Home Points & Miles Unpopular Opinion: IHG’s Dynamic Pricing Isn’t A Massive Devaluation

Unpopular Opinion: IHG’s Dynamic Pricing Isn’t A Massive Devaluation

by joeheg

I wish companies wouldn’t introduce any changes on April 1st, but that’s exactly what IHG did regarding award prices for their properties. With no warning, the hotel chain fully shifted to the dynamic award model they announced in April 2020. While the system has been in place for over a year, it was hard to notice because the world was in the middle of a pandemic. Honestly, the biggest change was that there were many hotels available for much fewer points than they were before because no one was traveling.

We’re a year from that announcement and in a totally different world. There’s no looming global shutdown and with the help of vaccines, people are planning to travel again.

With hotel bookings way up, the changes from IHG’s dynamic pricing model are more evident. Hotels will cost more points on popular nights and fewer points when there’s less demand. It’s much like what Marriott Bonvoy does with Off-Peak, Standard and Peak pricing. In fact, IHG’s model seems to more closely resemble Hilton Honors, where a room at a Hampton Inn can cost 300,000 points a night.

Is this all bad news? Of course not. But it’s a great headline to say IHG DESTROYS LOYALTY PROGRAM!!!!!

IHG Rewards Club has never been the best loyalty program. I redeem points for any value over 0.5 cents because that’s what IHG occasionally sells them for. However, I’ve been able to get 1 cent or more value for redemptions, to the point where I’ve purchased points to book a reward stay because it was the better deal.

The points and miles community has suffered through so many devaluations that it’s easy to jump to the conclusion that any change is negative. For example, Marriott Bonvoy destroyed the SPG program and has constantly increased the number of points needed for awards by changing the categories of hotels. Airlines also devalue by increasing the number of points needed for a flight across the board. After reading about the IHG pricing model’s changes, I wanted to see how this could affect our travels.

Here are a few examples of award nights have gotten more expensive, along with examples of how they’ve also gone down in price.

Kimpton Arras – Asheville, NC

Last fall we stayed here for 50,000 points a night. Here are the award prices for 2 weeks around July 4th.

Prices range from a high of 53,000 down to a low of 29,000 points. That’s well within the range to redeem a free night from the IHG Rewards Club Premier card if you’re willing to stay any night but Friday or Saturday.

Over the same time period, cash prices ranged from $256 to $471 after taxes over the holiday, making the redemption value around 0.88 cents per point.

Hotel Indigo – Sarasota, FL

This is the hotel where I saved my dad $400 by using his free night certificate. Rooms in June and July range between 22,000 and 34,000 points a night. Lower than the previous 40,000 points they used to charge.

Cash prices range from $190 to $328—valuations around 0.86 to 0.96 cents per point.

ANA Crowne Plaza – Osaka, JP

I was the most surprised to see the range of award prices for this property, where a free night will cost between 30,000 and 60,000 points a night.

Kimpton Ridley House, Key West, FL

I was able to book a room at this hotel for 60,000 IHG points a night, which at the time was a great value. Looking at two weeks in June, award nights cost a low of 42,000 points to a massively high 90,000 points per night.

Cash prices are between $443 and $614 per night. Redemption values vary between 1.05 to 0.68 cents per point.

Candlewood Suites, New Braunfels, TX

Even our favorite hotel to stay at when we visit Schlitterbahn has variable pricing. Mid-week rooms are only 11,000 points, while weekend nights cost 30,000+ points.

Cash prices are between $110 and $164 per night making redemptions worth 0.51 to 1 cent each.

Candlewood Suites – Times Square

I wanted to make sure I wasn’t just cherry-picking hotels that still had good redemption values. I looked at a hotel that I felt previously was charging way too much for a free night redemption, the Candlewood Suites – Times Square, which previously charged 50,000 points for a free night.

The most points needed for a free night are 41,000, and some nights are down to 22,000 points. Cash prices vary from $183 to $237.39. Point valuation from 0.83 to 0.57 cents each.

Crowne Plaza – Times Square

The same goes for the Crowne Plaza, which used to charge 60,000 points per night for an award stay.

Only on Thanksgiving weekend do award nights cost 61,000 points. Other nights vary from 30,000 to 51,000.

The Willard Intercontinental – Washington D.C.

This hotel previously charged 70,000 IHG points a night for award stays.

For most nights in June, the hotel is charging 42,000 points a night, while for a few nights around the Juneteenth holiday the prices go up to 68,000 to 73.000. The average room rate is around $300 for that time frame, so you’re getting about 0.71 cents per point. The valuation drops to 0.41 cents per point for the expensive award nights, the lowest value of any that I found.

Final Thoughts

Since the changes, I’ve seen many articles saying how IHG points are now worthless and how horrible this devaluation is for the program. Some have suggested that IHG points are now only worth 0.35 cents each. After looking at several IHG properties that I’m familiar with, I found that the new pricing isn’t that bad if you’re flexible with your dates.

I could have highlighted the places where points are only worth 0.4 to 0.5 cents each but that’s not what I found when looking at several different properties around the US. I’m sure that there are some hotels where the award prices are very high and if you’re looking to go to some aspirational hotels around the world, you might need to pay more than you planned.

However, with prices going down on some nights, you can now use your free night certificate at more hotels than before.

It’s disappointing that IHG is charging more for some properties and that it happened without notice. However, it wasn’t really without notice because they announced this change was coming almost 1 year ago.

I don’t mind having a stash of IHG points. I recently received 140,000 points from the signup bonus for the IHG Premier credit card. When my account gets low, I wouldn’t be afraid to buy points for 0.5 cents each or less, even after this devaluation.

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This post first appeared on Your Mileage May Vary

2 comments

Carl WV April 3, 2021 - 7:05 pm

I checked Vegas and Virginia Beach as tests, Not getting .5 cpp.(more like .3 or .4) I guess it depends where you look.

I’ve decided my actions. The Hilton changes caused me to downgrade my Amex Hilton Aspire card to the no AF version when the $450 AF recently hit. Now I will likely drop the Chase IHG card when the AF hits.

My opinion of hotel credit cards is changing greatly. On the bright side, these companies are helping me to save money right and left.

Reply
joeheg April 3, 2021 - 7:20 pm

The biggest difference I found was including taxes when figuring the CPP. Adding 15%+ to the room rate makes a big difference with the calculation.

Reply

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