You can now redeem IHG points at Iberostar all-inclusive resorts – but the value isn’t great

Last Autumn, thanks to a new long-term agreement with Iberostar, IHG added 70 beach resorts to its roster.

Iberostar is a Spanish family-run chain of hotels that runs four and five star leisure properties, mainly ‘all inclusive’.  The group owns hotels in Mallorca, Tenerife, Mexico and the Dominican Republic amongst other places.

You can check out the portfolio on their website here.

The agreement covers all of Iberostar’s beach resorts outside of Cuba but does not include the city centre hotels.

Iberostar Beachfront Resorts became the 18th brand in IHG’s stable. It sits within IHG’s ‘Exclusive Partners’ portfolio.

IHG has agreed an initial 30-year licence to the ‘Iberostar Beachfront Resorts’ brand, so this is a long-term partnership. Under the agreement, Iberostar retains ownership of the hotels whilst benefitting from access to IHG’s customer base.

Where are Iberostar beach hotels located?

In Europe, the vast majority of Iberostar properties are in Spain. There are a couple in Greece, Montenegro and Portugal.

The company also owns a number of hotels in the Americas and a handful in Africa. Its second largest destination is Cuba, although these properties are excluded from the deal presumably due to complications under the USA – Cuba embargo.

The 70 properties tally up to 24,300 rooms, which grew IHG’s portfolio by around 3%. According to the press release:

“IHG has fewer than 20 resort properties in the countries where the Iberostar Beachfront Resorts properties are located. The agreement therefore significantly increases and broadens IHG’s resort footprint.”

You can now redeem IHG points at Iberostar

It has taken a year for the integration work to be done, but you can now redeem IHG One Rewards points at 40 Iberostar resorts, including many ‘all inclusive’ ones. Some will take longer to join, if they ever do, because the deal requires the approval of the underlying owner of each property which is not always Iberostar itself.

That’s the good news. The bad news is that the value is poor.

This shouldn’t surprise you.

Regular IHG hotels are paid a relative pittance when you stay on a reward night. Under the terms of their franchise or management agreement, around 5% of rooms must be made available for redemption each night. Unless the hotel is almost full, it only receives a nominal sum to cover cleaning and room amenities.

When I was at the Hotel Indigo in Bath two years ago (review here), I was given IHG’s bill by mistake. The hotel was getting £32 from IHG, a quarter of the going rate.

This may sound unfair, but it’s not. If the hotel was 95%+ full, it gets full reimbursement from IHG. If it’s not 95% full, the redemption is not displacing a paying guest by definition. Cleaning costs are covered by IHG’s token payment and whatever you spend in the restaurant etc is a bonus.

This logic doesn’t work for all inclusives

Unfortunately, this logic doesn’t work at an all inclusive resort.

The hotel isn’t just paying to launder your sheets. You are also eating and drinking for free for the entire time you are there, occasionally including the minibar and room service. Not only are you costing the resort real money, but you won’t be spending much on top.

It makes sense that Iberostar would demand a higher payment from IHG, as a percentage of the cash rate, than a regular hotel.

Let’s look at some numbers.

We always say that an IHG One Rewards point is worth 0.4p.

In contrast, here are redemptions at the all inclusive Iberostar resorts in the Dominican Republic for the same night next June (price is per night for 1 adult):

• Iberostar Hacienda Dominicus: 94,000 points or £212 (0.23p per point)

• Iberostar Costa Dorada: 53,000 points or £107 (0.20p per point)

• Iberostar Grand Bavaro: 109,000 points or £344 (0.31p per point)

• Iberostar Dominicana: 59,000 points or £120 (0.20p per point)

• Iberostar Punta Cana: 59,000 points or £120 (0.20p per point)

• Iberostar Coral Level Bavaro: 105,000 points or £190 (0.18p per point)

• Iberostar Selection Bavaro: 75,000 points or £145 (0.19p per point)

You are getting, with one exception, around 0.20p per IHG One Rewards point.

This is exactly half the value that you would expect to get from an IHG redemption.

NOTE: Some Iberostar resorts offer B&B, half board and all inclusive. Redemptions appear to book into B&B in these cases. All of the Dominican Republic resorts above only offer all inclusive.

In some places you can make a direct comparison. Take Mallorca from 3rd to 6th June. The Kimpton Aysla Mallorca reviewed here is 77,000 points per night vs a cash rate of £335, so 0.44p per point. Iberostar Selection Albufera Playa, an all-inclusive, is a similar 74,000 points per night but the cash rate is £265 (a better-than-expected 0.35p). Iberostar Alcudia Park is 72,000 points or £188 B&B (0.26p).

Is this a bad deal?

If you want a totally free holiday, with no food and drink bills, and you have a stack of IHG One Rewards points, you’ll be happy.

Yes, of course you’d get a better result on paper by paying cash for your Iberostar room and using your points elsewhere later. If you have 100,000 IHG points, you can get roughly £200 of Iberostar rooms or £400 of Holiday Inn, Hotel Indigo, InterContinental etc rooms.

Most people would see the latter as a better deal, but some will not. After all, if you got the points for ‘free’ via work stays (not credit card spend etc) then you will be less concerned about the value you get. If this new deal means that you can take your family on a ‘totally free’ holiday at a beach resort, then it’s a good deal for you.

I suspect that, for most HfP readers, Iberostar isn’t going to be something to focus on. IHG doesn’t really care – it has plenty of other brands that you will like. This deal opens up a new base of potential customers including many who may not have used all inclusive resorts in the past.

You can learn more about Iberostar on its website here. Reward bookings must be made over at ihg.com.

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IHG One Rewards update – September 2024:

Get bonus points:

You will earn 3,000 bonus points for every two cash nights you stay between 19th September and 31st December 2024.

Nights to do not need to be consecutive. Read more in our article here and click here to register.

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.