This article is our attempt to decide what IHG One Rewards points are worth. How should you value them?
Valuing miles and points is a thankless job. We have always published articles on what Avios points are worth, but that Avios article is so complex that it simply proves my point.
In the face of constant reader requests, however, I wrote this series of articles on how we value each of the major hotel points currencies. I am updating the series this month.
Here are links to the full series:
- What are Accor Live Limitless points worth?
- What are Hilton Honors points worth?
- What are Marriott Bonvoy points worth?
- What are Radisson Rewards points worth?
- What are World of Hyatt points worth?
The reason I have changed my mind after all these years is that I have found a methodology that works for me. It takes a subjective valuation and then explains the boundaries around it. Or, in plain English:
- I will tell you (without justifying it) what I think an IHG One Rewards point is worth
- I will tell you, on the upside, how far wrong I can be (which is good news)
- I will tell you, on the downside, how far wrong I can be (which is bad news)
- I will tell you what IHG One Rewards points are worth if you turn them into something else – usually airline miles – which effectively locks in a floor value
Why I think ‘range’ is important when valuing hotel points
When we look at using Avios for business or First Class flights, the ‘cash alternative’ is often a poor comparison. Most HfP readers don’t want to, or simply can’t afford to, pay cash for business or First Class flights. Their choice is Avios or nothing. Even if you can afford to pay, what are you comparing with? A cheap non-refundable sale flight? A pricier flexible ticket? The cost of an indirect flight, not on BA?
Hotels redemptions are different:
- you stay in far more hotels each year compared to the number of premium cabin flights you take, so you can be selective about when you use points
- you can usually afford to pay for a hotel if you choose not to use points
- there are far more options in the hotel market than in the flight market – most people only have a lot of miles in one airline programme, whereas you are likely to hold hotel points in multiple schemes
It is easy to sit on hotel points until you get a good deal
The net result of the three facts above is that it is easy to turn down a hotel redemption when it doesn’t seem like good value. You can pay cash or redeem via another hotel scheme instead.
Here is the crux of what I am trying to say. If you compare two hotel schemes:
- scheme A usually gets you 0.3p per point but if you are lucky you can get 1p
- scheme B usually gets you 0.4p per point but if you are lucky you can get 0.6p
…. scheme A may actually be the best.
Most people who try to ‘value’ hotel points don’t take this into account.
If you redeemed points for every stay you did, regardless of the cash price, scheme B would be the best. No-one does this though. In reality you can pay cash for your stays in scheme A until the day when a bumper redemption arrives and you can get 1p.
Here’s a real example. I value Marriott Bonvoy points at 0.5p as this article explains. If you do 20 Marriott hotel stays and use Bonvoy points for all of them, I think you will average 0.5p, give or take.
However, in December 2020, I redeemed 400,000 points for two villas at The Ritz Carlton Al Wadi Desert in Ras Al-Khaimah. This would have cost £4,800 for cash, which I would have paid if necessary. I got 1.2p per point. It justified all of the Marriott stays where I paid cash rather than redeem for 0.5p per point.
This October, I have three nights at the impressive Al Maha desert resort in Dubai booked. This is getting me 1.5p per Bonvoy point vs my 0.5p valuation.
What are IHG One Rewards points worth?
With our methodology out of the way, let’s take a look at what IHG One Rewards points are worth.
To keep things simple, we do not adjust for the fact that you would earn points back if you paid cash instead. This can have a noticeable impact when generous bonuses are running.
IHG One Rewards has historically run more generous promotions than the other major chains, but this has not been true for the past 18 months.
The HfP average valuation of an IHG One Rewards point:
We are not justifying this valuation, except to say that I have looked at enough IHG One Rewards redemptions over the years to be happy with it.
It is worth noting that – if you redeem for their Mr & Mrs Smith partner hotels – you will get 0.55p to 0.60p per point at the moment, which blows my valuation out of the water. Points rates at these properties are directly linked to cash rates and IHG has recently made the rate more generous. In the linked article above you were only getting 0.45p at best.
That said, I am not tempted to change my 0.4p rate because Mr & Mrs Smith hotels are generally small boutiques outside of big cities and are not typical redemption targets for many people. IHG also appears to be testing the market in terms of the value you get per point. It may be 0.55p to 0.60p today but it could be less tomorrow.
The steep rise in hotel cash rates in Summer 2022 has not impacted our valuation because IHG has now primarily moved to dynamic pricing, where the points cost is linked to price.
How high can value go on the upside?
Not very high, which is not good.
If you can get 0.6p per point then take it.
Over the last year, IHG One Rewards has been bringing in ‘revenue based redemptions’. In plain English, this means that the points required are linked to the cash price.
Hilton has a similar system, but Hilton was smarter. Hilton still has a ‘points price cap’ for each hotel, so you know that you will rarely pay more than 95,000 points per night at its top hotels, and proportionately less at mid-market ones.
IHG One Rewards has no cap. This means that you are now seeing some stupid redemption rates, eg 120,000 points for a Holiday Inn Express in London:
When I started collecting IHG points, you could book ANY InterContinental hotel globally for a fixed 30,000 points per night. Other brands cost even less. Things have changed ….
You need to be clear that this is not premium ‘last room availability’ pricing. Hotels are still only obliged to make 5% of their rooms available for redemption. IHG is also still only paying hotels the usual peanuts figure for redemptions. On a stay at the Hotel Indigo Bath (reviewed here) I was given IHG’s receipt by mistake which showed they paid £32 for my room.
In August we saw some strange – in a good way – redemption pricing. IHG has not announced anything so it isn’t clear what is going on. Some hotels were offering redemptions at exceptionally low prices, such as 45,000 points for top InterContinental and Kimpton properties.
The deals were not available at every hotel on every night. Was IHG running a test where some reward nights are offered at a low fixed price and then future bookings are based on the cash rate?
What we do know is that IHG is putting a lot of money behind the launch of IHG One Rewards, but a lot of it will be wasted if people believe that even an average Holiday Inn Express in London can be 120,000 points.
Until we know what is happening with these price tests, I will repeat my advice from last year. Realistically, the best value you can expect from IHG One Rewards is 0.6p per point. If you are booking a hotel where your points are worth 0.6p, take it and pocket the cash saving.
How low can value go on the downside?
Low, but not disastrously so.
One upside of the move to revenue-based redemption pricing is that you will rarely get a truly terrible deal.
My London analysis last year showed that 0.25p per IHG One Rewards point is about as bad as it gets.
That said, 0.25p is still 35% worse than our benchmark of 0.4p per point, so you should absolutely avoid redeeming at this level if at all possible.
If IHG One Rewards devalues hugely tomorrow, what is my escape route?
This is our floor price. What can you do with your points if IHG One Rewards devalues massively overnight?
With IHG One Rewards, the best value is to convert your points to airline miles or to gift cards. It doesn’t end well either way.
The conversion rate to Avios and other major airline currencies is 5:1.
If we assume an airline mile is worth 1p, then you are getting 0.2p per IHG One Rewards point in the worse case scenario.
If you redeem IHG One Rewards points for a UK High Street gift card it is even worse. The catalogue is here.
At the top end – it is worse for smaller balances – 49,500 points gets you a £100 voucher for a UK High Street store or restaurant chain. This is a 0.2p per IHG One Rewards point, in line with what you get with a conversion to airline miles.
By redeeming for gift cards, you are losing 50% of the value compared to an average hotel redemption, and 66% of the value compared to a ‘good’ hotel redemption.
In summary …. what do we think IHG One Rewards points are worth?
- on average: 0.4p per point
- on a very good day: 0.6p per point – usually there is little ability to go beyond this, but recent tests of lower reward pricing give hope that the upside may be better going forward
- on a bad day: 0.25p per point
- if you transfer out in a worse case scenario: 0.2p per point for airline miles or UK retailer gift cards
The lack of an upper pricing cap makes IHG One Rewards less attractive than Hilton Honors, World of Hyatt or Radisson Rewards. This is because it sharply reduces your ability to get outsize value. It is also hugely impacts your ability to redeem at uber-premium properties. Marriott Bonvoy retains an upper pricing cap at the moment but this is due to go in the next few weeks.
The bottom line is that – unless IHG makes some of these discounted redemption tests permanent – there is no point saving up for a bumper redemption at a luxury resort. Revenue-based pricing makes those rewards no better value than your local Holiday Inn Express.
If you find that a certain hotel can get you 0.6p per point then you should pull the trigger, because you will struggle to do better. Any redemptions which gets you 0.4p to 0.5p should be seen as acceptable.
IHG One Rewards update – October 2022:
Get bonus points: You will earn bonus IHG One Rewards points on stays between 13th October 2022 and 31st December 2022. You can choose between 2,000 points for every two nights or 10,000 points for every four nights (not cumulative). Read this article for full details. You can register here.
New to IHG One Rewards? Read our overview of IHG One Rewards here and our article on points expiry rules here. Our article on ‘What are IHG One Rewards points worth?’ is here.
Buy points: If you need additional IHG One Rewards points, you can buy them here.
Want to earn more hotel points? Click here to see our complete list of promotions from IHG and the other major hotel chains or use the ‘Hotel Offers’ link in the menu bar at the top of the page.