Similar to changes made by other hotel loyalty programs, IHG Rewards recently introduced dynamic pricing for reward stays. When you get word of a big adjustment in a loyalty program, it’s assumed to be negative. At least that’s my usual reaction. But this change might not be too bad. Actually, so far it looks fairly promising. After a bit of searching, it kind of makes me want to make a speculative booking or three.
The Evolution of IHG Rewards
There had been indications that this was going to happen. The points and cash feature had been switched up a while back and I had noticed that a Brooklyn hotel appeared to have some sort of seasonal award rate variation. I’ve also read on blogs that it had already been introduced in China.
Back when IHG Rewards was called Priority Club, using points was very straightforward. Some brands had only one reward rate. I recall when all Crowne Plaza hotels required 25,000 points for a free night. Of course, that meant that your points would yield terrific value in expensive destinations like London or New York but not so much at the Moncton Crowne Plaza, for example.
Over time, the rigid reward structure gave way to more variation within brands so those pricey destinations had higher reward rates to match their higher cash rates. Still, there were some sweet spots to be found if you knew where to look. Unfortunately, those became fewer and fewer as annual reward category adjustments eliminated many of them.
Vanishing PointBreaks
Despite the devaluations, IHG remained my favourite hotel loyalty program due to its regular PointBreaks promo. It was incredibly good value with all hotels on the PointBreaks list temporarily only 5000 points per night. Gradually lists came out with fewer enticing properties, with the most popular ones dropping off only minutes after its release. I always made sure to be at my computer refreshing the page until it went live. Then, they expanded the promo to include hotels at the 10,000 and 15,000 point levels. Although it meant more choices, this move effectively scrapped the 5000 point deals as the hotels on that short list were mostly in mainland China.
I’m not sure whether the removal of my beloved PointBreaks was a precursor to this transition, but I suppose the new reward rates could have a similar purpose – that of filling hotel rooms during slower periods.
New Variable Rates
If you search in a few different locations, you’ll notice that not all hotels have moved to the new system. There are a lot of hotels displaying their previous static point rates. For instance, no hotels in the Maritimes are currently showing variable rates that I can see.
However, a significant number of hotels in a variety of destinations are indeed showing much lower point redemption rates. With travel in 2020 still a question mark, I searched 2021 dates when trips are perhaps more likely to be a reality.
The results for a multi-night stay reflect the average daily rate. At some hotels, the redemption level moves up and down quite a bit, while others have no variation for days or even weeks at a time.
Many of the of corresponding flexible cash rates for these stays seem awfully high, especially in light of current events.
The notation regarding taxes being included or excluded is a bit strange for a reward stay but I suspect it’s showing up in all search results now to clarify whether cash rates are “all-in” or not, depending on the country.
Here are a few examples:
March 14-19, 2021 in New York City – 21,500 Points
The flexible cash rate on these dates is $264. I stayed at this Staybridge Suites in 2013 for I believe it was 20,000 points per night shortly before reward rates increased. I think its most recent rate was around 40,000, but all the Manhattan hotels were off my radar for redeeming points as of late, so I’m not exactly certain. I see that it’s currently 50,000 points on New Year’s Eve.
When searching, remember to watch for any abhorrent extra fees. This one’s not too bad at 5 USD. The Crowne Plaza Times Square has an outrageous “amenity fee” of 40 USD.
April 24-30, 2021 in Vienna – 17,500 Points
An InterContinental in Europe for under 20,000 points per night is a rarity to say the least. Best flexible cash rate on those dates is $296.
May 2-7, 2021 in Vancouver
Super deal for Vancouver. The flexible rate at the Holiday Inn Vancouver-Centre (Broadway) is a whopping $360. Reasonable reward rate options disappeared in Vancouver a while ago so this is a welcome sight.
May 1-8, 2021 in Krakow
Fantastic. I stayed at this Holiday Inn in Krakow in 2016 when it was 15,000 points per night and it subsequently moved up to 25,000 points. The newer Indigo was 30,000 points. Flexible rates on these dates are $198 and $229, respectively.
Impending Doom?
What’s the catch? Are these rates a little too good to be true?
The worry among points enthusiasts is the possibility that dynamic pricing will eventually put the high-end aspirational properties out of reach and make reward rates skyrocket at popular (and expensive) travel times.
As a budget traveller with minimal interest in luxury accommodation, I’m hopeful that these new variable rates will represent good value for those with flexibility around travel dates and destinations. However, I expect the terrific ones will become a little less abundant as travel resumes after pandemic lockdowns end and travel advisories are removed.
Who knows how it will work out. I find these new rates a bit puzzling. I’ve seen drastically reduced reward rates for May of next year in the absence of any corresponding reduced cash rates. And in one case, two hotels were 17,500 points per night when one’s rooms were double the cash price of the other.
Apparently the lowest category of 10,000 points is still in place with no variation at those properties. I checked a couple of hotels I’m aware of at that redemption level and they remain at 10,000 even though other hotels in the same city are available at heavily reduced reward rates. So that’s a little weird as well.
Earning IHG Rewards Points
I’ve accumulated IHG points by capitalizing on targeted or stackable promotions, the occasional good value bonus point package rate and e-Rewards surveys. Right now, earning points through stays is not really on the table, at least in terms of leisure travel. It would be nice if IHG would do some sort of online promotion to earn points. The best one ever was the global geography trivia contest. At least it was nice till the bots took over and ruined it. I’m still annoyed.
Purchasing Points
As always, the general rule is not to buy points unless you have a specific use in mind where you know you’ll save money, or you just need a top-up for a redemption. Until June 15th there’s a 100% bonus on point purchases, but remember that as a Canadian resident you’ll have to pay HST. Although you might find a deal using these new variable rates, you’d have to lock it in in case it changes and then pray to the travel gods that you’ll actually be able to take your trip. The backdoor method to acquire points is to book a cash + points stay at a hotel with a favourable cash + points rate and then cancel to get the refund in points. This is probably fine to do once in a while but I wouldn’t abuse this method.
Cents Per Point Value?
Is there a benchmark value you should try to achieve when redeeming IHG points? Maybe, but I don’t have one. I do not dive deeply into the murky area of subjective valuation of loyalty points. I have a ballpark idea of when it’s worth it for me to use various points that has come from years of collecting and redeeming and it’s specific to my needs and preferences. I like to get free lodging. My decision is influenced by a number of factors, such as:
- Where do I want to go?
- How badly do I want to go there?
- How many points do I have?
- How much is the cash rate?
- Does the reward rate feel acceptable to me?
- What are all the accommodation options, either with other point currencies or with cash?
- Are there any good points-earning promos for cash stays?
Good News…For Now
After searching a few North American and European destinations, these new variable rates seem to be a positive development. I’m considering making a couple of speculative bookings for 2021 in case the new sweet spots start to become more elusive. Maybe they’re trying to ease people into the change by presenting it as all upside right now. And with COVID-19 affecting the travel landscape so severely, who knows how everything will shake out with all of the loyalty programs as the situation progresses.
I’m happy for any bright spot amid the gloom and stress of 2020, even if it’s just a good potential point redemption for a trip I know might not actually happen. Once travelling becomes a normal activity again, I sure hope these good reward rates remain readily available.
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