Reply To: Calculating value – IHG points redemptions

[John]

OK there are two things here.

Firstly, I’m going to sound like a bore but just because the hotel wants £240 for the room does not make the room worth £240.

If points were not available what would you book instead? If you would not choose the IHG hotel but another one which is just as good for £200 then your points are worth £200. But if you would still genuinely pay £300 for the IHG hotel, then your points are arguably worth £300, or you are getting to pay £240 for something worth £300 to you.

So if the cash rate is generally acceptable to me I would tend to see 0.4p to 0.5p per point as the break even. If the cash rate is unacceptable but the points price is acceptable, then I just ignore the cash rate.

Secondly, IHG points & cash is actually just an indirect method of buying points.

Generally IHG redemptions are fully refundable up to the day before (but always check carefully when booking as, especially at times of high demand, they can be non-refundable), however with points&cash you do not get the money back under any circumstances.

What you are actually doing is buying 5000 points for £27, or buying 25000 points for £134, then immediately redeeming them.

Furthermore, for some reason the points&cash rates are different at different hotels. It never goes below USD 30 for 5000 points (about £25, or 0.5p per point) so there is actually no need to pay £27 (which would be charged in USD anyway). Find a hotel where it’s USD 30, buy the points you need (make sure redemptions are refundable first!), then cancel and book the hotel you want.

Obviously, don’t do this too often or IHG might get upset – I only do it once or twice a year if I am short of points. This should also be employed with managing your points totals, because every so often you get the opportunity to buy points directly at around 0.45p to 0.5p anyway.

To conclude. If the hotel is really worth £240 to you, then it absolutely makes sense to buy points at 0.5p and immediately redeem them at 0.7p – but you must remember that is what you are doing.