Starwood have confirmed that they have partnered with Virgin Australia to enable Starwood Preferred Guest members to transfer their points from Starwood to Velocity.
There were signs last year that this might be happening, with Velocity briefly appearing as a transfer option on the Starwood website.
The transfer rate is 1:1, and a transfer of 20,000 points will earn you an extra 5,000 Velocity points in your account too.
Starwood Preferred Guest points can be earned in Australia from stays at the variety of Sheraton and Westin hotels around the country. You can also transfer points to Starwood from American Express Membership Rewards at 2 Membership Rewards = 1 SPG point.
Given you can already transfer Amex MR points to Velocity directly at 1:1, there’s no opportunity for arbitrage but it’s worth reminding you of the Starwood transfer option with Amex, it’s one of the more valuable uses of Membership Rewards points.
I would usually value an SPG point at double that of Velocity, given their flexibility to transfer to many major airline programs around the world, so using them for Velocity redemptions probably isn’t the best value, but it’s a useful option to have.