A devaluation or a bargain? IHG drops purchase price of points to 0.6c

In general, when I write about IHG Rewards Club (the Holiday Inn, Crowne Plaza, InterContinental scheme), I say that I value their points at 0.5p.

This is based on my tendency to redeem 50,000 points for five-star hotels which would otherwise cost £250 per night.  The maths also often works at lower price levels if you tend to redeem at mid-market properties.

There was always a problem with this 0.5p valuation.  It has always been possible to buy IHG Rewards Club points via a special method for 0.7 cents.  This is 0.47p.  It is obviously wrong to value a reward point at more than it would cost you to buy them but, given the small difference, I didn’t lose any sleep over it.

I am now forced to reduce my valuation of IHG Rewards Club points to 0.4p.  This is because IHG is now selling them in unlimited quantities for 0.6 cents.

IHG Rewards Club 350

Let’s take a step back

IHG isn’t ‘officially’ selling them this cheaply.  If you go to the ‘buy points’ page on the website, you will see that points still cost $13.50 for 1,000.  This is a long way from $6.

However, IHG has a rewards option called ‘points and cash’.  If you try to book a 35,000 points per night property, you will be offered the following:

35,000 points, or

30,000 points + $40, or

25,000 points + $70

If you book a room using the second or third options above and then cancel it, you do not receive any money back.  Instead, you only receive points back.

This means that you are effectively buying points for 0.8 cents in the first example and 0.7 cents in the second example.

What is new?

Over the last couple of days, a new option has started to appear.  Using the example above, it would be:

20,000 points + $90

If you booked and cancelled a redemption using this option, you would gain 15,000 points for a cost of $90.  This is just 0.6 cents per point, or 0.40p.

Only a few hotels have loaded this option so far.  The InterContinental Hong Kong is one of them if you try a dummy booking for that.

What does this change mean for me?

If you are booking an IHG hotel for cash, you should now work out the cost of buying the points via this ‘points and cash and cancel’ method.  The Indigo Earls Court in London, for example, is 30,000 points per night.  If it is selling for more than £120 – which it normally does – this route would be cheaper.

Similarly, the break-even point for a 50,000 points per night InterContinental is now £200 per night.  If a room is selling for more than that, buying the points may be the answer.

You may also want to re-evaluate your Accelerate promotion targets.  Your bonus is now worth less than it was.  If you were planning a mattress run to achieve your bonus, make sure it still makes sense at a valuation of 0.4p per point.

Whether this move is a precursor to a wider IHG devaluation in 2016 remains to be seen.  I doubt we will see many changes at the 3-4 star level but the 50,000 point per night ‘cap’ on InterContinental redemptions is looking a little soft in my view.

(Want to earn more hotel points?  Click here to see  our complete list of promotions from the major hotel chains or use the ‘Hotel Promos’ link in the menu bar at the top of the page.)

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Comments

  1. If IHG devalues, it will hit them quite hard, they are ones without tangible status benefits and so go to the end of the loyalty queue (plus their properties are usually more expensive than comparable hotels in the same city, overpriced one would say). Continuing ‘category creep’ is more likely but already noticeable with most Crowne Plaza wanting them same points as Intercontinentals, and Holiday Inns for all sakes wanting 5-10k less. Yes, Intercontinentals might want to differentiate BUT they can’t charge more in cash because of general competition, so if they increase to 60,000 per night they will start looking really unattractive, even within the IHG as one might find a property for 25-30K a night.

    • This would make the 31,000 they are offering me through Accelerate worth about £124.
      Makes it look less attractive if I can’t work a really cheap run in somewhere.

  2. We booked a week on points at the new Indigo, New York East Side to pair up with our £400 ex CPH J fares.

    This was 30k points a night but when I price up now it’s moved to 45k!

    • When IHG opens they usually provide discounted redemptions for a while, that’s why it’s always worthwhile checking out new hotels before booking your usual one.

      • I was chuffed – we were going to return to the Staybridge Times Square which we had previously enjoyed but when I saw this hotel was new and less points I thought we’d grab it. No breakfast included (unlike Staybridge) but plenty of options locally I imagine. Reviews online seem good to date.

  3. If they devalue, do you think IHG will give any forewarning? It would be useful if they provided a window of opportunity to redeem before any changes kicked in. Does anyone know how they’ve managed this historically?

  4. I’ve had a number of recent stays in London for various reasons and IHG has certainly not seemed like good value for cash stays. Maybe it’s better in other cities?

  5. Is there any experience of IHG pulling up people who have abused this system?

  6. Hi,

    apologies for going totally OT but aware people tend to read most recent articles..

    bit of a novice at the points game, but reading this website with increasing interest…

    wondering if any readers or Raffles can share their expertise…

    am London based, and I need 120 BA tier points (I have 480) by 1st march when my membership year runs out…no travel planned before then unfort

    anyone able to advise me the cheapest way to get those tier points…am happy to do a tier points run anywhere in Europe etc?

    have done the maths and i think as I fly several long haul a year in prem economy/economy, the savings I would make over a year by being silver and not having to pay to choose my seat in advance justifies it..

    tks in advance!

    luke

  7. Irons1980 says:

    Sorry to be contrary but I use IHG because I like their hotels! Some ICs in Europe, Asia and Indigos/CPs in UK offer good value for money and being Ambassador gives nice benefits at ICs – I earn 250,000+ points a year fropm stays and actually in the end I use the points to redeem at hotels I want to stay at.
    The IC Times Square is however a complete waste of money and / or points…

    • Why do you say the IC Times Square is a waste of money?

      I’m going to NY next week, that was one of my options.

      • The IC totally worth it, except when they price it at $400+ a night maybe, but their hotel rooms are amazing, especially when you are ambassador and get upgraded to a corner suite on the top floor. I will definitely suggest that hotel to anyone on points and status!

      • I like the rooms. Hotel has no public space – at all – which is the big issue. It is more like a block of flats than a hotel. Nowhere to hang out, no lounge, no pool, no shops. Just a reception desk and a lift. Even the restaurant is run externally.

        • Irons1980 says:

          It’s completely overrated – rooms are basic (for an IC) there’s no lounge or pool, staff and service are average to poor and f&b are stupidly expensive. Ambassador privileges are not very much and my upgrade was simply to a room with a higher floor and 2 beds rather than one – with tax was almost $500 a night room only. Rip off

          • Not bad for £200 on reward tho’ when you compare to central NYC prices?

          • Is it worth £150 per night? I don’t have any status. My other option was the Sofitel £220 per night in the larger room and a good chance of an upgrade with platinum.

            Any advice?

          • It is a new modern hotel in a central location with few facilities. Never seen a review of Sofitel. If it has a lounge and you are Accor Plat I may be tempted.

  8. I have been building up a significant balance of IHG points. That fact alone materially increases the chance of a devaluation. Damn.

  9. It would certainly seem that IHG is moving towards a devaluation. As Raffles pointed out in his article about the Accelerate promotion, it is theoretically so much more generous than the competition’s offers. So there must be a catch. This new development only backs up the idea that the points are due to become worth less in redemption terms.

    A lot of people are probably booking cash stays to meet the Accelerate targets, rather than using points for free nights, and thus building up large balances which will probably lose value.

    • Accelerate is generous only in relation to other other hotel group promotions, compared to similar promotions previously run by IHG themselves accdlerate is quite poor. Points need not be lost for most collectors if IHG follow pattern and give notice of any changes. Personally, I think ICs will icrease to between 50 and 75k depending on location. I think we may also see pointsbreas change in some way.

  10. Slightly OT, just received my Spire Elite card in the post. Only points credited to my account is through the 60k promotion IHG Rewards Black Card and further credits through the card each month.

    How did I make Spire Elite?

  11. “Similarly, the break-even point for a 50,000 points per night InterContinental is now £180 per night. If a room is selling for more than that, buying the points may be the answer.”

    I’m not sure how you figure spend £200 (50K x 0.4p) on points is cheaper than spending £180 for a cash stay ?, perhaps a typo.

    Also you need to consider the points earned for a cash stay. A £200 cash rate will earn a Spire member around 6000 points (£24), which when taken into account means that the overall room cost is around £176. You really need to be north of £220 a night cash rate before buying 50K points becomes the smart thing to do. A bit less if you are a basic member.

  12. I would also mention that this makes the PointBreaks even more appealing, with rooms at $30.

  13. LondonFoodie says:

    The best value IC redemption for me were the Bora Bora ones. I used the two free nights from an into the nights promotion last year (2 stays at Holidays Inn of £60 p/n) to redeem at the IC Le Moana Bora Bora and then stayed for a few more nights at the Thalasso. Hard to find availability of you do find – that’s incredible value at 50k points.
    I guess it really varies by city – some ICs are wonderful.

  14. Is IC Ambassador worth paying for if you only do reward and not cash stays – do the benefits apply to reward stays?

    • Well one way to look at it is to consider the free w/e night you get with Ambassador. This costs 32,000 points for a new Ambassador which at 32000x .4p = £128. But you get 5000 points back for joining so 32000-5000 >27000 points which “costs” £108. So will you use your free weekend certificate for somewhere which would cost at least £108 per night? Probably. Obviously you need to be prepared to tag on a paid night to use the weekend certificate. This was ultimately the deciding factor for me. A night at the IC Times Square in June is currently £248 cash per night for example or “£200” in reward points. I’m sure my maths will be corrected if I’ve got it wrong….

    • And officially some of the benefits apply to reward nights but not all – the 4pm check out should apply. Not the upgrade though.

      • Ok, thanks. It was the upgrade which was most appealing for a longish stay… :)

      • How odd. Does that mean that I get my guaranteed upgrade for the paid Friday night, but not the free Saturday?!

        As regards the OP’s question: whether it is worth it is very dependent on your own personal circumstances. I do not travel for work so all of my travel is holiday which means I spend a lot less time in hotels than many do. However, I’ll rack up something like 16 nights at Intercontinentals in my first year as an Ambassador, and for me it is well worth it. The free night aside, I had a really amazing upgrade at the IC Koh Samui (which I would have paid $200 for alone), and I put real value on the early check in/late check outs too. That alone has been well worth the $200 to me even though upgrades at a few places have been… minimal. Ambassador actually makes me book IC by default now. If I travelled with work and spent 30+ nights at ICs a year, Ambassador would be incredible value.

        • I’m only going by T&Cs and anecdotal reports. Rob has commented on this issue many times. Sometimes you get lucky etc…..

  15. Advice please. Need to book 5 nights in Boston 23-28 Mar 16. Any advice on a good place to stay? I note there is an IC, does anyone know if it is any good? Currently priced between $239-379 per night. I have sufficient points between my partner and I to book all as reward nights but would it be better to book a mixture of reward and cash bookings depending on nightly price?

    I am Spire but my partner does not have status so if we mixed the bookings up would we retain my benefits or would they make us move rooms. Also would it be beneficial to pay for ambassador status before the stay and then use the free night over the weekend?

    • Sussex Bantam says:

      I’ve used both the Marriott and Sheraton at Copley Square. Both are decent enough chain hotels within walking distance of most of the sites and close to the T to get further afield.

      I’ve not used the IC although I note it is on the Waterfont which many would argue is a better location than Copley Square – although in March I’m not sure how attractive strolling along the harbour will be….

    • Are you working on the basis that Spire will get you any tangible benefits at an IC…..?

    • I’ve reviewed it on HFP and I think it is excellent.

      You can see the free weekend night pricing at ihg.com/ambweekend so you can see what room categories are available and at what rate.

      • Thanks for the pointer to your review. Unfortunately as I am not an ambassador member yet so I can not view the rates. Will the basic room will be the same as the advertised Best Flex Rate so I can use it as a comparison?

        At the moment 5 nights is coming out at $1524 inc tax so pretty much the same price as using points. Will have to play around with individual nights to see if that makes using points better value.

    • Stayed there for two nights end of May 2014 with family. Ambassador status got us upgraded to a harbour view suite overlooking the tea party museum. Nice pool and terrace too.

      Also stayed at the Hilton Faneuil Hall a couple of blocks away for 3 nights on the same trip. This was also pretty good, although IC better IMO.

      • Thanks for the advice on the Hilton. It is coming out $200 cheaper than the IC and will include breakfast as diamond member so good value. However, will need to check if joining ambassador and using the free night voucher will make them the same price as the IC looks a better hotel.

  16. Jumble Tales says:

    If a IHG points devaluation were to happen, would it make paying the £99 premium Visa fee less worthwhile now for the second year of membership?

    • Yes and no, because the free night voucher is a free night voucher – irrespective of how many points it needs. Obviously the ‘day to day’ points earned would be worth less though.

    • It actually wouldn’t make any difference as the reward for hitting the spend threshold is a free night in any property rather than a quantity of points.

  17. Any news on the longly awaited and announced Spire benefits?

  18. Thanks for the info.

    Another longish comment from me but not a question this time. Instead a statement showing the wide variation in cash and points prices. For my accelerate I have to make a booking with cash and points, and i have to have a stay in january, so i thought I could combine these. i started off looking at the hix at slough, 15000 pts plus $70 (which i worked out about 48 quid) was about the same price as the cash advance price. However, nearby was the hix in windsor, 10000 pts plus $70 or a cash price of about 70 quid. A much better deal. It certainly pays to look around and be flexible in your destination.

    I also understand how the “cash and cancel” trick works now, because when you book with cash and points it actually makes you buy the points up to the points-only price; that is why you just get points back again when cancelling!

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