and/or low-cost airlines.

• Can I earn frequent flyer miles for airline tickets purchased with Starpoints?
  In most cases, frequent flyer miles may be earned on tickets purchased with Starpoints. Members must contact the applicable airline to verify this information.

• Can I only use Starpoints to purchase tickets from airlines that are transfer partners in the Starwood Preferred Guest program?
  Starpoints can be redeemed for airline tickets on most major carriers worldwide, even if they are not a Starwood Preferred Guest Starpoint to airline mile transfer partner.

• Are tickets refundable?
  Tickets are non-refundable.

• Can I book first class or business class tickets?
  Absolutely. On the Welcome to SPG Flights page there is a dropdown field that allows you to search for tickets by class: coach, business or first, provided these classes are available on a flight on a participating airline. The number of Starpoints needed to redeem for a first class or business class ticket is based on the ticket price. There is no Starpoints surcharge to purchase a first class or business class ticket.

• Can I purchase a companion ticket?
  Absolutely. On the Welcome to SPG Flights page, select the number of adults and children for which you wish to use Starpoints to purchase companion tickets. You may purchase tickets for up to five individuals per transaction. If you wish to purchase more than five tickets, additional transactions will be required.

• Can I gift my ticket to someone else?
  Once purchased, airline tickets cannot be transferred to anyone else. You may purchase an airline ticket for a family member or friend by entering their information in the Passenger Information section during the redemption process.

• How will I receive my airline tickets?
  All airline tickets purchased using Starpoints will be E-Tickets and an email of your itinerary will be sent to the email address you supplied during the redemption process.

• Are there additional fees for flights?
  Prices include taxes and fees that are charged or collected by the airline at the time of purchase, and these are included in the Starpoint cost of your ticket. International departure taxes and other applicable state and government taxes and fees not collected by an airline at the time of purchase are charged at the airport. Optional fees which are based on circumstances after purchase and as desired by the traveler such as, but not limited to: flight insurance, luggage fees, food, after purchase upgrades, changes, etc., are not included in the Starpoint cost of your ticket and need to be purchased separately by the traveler.

• Are there any age restrictions on the flights?
  Age restrictions are determined by each airline for each flight. Please check with your airline of interest for complete details.

• How do I book a flight for a child two years of age or under?
  Children two years of age or under are considered infants. Depending on the airline and the flight, the infant may or may not be held in adult’s lap, and there may or may not be a nominal fee for them. Paid tickets for a child 0-2 can be purchased throughout SPG Flights. One must check with the airline regarding the flight of interest for complete details on requirements for a child of two years of age or less. You cannot book a lap ticket through SPG Flights.

• How do I book a flight for a child of 2-11?
  Select the number of children from ages 2 to 11 when making the reservation. If an airline offers a reduced fare for a child of a certain age, the reduced fare should come up during the SPG Flights search.

• How do I book a flight for an unaccompanied minor?
  You cannot book a flight for an unaccompanied minor through SPG Flights. You cannot purchase a child’s ticket without the purchase of at least 1 adult ticket through SPG Flights.

• How do I book a flight for a child 12 years of age or over?
  Children 12 or more years of age are considered adults in regards to airline ticket availability and cost, so they should be included in the total number of adults for a ticket search.

• What if the airline cancels my flight?
  At this time, SPG Flights does not offer any form of travel insurance. If the flight is canceled, the situation is to be addressed by the airline and will be handled based on their terms and conditions. The ticket should be considered as a cash-paid ticket for their purposes.

• What if the airline I booked my flight on goes on strike?
  At this time, SPG Flights does not offer any form of travel insurance. If an airline goes on strike, the situation is to be addressed by the airline and will be handled based on their terms and conditions. The ticket should be considered as a cash-paid ticket for their purposes.

• What if the airline I booked my flight on goes out of business?
  At this time, SPG Flights does not offer any form of travel insurance. If an airline goes out of business, the situation is to be addressed by the airline and will be handled based on their terms and conditions. The ticket should be considered as a cash-paid ticket for their purposes.

• In the past, I’ve transferred Starpoints to an airline to receive miles for flights. How is this redemption option different?
  With this option you redeem Starpoints directly for your airline ticket. Tickets are available for more airlines than those currently listed as Starwood Preferred Guest airline transfer partners. You still have the option to transfer Starpoints to an airline and receive miles with Starwood Preferred Guest transfer partners; however, SPG Flights allows you to skip the transfer step, expands your flight options to include more airlines, and eliminates blackout dates and other restrictions found with airline mile redemption programs.

• What if I don’t have enough Starpoints for a ticket?
  You may purchase up to 20,000 additional Starpoints per calendar year for a ticket by going to www.spg.com/buystarpoints, so long as you have been an SPG member for at least one month.

• When will I see how many Starpoints are required for an airline ticket?
  The Starpoint cost for an airline ticket is based on the U.S. dollar cost of the ticket and will be displayed along with the available flights for you to select from.

• How quickly will my Starpoints be deducted from my account if I redeem them for an airline ticket?
  Starpoints are deducted immediately from your Starwood Preferred Guest account once you check “I Agree” and click “Continue” on the “Please Confirm Payment Details” page.

• How will the deduction of Starpoints appear on my account for this airline ticket award?
  The description on your statement will read “SPG Flights Award” and will display a deduction of Starpoints equivalent to the Starpoint cost of the airline ticket(s) and the description will read “SPG Flights Award.”

• Are my Starpoints refundable?
  Once tickets are purchased using Starpoints, members may not receive a Starpoint refund.

• Can I have Starpoints returned to my SPG account after I have redeemed them for an airline ticket?
  Once Starpoints are used for your airline ticket, they may not be returned to your Starwood Preferred Guest account for any reason. All Starpoints redemptions for airline tickets are considered non-refundable and may not be returned to your account for any reason.

• What if I need to change my travel plans after using Starpoints for an airline ticket?
  Only some airline tickets are changeable. To determine if you can make changes, and to make such changes if possible, call the SPG Flights service desk: Flight Changes: Toll Free: (866) 465-8002 from the U.S. or Canada only. English-speaking only. Toll: (208) 429-5338 from outside the U.S. or Canada. English-speaking only. Changes to airlines are subject to services charges, airlines change fees, cost differences for a new flight, etc., which you will need to pay for in U.S. Dollars.

• Can I use Starpoints to cover the cost of any change fees if I change my travel plans?
  Starpoints may only be used for the initial purchase of an airline ticket. Any service charges, changes fees, cost differences, upgrades or other optional fees must be paid for in U.S. dollars.

• Can I use Starpoints for flights found on other travel or airline sites?
  Starpoints may only be used for flights found on www.spg.com/flights.

Bottom Line:

We caution members to not think of this as a replacement for SPG points for room redemption. This should be viewed solely as an enhancement of the member benefits and used wisely in conjunction with your frequent flyer miles.

When used properly this program serves notice worldwide that SPG has a very clear strategy in leveraging their program for the best interests of their members’ travel experiences. And while we’re not ready to say SPG Flights is better than the invention of sliced bread, we can’t wait for the right opportunity to use it.