Starwood has announced its new hotel award categories which will govern redemptions beginning March 4.

Each year they recategorize hotels which means different point amounts required for redemption. Last year was the mother of all recategorizations, tons of hotels around the world costing 42% or 60% more points than in the previous year. Set off a firestorm, really.

The Starwood program sets each hotel’s category not by the hotel’s quality (as some people often misunderstand, eg “that hotel was awful, how can it be a category 4?”). Rather, they set the category based on a hotel’s average daily room rates in the prior year.

With higher hotel prices, it’s taken more points than before to redeem. But that’s not the only thing that drove last year’s recategorization. The way that Starwood accomplishes its heralded ‘no capacity controls’ policy (if there’s a standard room at the hotel available you can book it for points) is that if a hotel’s occupancy rate for the redemption night exceeds 90%, the hotel gets paid its average daily room rate for that night. It’s much more expensive for the program to do that rather than pay the deep discounted standard redemption room rate, but it allows them to obtain the award nights from the hotel. With occupancy rates so high, Starwood was paying out a lot more of those average daily room rates to hotels. Their costs were soaring.

Fortunately this year’s adjustments aren’t nearly so brutal.

It’s always especially disappointing to see hotels moved into the new category 7 that was created last year. Looks like there are (11) new hotels going there:

• Hotel Prince de Galles – Paris Champs Elyssees

• St. Regis Rome

• Mystique in Greece

• Cervo Hotel, Sardinia

• Hotel Eden, Rome

• Danieli, Venice

• Hotel Marqués de Riscal, Spain

• Hotel President Wilson, Geneva

• Sheraton Park Tower, London

• Le Meridien Bora Bora

At least the Princeville Reort on Kauai drops from category 6 to category 5, which is nice since I’ll probably redeem there sometime in the next year.

The biggest bummers for me are that the Westin St. John, Hotel Grande Bretagne in Athens, and Le Meridien Barcelona are both going to category 6, along with the Sheraton Moorea (which was one of the best values in Starwood at category 5, and was truly amazing back when it was category 4).

The St. Regis Beijing (currently undergoing renovations, so I can visit there on my upcoming trip, bummer) is moving up to category 6 … while the St. Regis in Shanghai is dropping from category 5 to category 4.

When a hotel goes from category 5 to 6, the low season redemption prices go from 12,000 to 20,000. That’s a shocking two-thirds increase!

And most offensive is that the truly terrible W New York is as well. Pretty much no reason to ever redeem there, pick any of the other New York W’s instead for the same number of points (high/low season considerations aside). The last time I stayed at the W New York I had a bathroom so small that when you sat on the toilet you had to angle your arm underneath the sink. And I’m not a particularly big guy.

The lovely Le Meridien Limassol on Cyprus is going up to Category 5, their Platinum recognition is great and they have lots of suites, I’d say that hotel remains well worth it at the increased number of points.

I’d guess that the bumps in Australia (Westins in Sydney and Melbourne and the Sheraton in Noosa going from category 4 to 5) have more to do with the strength of the Austrlian dollar agains the US dollar… their room rates are higher in dollar terms as a result, that’s probably driving the higher average daily room rate which for Starwood Preferred Guest redemption purposes is denominated in US currency.

So what do you do? Thankfully, Starwood has posted this information better than two weeks in advance. We don’t have to wait until the changes take place to know what they are! So book your redemptions now for any hotels going up in category! And since in most cases these redemptions are fully cancellable (within the hotel’s normal cancellation rules), you can make speculative bookings and cancel or change later if your plans change, all that you’ll lose is the savings you’re reaping now by booking at the current redemption rate.