IHG Rewards Club Dials Back Devaluation

Filed Under: IHG Rewards

It looks like IHG Rewards Club has somewhat dialed back its award pricing devaluation, though only time will tell to what extent.

The basics of the IHG Rewards Club devaluation

Several days ago IHG Rewards Club significantly devalued award redemption rates. While IHG Rewards Club didn’t have any sort of an award chart, the program did have some unofficial caps on how many points were required for a stay.

With this devaluation, we saw award pricing become truly dynamic, with free night redemptions pricing at levels we had never seen before. While IHG Rewards Club rolled out dynamic award pricing nearly a year ago, there wasn’t initially that much variance in terms of award rates.

As an IHG Rewards Club spokesperson justified these changes:

“We rolled out our Dynamic Pricing models to our hotels around the world last year which enabled the amount of points required for IHG Rewards members to redeem a Reward Night to flex up and down, just like cash rates.

Previously, Reward Night point amounts were static throughout the year. This model allows point amounts to decrease when demand is lower, providing greater value to our members.

Conversely, redemption amounts may also increase based on demand  and other factors and can update as often as daily. Reward Nights are not defined by categories or with minimum and maximum point amounts.

Under our new model, the number of points required for Reward Nights will vary with demand and seasonality.”

Award prices at the InterContinental London increased significantly

IHG Rewards Club rolled back some of these changes

It would appear that within the past couple of days, IHG Rewards Club has significantly rolled back some of these award pricing changes. No, pricing isn’t as good as it used to be across the board, though many awards cost a lot less now than they did earlier in the week.

Previously there was an unofficial cap of award nights not costing more than 70,000 points per night, with the exception of a few properties. Unfortunately we’re still seeing lots of hotels price higher than that, though at least mid-tier properties seem to have more reasonable pricing once again.

Only time will tell how this evolves. Was the pricing unintentionally aggressive at first, and that was fixed, or was there so much backlash against the program that the decision was made to somewhat reverse course?

Regardless, if you’re looking to redeem points or a free night certificate, take another look at pricing, because it does appear to be more reasonable once again.

Many IHG properties are once again more reasonably priced

IHG Rewards Club’s devaluation is ridiculous

Here’s the thing — if IHG Rewards Club wanted to switch to full-on dynamic award pricing, then fair enough, that wouldn’t be totally unreasonable. The issue is how IHG has gone about it.

IHG claims that the cost of reward nights will be dynamic just like the cost of stays at hotels when paying cash. There are a couple of issues with that, though:

  • If pricing is truly dynamic, then the program shouldn’t have blackout dates, but rather the number of points should simply reflect the price; IHG Rewards Club is one of the only major hotel loyalty programs to have blackout dates
  • If pricing is dynamic, then why isn’t it actually correlated to the cash rate of a hotel stay? It doesn’t make sense if a hotel charges $200 on two different nights, but one night it would cost 40,000 points, while the other night it would cost 60,000 points

Essentially IHG wants to have its cake and eat it too. It wants pricing to be dynamic when it’s convenient, without offering the flexibility that usually comes with dynamic pricing.

IHG rolled out dynamic award pricing while still having blackout dates

Bottom line

To some extent, IHG Rewards Club seems to have dialed back its award night pricing devaluation from earlier in the week. While pricing isn’t as good as it once was across the board, award pricing for many hotels seems to have decreased significantly.

If you’re looking to redeem IHG Rewards Club points, I’d recommend taking a look at hotel pricing once again, because you never know how long the current pricing will last.

Anyone have any data points on hotel pricing now compared to a few days ago (or even now and a week ago)?

  1. This recent respite notwithstanding, I fear this temporary spike may be a glimpse behind the curtain of things to come. Over the past 5 years, between the 2 IHG credit cards that offer 10% point rebate and 4th night free, my average redemption rate has been 1.2 cents per point, with the lowest being a couple of nights (thus not eligible for 4th Night Free) at 0.6 cents at the Intercontinental in Hong Kong and the best being 1.68 cents at a HIE in the middle of suburban Oklahoma. As such, I had put an absolute floor of value at 0.6 cents per point, but with the recent “reverse flash sale,” I see it possible that the floor may drop substantially in the near future to around 0.4 cents per point (a la Hilton), and the average redemption below 1 cent even when stacking 10% and 4th Night benefits. Moreover, this may come with little to no warning when its least expected. The moral of the story: burn through the remaining points I have ASAP, significantly lower expectations for IHG point values, and rely increasingly on cash back and AmEx Schwab Platinum-type redemptions for points rather than trusting any brand-specific points/miles program.

  2. Another issue that was not discussed here yet, that a particular hotel could be available for 40K or even 32K points but it would be unavailable for booking as Chase Free night. My wife called IHG and was simply told that it is up to hotel to decide on the availability and that they cannot do anything, like convert 32K award booking to Chase night. This is direct violation of term and conditions from the Chase website. Perhaps, I should contact Chase.

  3. @Ryan I would get it in writing from ihg, maybe a chat/message. Then send it to chase’s executive office. I’m sure chase would be very interested to hear about it. Don’t just call the number on the card, try to run it up the chain at chase.

  4. I still have the old IHG Chase card so the value is still there but I will be extremely hard pressed to apply for the new card even with the discount on 4 reward nights. I checked the hotels that I like staying at, and most increased their point requirements even after the dial back. So if you are looking at applying for the new Chase card do it with an open eye.

  5. “If pricing is dynamic, then why isn’t it actually correlated to the cash rate of a hotel stay? It doesn’t make sense if a hotel charges $200 on two different nights, but one night it would cost 40,000 points, while the other night it would cost 60,000 points”

    IHG reimburses award stays to hotels by a flat rate that’s about 20-30% of their ADR, but if occupancy is over 95%, they pay out the full ADR for that night. IHG likely has an algorithm to calculate the likelihood that the hotel will be over 95% on any given day and factors that into the points they charge.

  6. “IHG likely has an algorithm to calculate the likelihood that the hotel will be over 95% on any given day and factors that into the points they charge.”

    This is probably true, but data analysis is not precise especially trying to pin point it to the day. I am fine if they decide on a peak and low season points. In that case, everything is upfront and we all know the rule. The so call dynamic pricing is black box operation that only the company knows the rule. From a consumer point of view it is difficult for me to be loyal to these companies.

  7. Actually, I do. I just booked 4 nights in Ocean City, MD for a stay in late August about a week ago. The two Holiday Inns were each 50,000 points each a night. I checked yesterday, and the one I booked at went up to 72,500 a night despite the room prices dropping in prices from when I booked. I just checked now, and it dropped to 71,500, but the other one lowered to 40, 500. Weirdly, the standard room rate is set higher by $50 or more than if you select one bed or two.

  8. Just an FYI Stephanie if you are not from the MD area and are looking for a quieter vacation. The Holiday Inn Express in OC is a bargain. It is down the beach from the boardwalk, but IMO the beach is nicer and it has a great park behind it. It is across route 1 from the beach, but the redemption rate even in the summer is in the 20-25k range.

  9. With no free breakfast for any elites, zero upgrades on points stays (it’s IHG policy), rampant blackout dates and the lowest point value yield for your dollar—is there anyone left to defend this loyalty program?

  10. Kimpton Palm Springs used to top out at 60k points, often as low as 32k points on a weeknight. Quick search now shows 91k points for a weeknight with all weekends blacked out. What a joke.

  11. Has membership feedback/backlash forced a hasty retreat?
    How many actually complained direct to IHG, as opposed to expressing outrage on-line?
    Do IHG and other hotel chains monitor sites such as this one to ‘adjust’ their ham-fisted changes when things get too hot?
    We know airline frequent-flyer programs certainly don’t give a toss about what their members think about anything.

  12. I am currently at an IGH hotel in Mount Pleasant, SC. The manager does not understand the Rewards program at all and refuses to honor my Spire Elite status free room upgrade. Not a points stay, I’m paying the daily rate and being treated like there is no loyalty program at all. It’s far worse than a joke.

  13. I seriously will be spending my nights at better ran establishments. The last two stays at different locations both ended in me leaving early due to roaches in the Rooms, and ihg has yet to offer even a free room. This combined with the lack of customer appreciation leaves me going to places that show more consideration for their guests, who are the reasons for their existence.

  14. The shenanigans with hotels making their award nights 41,000 a night to avoid chase award night redemptions is the final straw for us. I was annoyed by the cap on the chase night redemption to 40,000, but understood this was the way these were going. Allowing hotels to set prices to avoid this award type altogether though makes these practically worthless. We used to spend time in early January at The Clement in Monterey, slow season when the weather is awful and the occupancy is 50%, and could redeem our award nights. Now it doesn’t have nights for less than 41,000. Ditto for The Mark Hopkins in SF. What a bunch of shit.

  15. I am feeling increasingly happy with my decision to ditch hotel loyalty programs and their shenanigans and just book the cheapest possible rates. It is usually much less expensive to book through Hotwire, Priceline or hotels.com than it is to book direct, and you have the freedom to choose any property. If hotels want to cut off their noses to spite their faces, that’s their right.

  16. My searches for Rewards Nights frequently result in none being available at any amount of points for any date selected. This is especially true for the Club Vacations properties. I tried searching each and every week throughout an entire year and beyond and found none available. What good are the points if you can’t use them for their intended purpose? Time to switch brands.

  17. I still have the old IHG card and managed to use two free nights at Hotel Indigo in Anaheim booked for May without any issues. I’ll see how I feel about the card going forward. – it’s only $49 so worth it just for going to Disneyland once a year and staying near the park. However, I likely won’t upgrade to the new card which they’ve tried to get me to do for a couple of years now.

  18. It would be great if IHG would be less transparent about their Rewards Club program, changes, promotions, etc.

    Can’t they provide a point of contact to be the “face of the program” and provide updates from said person? Pretty tired of dealing with overseas service centers that mask all of these situations and add frustration to members. I can’t get real answers and waste too much time hoping they truly will resolve issues. Looks like even travel bloggers can’t get straight forward answer or have a point of contact, ala “ To some extent, IHG Rewards Club seems to have dialed back its award night pricing devaluation from earlier in the week.”

    Why not do some digging and get statements from IHG with facts? Can you use your pull to help everyone out with this? I’m sure many would appreciate it.

  19. My wife and I have had the old $49 IHG cards for years, and I also got the $89 one when it first came out for the big SUB and 4th night free benefit. I never had a problem using the free night certificates before, but now between the two of us we have 6 nights (3 carried over from 2020 and 3 from this year) and I am having a hard time finding somewhere to use them.

    For example, I was looking at rates at the Kimpton Palomar in Philly for a weekend in May. For Friday night, its 68K points or $200 cash rate. For Saturday, the points rate stays at 68K, cash rate goes up to $224. For Sunday night, the points rate plummets to 28K while cash rate goes down only slightly to $184. Then if I look at Monday night, the points rate goes back up to 54K but cash rate goes down to $176. It makes no sense and clearly the points rate is not actually tied to the cash rate as IHG stated it would be when they switched to dynamic pricing.

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