On Wednesday we ran a detailed analysis of the new IHG Rewards hotel redemption pricing.
My conclusion is that there has not been a wholesale devaluation, and there has not been a move to revenue-based redemptions. The link between room rate and points price is weak. This applies irrespective of the market position of the hotel.
You can read more about this if you click here.
Today I want to look at something different. Instead of looking at 38 London hotels on the same day – as I did on Wednesday – I want to look at the same London hotel across 31 days.
I picked Holiday Inn Camden Lock, host of two previous Head for Points reader parties. I like this hotel, partly because many rooms overlook the canal and partly because you can be in Camden Market within 60 seconds.
Here is how the pricing works for July 2021. The cash price is the IHG ‘member rate’ for that day.
The numbers below are points for a standard room, the ‘member rate’ cash price for a standard room and the ‘pence per point’ calculation.
- Thursday 1st – 67,000 / £159 / 0.24p
- Friday 2nd – 62,000 / £147 / 0.24p
- Saturday 3rd – 67,000 / £159 / 0.24p
- Sunday 4th – 54,000 / £142 / 0.26p
- Monday 5th – 65,000 / £182 / 0.28p
- Tuesday 6th – 38,000 / £218 / 0.57p
- Wednesday 7th – 38,000 / £203 / 0.53p
- Thursday 8th – 53,000 / £167 / 0.32p
- Friday 9th – sold out / £137 / na
- Saturday 10th – 64,000 / £190 / 0.30p
- Sunday 11th – 34,000 / £179 / 0.53p
- Monday 12th – 25,000 / £142 / 0.57p
- Tuesday 13th – 27,000 / £157 / 0.58p
- Wednesday 14th – 28,000 / £159 / 0.57p
- Thursday 15th – 48,000 / £139 / 0.29p
- Friday 16th – 57,000 / £134 / 0.24p
- Saturday 17th – 64,000 / £151 / 0.24p
- Sunday 18th – 49,000 / £116 / 0.24p
- Monday 19th – 50,000 / £123 / 0.25p
- Tuesday 20th – 25,000 / £135 / 0.54p
- Wednesday 21st – 45,000 / £135 / 0.30p
- Thursday 22nd – 44,000 / £117 / 0.27p
- Friday 23rd – 50,000 / £139 / 0.28p
- Saturday 24th – 54,000 / £155 / 0.29p
- Sunday 25th – 42,000 / £106 / 0.25p
- Monday 26th – 43,000 / £119 / 0.28p
- Tuesday 27th – 25,000 / £134 / 0.53p
- Wednesday 28th – 42,000 / £134 / 0.32p
- Thursday 29th – 40,000 / £114 / 0.29p
- Friday 30th – 47,000 / £123 / 0.26p
- Saturday 31st – 61,000 / £147 / 0.24p
When you look at a list like this – for the same hotel – you see how crazy the new system is.
- the points range runs from 25,000 points to 67,000 points
- the cash range runs from £106 to £218
However, the cash price has very little relation to the points price.
The most expensive date – £218 – is one of the cheapest for points, needing just 38,000.
On another date, we have a room going for 61,000 points which is only £147 cash.
The ‘pence per point’ range runs from 0.24p to 0.58p.
Points pricing doesn’t seem to be totally random but it is not closely correlated to cash either. There appear to be clusters, where you get a run of 4-5 days of similar points pricing.
Between 12th – 15th July, for instance, the points cost is very low at 25k / 27k / 28k. However, the average cash price for those three days – around £150 – is higher than virtually every night in the 2nd half of the month.
What does this mean for you?
If you want to fully maximise the value of your IHG Rewards points, you may need to switch hotels each night. This is clear from the data above.
Unfortunately, IHG does not have a calendar on its website which shows you the cash and points price in the same format as I do above. This means that you would need to do lots of individual searches to see where the best value was.
For example, if you searched from 19th-21st July, the IHG website will show you a points price of 37,500 per night. What you can’t see easily is that one night is 25,000 points and the other is 50,000 points, which may impact your decision.
If IHG had decided to ‘do an Accor’ and annouce that 1 point was worth exactly 0.4p, members would at least know where they stood. It would have destroyed the value in the programme (Accor Live Limitless does not exactly excite its members as there are no opportunities for outsize value) but at least you would have known where you were.
You are now in an even worse position, because you have no idea what your stay will cost. Fancy earning some points during May for a 5-star hotel in Boston in July? Good luck getting a firm idea of how many points you will need.
Imagine if Caffe Nero gave you one stamp per coffee you bought, but didn’t tell you how many you needed for a free coffee. You fill up a card with 15 stamps. Each day you need to walk into the shop and ask how many stamps are needed for a free coffee that day. The answer could be between 10 and 30 (roughly the range IHG is using) and bears no relation to the cost of a coffee. Would you put up with that? Would you even bother collecting the stamps on that basis?
Hilton got it right, IHG got it wrong
Hilton moved to a similar system a couple of years ago, but with a key difference.
Hilton has retained caps. They are not published, but regular users know that you will never pay more than a certain amount for a certain hotel. This has two advantages:
- you know, in the worse case scenario, how many points you will need
- you can get outsize value at peak times
The idea of linking points to cash rates is not totally stupid. When you put hotels in fixed price categories, there are some properties which never get any redemption business because they are so cheap for cash.
Under a flexible system, like the Hilton one, hotels which are cheap for cash are cheap for points. This helps spread out redemptions across a broader number of hotels.
IHG has done neither of these things:
- there is no link between cash price and points price, so it won’t do anything to fill hotels with points guests at cheap periods
- there is no cap on redemption pricing, so members have literally no idea how many points they will need
What makes even less sense, as I explained yesterday, is that the amount that IHG pays the hotel is fixed unless the hotel is full. This means that the dispersion in points pricing we see above has no logic to it.