IHG Will Make More Money From Credit Cards, Gets New Chase Contract

This is interesting. The two IHG credit cards are relatively valuable, given that they come with free nights and second-tier platinum status for a relatively cheap annual fee. I wonder if the issue IHG has is its portfolio. If you take away Intercontinentals OUTSIDE the USA, Regent and Kimptons, find me an IHG brand that is truly desirable. IHG has the size to compete against Marriott or Hilton but on the whole IHG's properties are not as desirable as Marriott or Hilton. IHG's real competitor seems to be Wyndham and Choice, not Marriott and Hilton.

@ FNT Delta Diamond -- I definitely think you're onto something. But I also think it's worth emphasizing that just because the cards are worth holding onto for consumers, doesn't mean they're profitable for Chase and IHG. They want us to actually spend money on the cards, and the value proposition of spending is tougher than the value proposition for just holding onto the cards.

Meh. I'd rather stay at a HoJo, saving myself a ton of money and a lot of disappointment in the process.

I keep the two Chase IHG cards in my wallet for cash stays at IHG properties and as backups when I'm traveling, especially internationally since Mastercard has good global coverage. I'd be shocked if I put $100 in spending on the two cards combined every year. Their only value propositions are the free night certificates and platinum status. Whether it's spend on the credit cards or actual stays at IHG properties, prioritizing IHG just isn't worth it. Outside of Kimpton, there are only a few desirable IHG properties within North America. IHG's appeal domestically is in small towns and flyover America, where a Holiday Inn Express is often the best (and sometimes, only) chain option. Again, I think IHG's competitors are Choice and Wyndham.

$1000 in spending *

4th night free (Chase IHG Premier) and 10% back (Chase IHG Select) plus the free night certs make these cards very valuable to me. Also, there are many desirable Indigo hotels ex-US.

Hi Lucky. I still think you're biased against IHG. The 4th night free on points redemptions with the IHG Premier and Biz Premier cards is still the best across the entire industry, and yet you slam the IHG credit cards while always pointing out Marriott and Hilton's 5th night free offers (which I recognize aren't related to any specific credit card). The 4th night free offer has saved me hundreds of thousands of points over the last couple years. Furthermore, the two cards allow an unlimited top-up beyond 40,000 points for the annual free night rewards, while Marriott of course only allows a top-up up to 15,000 points. I also still think that Intercontinental Club Lounges are better than Hilton and Marriott Club Lounges, perhaps as a legacy of club access only being available to IHG elites (via Milestone rewards) only in the last 2 years. I just stayed at the stunning Intercontinental Tashkent with a beautiful lounge and spa. Yes, this blows domestic Intercons out of the water, but that's the case for all the chains.

@ Daniel M -- I think those are all fair points, and I don't disagree with any of them. I talk all the time about how great the fourth night free benefit on IHG cards is.

But the issue with the card portfolio is a lack of incentive to spend on the card, plus a lack of loyalty to the brand in the US. I mean, IHG's lack of profits from the credit card portfolio have to come from somewhere. Do you have a different theory?

@ FNT Delta Diamond -- Agree with you 100%, and I also have two IHG cards that mostly collect dust in my wallet. I love having them, but don't spend much on them.

4th night free isn't saving you any points with IHG when the first 3 nights cost 1.3x more than comparable properties with Hilton at a 1:2 transfer rate from Amex or 2x more than comparable Hyatt properties. The category spend rates on their cards are too low & the redemption rates are too high with IHG. 75,000 points for a night at a Holiday Inn is silly.

Yes you do talk about the IHG 4th night free benefit in many posts, but you left it out of this particular post, which is focused on IHG credit cards :-), so it was important to bring it up. In regards to lack of incentive to spend, I agree 100%. I only put IHG hotel spend on this card. But the beauty is that the 4th free night and the annual free night certificates are automatic without me needing to put any spend on this card, so in a way I like the status quo.

In terms of US hotels, I agree that IHG lacks enough luxury properties, and I'm really mad at the award pricing for the new Regent Santa Monica. However, I've had many delightful Kimpton, Indigo, and Voco stays domestically over the last two years, and the breakfasts at those hotels (even domestically) are awesome - with the Diamond breakfast benefit being equal to Hyatt/way better than Marriott. Finally, Intercon lounges are much more likely to have a club lounge domestically than Marriott or Hilton, and they are stronger - with the exception of Marriott M clubs, which are about equivalent to Intercon lounges. So I think the situation domestically is more nuanced.

I use my IHG cards so rarely that I locked them using the Chase app to prevent any fraud.

There are some good IHG pros. I had a decent stay at Voco Johannesburg - especially considering there was no hot water and the hotel responded well by refunding my stay. Free breakfast would be a game changer.

Agreed. It was an incredibly short-sighted decision to make people have to qualify for Diamond 100% on spend or 100% on stays. I'm not staying that many nights, and I'm not spending $40k on the card.

But if I could get part of the way there on spend and part of the way on points, I might shift the overall strategy both in stays and in card spend. But as it is now, why?

Intercontinental club lounges, at least within North America, are not better than Marriott. I can't speak to Hilton. I will concede that most or all of the Intercontinental lounges have free alcohol, which is more like a Ritz-Carlton lounge. But in my experience, the food offering, especially at breakfast, is more like your typical Westin-Marriott-JW Marriott club lounge than a Ritz-Carlton.

I would consider fully switch to IHG from Marriott and Hyatt if IHG:

1) Had one loyalty program. It still has the separate Intercontinental and Kimpton schemes.
2) Brought Crowne Plaza up to par domestically as a viable alternative to Sheraton-Westin-Marriott-Hyatt Regency-Hilton.
3) Offered something for diamonds at properties like Holiday Inn Express (for example, a market credit) or allowed lounge access membership to get breakfast at properties without a lounge.
4) Strengthened brand standard enforcement. The Holiday Inn properties domestically (even the ones built in 2010 after IHG dumped a lot of original Holiday Inns) are pretty awful. The newest ones don't even have a real restaurant. They've scrapped that for the Toast to Toast concept, which is basically the same thing as Courtyard's bistro.
5) Fix loopholes in the breakfast benefit. Properties like the Kimpton in Pittsburgh can avoid providing breakfast during the weekend and over holidays by only opening the restaurant for brunch.

Please compare apples to apples rather than apples to oranges. Nobody accesses Ritz lounges for free, so it’s not a valid comparison point with Club Intercontinentals - Ritz lounges are superior to Intercon but you’re paying an extra $100 to $300 a night. Also, with IHG Diamond, you get free breakfast at Intercon restaurants, so the lounge breakfast is less important, though I often stop by both at Intercons.

1. Right now you can double dip benefits for example by combining Diamond and Ambassador status at Intercon stahs. Combining into one would certainly devalue the overall benefits.
2. I despise Crowne Plaza domestically (and even overseas except in Asia where they are actually nice), but there’s almost always a stylish Kimpton or Indigo nearby that you can choose.
3. Disagree - if they opened free breakfast to people staying less than 70 nights (such as via the 40 night lounge milestone reward), then they would devalue it and make it more like Marriott’s shitty breakfast benefit. Making Diamond hard to get is what allows IHG to provide a bonafide full breakfast like Hyatt.
4. Great point. I also despise Holiday Inns domestically.
5. I’ve never experienced a breakfast loophole with IHG over the last 2 years - for me it’s been as good as Hyatt. Did you complain to management at Kimpton Pittsburgh and/or to IHG?

Get a Card that will get you Breakfast/Lounge. I have Both, But never spend a Dime on them. Capital One ($300K/yr), CSR $250K/yr) plus add extra 100K for Chase (Staples) Gift Card credit cards. No use for IHG cards/Hotels. IHG Hotels in Europe suck, Asian ICONs are worth staying.

I think Chase and IHG ought to take a page out of Amex and Hilton’s book and offer a cert for any standard award if you spend $15k on the card. That would get the card out of the sock drawer and make it relevant again as a spender.

I think it’s more that Hilton and Marriott are the outliers, rather than the other way round.

Hilton has an incredibly valuable card because it gives you diamond, 5th night free and an unrestricted award cert for very little investment.

Marriott does well because of their market power/borderline monopoly with upper upscale in many markets, plus the fact that they still seem to have an amount of goodwill with business travelers built up from the 90s and 2000s despite the rubbish they pull.

IHG on the other hand is not as strong in the US, which is the primary audience for these cards. They are weaker at every level except for maybe Kimpton and Indigo. HIE < Hampton, HI < HGI/Courtyard and Crowne < Marriott/Hilton. I’ve never seen a Candlewood I would consider staying at. The only unique thing is that
HIEs are great for families because they have affordable suites, but that isn’t a reason to direct your spending to a cobrand card.

HIEs can make

Fully agree. I'm Diamond Ambassador and happy they don't give away top status simply by signing up for a credit card. If they did, upgrades would be harder to get and the breakfast benefit would be diluted significantly. Top tier status should be earned, not given away for peanuts. When everyone's elite, nobody is.

..Indigo & Voco hotels ex-US.

Can you give some real world examples of Hilton properties costing that much less, please? Also, can you show us HI at 75K a night compared to a similar Hilton property in the same market? Thanks.

Sam,
You have had several days to respond with examples and haven’t. Therefore, it appears you just made up that stuff.