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

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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. “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.

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

  3. 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.

    • @LondonfFoodie Just out of interest how did you get to Bora Bora? Did you use Avios?

  4. 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…..

  5. 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.

  6. 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.

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

  8. 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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