IHG Rewards Club “moving to variable points pricing”

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Is IHG Rewards Club “moving to variable points pricing”? It might be.

InterContinental Hotels Group, owner of Holiday Inn, HI Express, Hotel Indigo, Crowne Plaza etc, published its 2018 results on Tuesday.

The summary is here, but I have summarised the summary into news I think is relevant:

A new brand, not named so far, will launch in 2019.  It will be an ‘upper midscale all-suites’ brand.  How this differentiates from Staybridge, which is already ‘upper midscale’ in the UK to my mind, and Candlewood remains to be seen.

The company now has 837,000 rooms globally

The number of UK rooms grew 8% in 2018, helped by the Principal Hotels acquisition 

InterContinental Times Square

Room rates are falling in the Middle East (REVPAR down 6% in 2018) due to oversupply

The avid brand has now signed over 170 contracts although only one hotel – in Oklahoma – is actually open.  These will be new build ‘cheap and cheerful’ hotels which will charge noticeably less than an equivalent Holiday Inn Express.

voco, the new conversion brand, has three hotels open with 13 signed.  We are reviewing the Cardiff hotel over the weekend.

Bookings by IHG Rewards Club members rose from 39% to 43% (over 50% in the Americas)

IHG Rewards Club members are 7x more likely to book direct than non-members

Importantly for hotels, revenue from IHG Rewards Club members is 25% higher than from non-members (this is, I imagine, due to the 20%+ commission charged by Expedia, booking.com etc and the propensity for loyal guests to book superior room categories)

Here is the key thing that caught my eye:

IHG Rewards Club is “testing new features for 2019 roll-out, designed to increase member engagement with variable point pricing” 

It is not clear what this means.  If we’re lucky, it MAY be a move to a Hilton model whereby redemption rates fall on dates where cash costs are low.  It may also be linked to the current New York promotion whereby certain hotels are currently on special offer for points until 30th April.

Of course, there is also a massive downside scenario whereby IHG Rewards Club moves to 100% variable pricing.  Points prices become uncapped and you get a fixed amount, say 0.5c, per point.  If the InterContinental Times Square pictured below is selling for $600, you would need 120,000 points.

I doubt IHG would do this – it is hardly likely to “increase member engagement” – but we need to keep an eye on it.  The Hilton Honors model has, I think, worked well with hotels having a points cap but members still able to get redemption value on nights where cash rates are low.

(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. Morrisons was fine with similar Amex offer, can’t imagine there’d be any issue.

  2. Froggitt says:

    Staybridge in the USA certainly is not ‘upper midscale’. Loads of headroom there for a decent long stay brand.

  3. O/T: Natwest rewards are offering Avios transfers again. By my calculations it’s 0.85p per avios, which I’m happy at.

  4. Chelseafi says:

    O/t wanted to book 1 night stay in May in Hilton Doubletree 32k points, coincidentally just had enough points between our 2 accounts so needed to xfer points from oh account to give my account the 32k, received points within 24 hours, went to book and it’s now showing 33k, really annoying is this usual? I’m now waiting for points from MR to transfer only need 90 points,

    • Sounds like it’s on dynamic pricing based on cash price – why not just do a partial redemption using the points you have?

      • I’ve found Hilton customer service to be really helpful in these circumstances. Try Twitter, explain what happened, they may credit you the difference?

      • That will be based on BFR though, might be cheaper to just buy 1000 points depending on rate.

    • Pay points and cash.

  5. BITS OT
    I’m having trouble adding a new Amex card to my online account, is there a trick to getting it to add.
    I’d rather not have to set up a new account to view it.
    Thanks

    • If it is a card you’ve had before, you need to remove the old dormant card (there is a function to do this on the site) at which point you’ll have no trouble adding a new one.

      • I’ve got lots of closed cards on my account of various types – never had any problems adding a new one?

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