USA SPG Hotel Category Change Analysis

Four Points, Newark Airport
SPG Category 1
(1 of only 7 Category-1 hotels left in the USA -- A dying breed)

I stayed a Saturday night in June 2007 for 2,000 Starpoints at the Four Points EWR.

The hotel had a washer and dryer which was a treat after a week in South America.
The catch: I had to beg a housekeeper for laundry soap since the store in the hotel was two hours late for opening.

Loyalty Traveler tip: Don't walk around the neighborhood. I hadn't seen so much drug dealing on the streets since high school.



I completed my spreadsheet for USA SPG hotels and the hotel category shift since 2004. I have lots of thoughts and I am developing commentary to go with the data. The spreadsheet creation has taken time and I still have a variety of data sorts to make and a collection of notes.

The data shows points redemption is being aimed at squeezing most SPG members towards the middle. The shift from Category 1 and 2 hotels to Category-3 and Category-4 hotels is apparent in a comparison of the Hotel Category Shift trends over the past four years in SPG.

The luxury resorts are priced like luxury resorts in currency -- both cash and points, and if you're lucky you can find a reservation for SPG Cash & Points. Currently we have Category-7 SPG hotels requiring 60,000 points per night.

As if the devaluation of the American dollar were not enough of an impediment to Europe travel.
How about an increase for the Prince de Galles Paris from 12,000 points for a free night in 2004 to 30,000 points in 2008? But, only if you book in low season. High season raises the redemption rate to 35,000 points per night.

Category shift is having more effect on the cost of your hotel room than the Euro -- if you are planning to use your hard-earned hotel points for a vacation stay in Europe. A 150% increase, from 12,000 to 30,000 points for a free hotel night is a definite vacation shorter.

The future of SPG?

Newer, more exclusive resorts set up independent high-end redemption categories. The common feature is exclusivity, and likely relatively low value. The SPG loyalty program can market spin off exclusive category hotels geared to high credit card spenders. 150,000 points per award night using points for someone earning 3,000,000 points a year on credit card and partner activity will be a drop in the bucket. The business and leisure traveler piecing together hotel points from travel and perhaps a little credit card activity will have more limited high value free night opportunities.

The low points redemption hotel properties will be the next smallest bracket, offering just enough hotels to keep the brackets for Category 1 and 2 hotels open as a somewhat legitimate excuse for marketing the phrase “You’ll receive enough points for 3 free nights” on the credit card marketing flyers.

Location “Mosul, Iraq” will be revealed when you go to see what hotels you can get for Category-1 points. The impact hits international SPG members as hard, maybe even more. The best values tend to be moving to the USA. Is there a motive here?

Suggestions:
1. Maintain a high level of Cash & Points availability.
2. Replenish the properties among the categories to a more favorable distribution for consumers. While I don't advocate this solution, perhaps raise the point levels of Cat 1 (3,000 weekends; 4,000 weekdays) and Cat 2 (4,000 weekends; 5,000 weekdays) and Cat 3 (8,000).

For now, here is a preliminary analysis of SPG Hotel Category shift for USA hotels.

2008 USA
SPG has about 394 hotels in USA and territories.

Category-7 Hotels = 2 hotels (Key West, St. Regis NYC)

Category-6 Hotels = 13 hotels

(3 hotels moved up to Category-6 in 2008.
W New York, Westin St. John Resort, US Virgin Islands moved up one category while
the Le Meridien Beverly Hills jumped from Category-4 to Category-6.)

Category-5 Hotels = 45 hotels as of March 4, 2008
38 Hotels remain at Category-5 for 2008.
3 new hotels are being designated as category-5 hotels.
3 hotels increased from Category-4 to Category-5 in 2008
1 hotel dropped from Category 6 to Category-5
The decrease from Category-6 to 5 for Princeville Resort, Kauai is a major change for Hawaii lovers.

Category-4 Hotels = 113 hotels in USA for 2008
3 hotels are New Hotels
16 hotels are increasing from Cat 3 to Cat4
94 hotels remain at Cat 4

Category-3 Hotels = 131 hotels in USA for 2008
2 hotels are New Hotels
2 hotels decreased from Category-4 to Category-3
(Sheraton South Padre Island Texas, and Four Points Savannah Georgia
17 hotels increased from Category-2 to Category-3
110 hotels holding at Category- 3

Category-2 Hotels = 83 hotels in USA for 2008

3 hotels decreased from Category-3 to Category- 2 (2 in Orlando, 1 in Maryland, and 1 in Connecticut.)

4 hotels increased from Category-1 to Category-2. (One of these hotels, Four Points Fairview Heights, Illinois had been a Catategory-2 in 2004.)

76 hotels remained at Category-2


Category-1 Hotels = 7 hotels in USA for 2008

1 hotel decreased from a Category-2 to Category-1, (Four Points Chambersburg, Pennsylvania).

6 hotels remained at Category-1 and 5 of these hotels were Category-1 hotels in 2004
(1 Category-1 hotel is new to SPG since 2004, Four Points Kansas City Airport).

Shifts in SPG Hotel Categorization since 2004
The real shift is the proportion of hotels in each category.

2008 USA
SPG has about 394 hotels in USA and territories.
SPG had about 379 hotels in USA in 2004.
98 hotels from 2004 are no longer in SPG family. (Some of these may be the same property location, but were remodeled and/or rebranded. E.g. Four Points becomes a Sheraton.)

2008 Category-7 hotels = 2
2004 Category-7 hotels = 0 (There was no Category-7 in 2004.)

2008 Category-6 hotels = 13
2004 Category-6 hotels = 2

2008 Category-5 hotels = 45
2004 Category-5 hotels = 12

6 hotels at Cat-5 in 2004 remain at Cat-5
21 hotels at Cat-4 in 2004 are now Cat-5
4 hotels Cat-3 in 2004 are now Cat-5


2008 Category-4 hotels =113
2004 Category-4 hotels = 52

75 hotels or 66% of current Category-4 hotels were in SPG from 2004
18 hotels remain at Category-4 since 2004
56 hotels increased from Cat-3 to Cat-4 (10 of these just changed March 2008)
1 hotel increased from Cat-2 to Cat-4 since 2004


2008 Category-3 hotels =131
2004 Category-3 hotels = 103

94 hotels or 72% of current Category-3 hotels were in SPG in 2004

29 hotels remain at Cat-3 from 2004 to 2008
(Sheraton South Padre Island was Cat-3 in 2004, rose to Cat-4, and is dropping back to Cat-3 for 2008. Four Points Sheraton was Cat-3 in 2004, dropped to Cat-2, and is increasing back to Cat-3 for 2008.)

62 hotels increased from Cat-2 to Cat-3 between 2004 and 2008
1 hotel increased from Cat 1 to Cat 3 (Four Points PHL Airport)
2 hotels went from Cat-1 to Cat-3 (Both LAX airport area hotels)


2008 Category-2 hotels =83
2004 Category-2 hotels = 152

61 hotels or 73% of current Category-2 hotels were in SPG in 2004.
Changes are:
1 hotel in 2004 Sheraton Danbury Cat-3 is now Cat-2
1 hotel was Cat-2 in 2004, Cat-3 in 2007, and dropping back to Cat-2 for 2008 (Four Points Orlando Studio City)
42 hotels have held at Cat-2 (Four Points Fairview Heights, IL was Cat 2 in 2004, dropped to Cat 1, and is increasing back to Cat-2 for 2008)
17 hotels increased from Cat-1 to Cat-2


2008 Category-1 hotels =7
2004 Category-1 hotels = 58

6 of the current Category-1 hotels were in SPG in 2004.
6 hotels Cat-1 in 2004 are still Cat-1 in 2008. Four Points Chambersburg, PA was up to Cat-2 and dropped back to Cat-1 for 2008.