Smarter Way to Book SPG Cash & Points

For our final week in Thailand, we decided to return to our beloved Starwood Hotels and stay at the Sheraton Krabi Beach Resort (after our last fling with Hilton/Conrad the week before).

The hotel was a Category 3, which meant we could either get (A) a free night for 7,000 SPG Points or (B) a night using the Cash & Points ("C&P") option for 2,800 SPG Points + $45 per night.  [UPDATE: the Starwood C&P prices have increased as of March 5, 2013 so it would now be 3,500 SPG points + $55 per night]

With cash pay rates at $223/night, Option A implied you were getting 3.2 cents/pt of redemption value but Option B was 6.3 cents/pt.  Guess which one my "always optimizing" father picked?

As I mentioned last week, it took us a while to get here from Koh Samui.  And while we were excited to check out the Krabi province (and its world famous beaches), we were also looking forward to just enjoying a regular hotel with normal (read: not rich) tourists where a baby could sleep using a diaper as a pillow just be herself and not get dirty looks from people.

During check in, they found my father's 1st reservation (Feb 28-Mar 5) pretty quickly, but he had to remind them that he had another one for March 5-7.  Why does my father make multiple consecutive reservations?  Well, he has a reason for that of course.

Background
As mentioned in another post (and above), Starwood has 2 ways to book a room with SPG points: (A) Free Night Award or (B) Cash & Points.

(A) The Free Night Award is available whenever there is a standard room available.  If the hotel is <95% occupancy, then Starwood pays the hotel something like $20-40 (estimate) as reimbursement for allowing their SPG member to book a room with points.  The hotel takes it because it would have gone empty otherwise, and they might as well get some income for their fixed cost.

However, if the hotel is 95%+ occupancy at the time of points booking, then SPG has to reimburse them at/around the full Average Daily Rate (in this case, around $223).  But the hotel HAS to make every standard room available for the Free Night Award redemption to be a part of the Starwood family. But since they'll get their Average Daily Rate from Starwood, the hotel is somewhat indifferent (though the Points Guest is probably more frugal than a Cash Guest).

(B) The Cash & Points program is different.  The hotel still gets a cash payment (from you this time instead of from Starwood), but not every standard room is available for C&P.

In this case, hotels can voluntarily elect to participate in this program whenever they want to fill vacant rooms, but can also choose to not participate when they feel they'll get strong demand from guests who pay in actual cash. Since they will only get your small cash co-pay, they have no chance of getting close to the Average Daily Rate during high demand times.

So if you want to book with C&P during high season, you're only chance is to book months in advance before the hotel gets too confident about its occupancy rates.

Our Sheraton Krabi Reservation
My father originally booked this reservation (Feb 24-Mar 7 split up in 3 different C&P reservations) back in October as soon as he found out about his job situation. And because the hotel allowed cancellations with 48 hours notice, he felt like he still had all his options open. But again, why the multiple bookings?

• Reservation 1:  Feb 24-Feb 28 (4 nights) for 11,200 SPG points + $180 cash
• Reservation 2:  Feb 28-Mar 5 (5 nights) for 14,000 SPG points + $225 cash
• Reservation 3:  Mar 5-Mar 7 (2 nights) for 5,600 SPG Points + $90 cash

When your hotel bookings are flexible, your plans firm up and you have a better sense of where you'll be, you can adjust your hotel reservation to match. However, with the C&P booking, you can't modify your check-in or check-out dates to shorten your stay.  You can only cancel and then hope to rebook with C&P if they're still available.

In this case, the hotel was now fully booked by late November and no longer offered any more C&P availability. So any small change in the booking would require a cancellation of the complete reservation (i.e., 11 nights from Feb 24 to Mar 7).

But instead of putting all 11 nights in one reservation basket, he broke it up into multiple reservations so that each one could be cancelled without it affecting the rest of the nights.

And this came in very useful, because when he called an audible on our vacation plans to extend our stay at the Conrad Koh Samui (from 2 nights to 6 nights) last week, all he had to do was cancel the 1st of the 3 Sheraton reservations and now he had his desired 7 night stay.

• Reservation 1:  Feb 24-Feb 28 (4 nights) - CANCELLED
• Reservation 2:  Feb 28-Mar 5 (5 nights)
• Reservation 3:  Mar 5-Mar 7 (2 nights)

Had he not split up the Sheraton bookings originally, then to stay at the Conrad for those 6 nights last week, it would have meant he would lost the valuable C&P bookings at Sheraton Krabi for the remaining 7  nights (Feb 28-Mar 7). Then he would have had to rebook at the full Average Daily Rate (paying actual cash) at that time (late February) which would likely have been higher than the $223/night he found back in October.

But all I care about is that I get a real bed to sleep in. I'm tired of this car seat.