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Forums Hotel loyalty schemes IHG One Rewards IHG “dynamic” award pricing – what is going on?!

  • NorthernLass 7,544 posts

    Is IHG trying to destroy its own loyalty program? Some hotels are now at 120k points per night with many others not far behind. How do they think this is going to encourage customer loyalty when they don’t even offer 5 for 4 and/or free breakfast like other programs?

    Looking at a 2 centre stay in Chicago and Miami next winter (and Xmas prices aren’t even released yet), most Kimptons are over 70k pn and ICs even higher. Even some HIs are coming in at 60k.

    NorthernLass 7,544 posts

    And it’s not just a US thing – on several random dates next November the HIE Vauxhall Nine Elms is 120k!

    EDB99 32 posts

    I just booked a German Crowne Plaza over New Year’s Eve for 10k points a night.

    It’s a classic case of “your mileage may vary.” The more flexible you are date-wise and the more willing you are to stay at non-aspirational properties, the better the deals that are to be had.

    Lady London 2,040 posts

    Yes. Like any frequent flier plan or other hotel plan that doesn’t publish a “points price listing” that is valid for a decent period. This destroys loyalty as there is no promise what you’re booking to earn points for, won’t change.

    The gamer who’s found a way to accrue points quickly won’t be put off, as they will have the points ready immediately to snap up any bargains. But that’s not the kind of member hotels and airlines really want. The approach of asking people to give you their money so they will earn points to buy things at prices which can rise ridiculously in the future is a bit like asking people to invest in a currency which may devalue and/or have massive inflation. Now where have I seen that before?

    EDB99 32 posts

    I can’t say I fully agree with your assessment, Lady London.

    What you say more or less applies to airlines. But I think for hotel programs, the logic is a bit different. For them, one of the if not the most important thing is you book direct. OTA’s that bring customers in charge extremely high commissions. Think like 15% of the room rate. However, if a customer books direct, the costs are just 2-3%.

    Also, the hotel wants people to book direct to gather more data about the guest and his/her preferences. That data collection is more limited if people use non-direct channels.

    Overall, hotels do not mind as much as airlines if customers split their business between chains. Not saying customer retention and increasing customer spend through the loyalty program don’t matter. Instead, my claim is they carry less weight for hotel chains than for airlines.

    Even if you can’t get a hotel customer to become super-loyal, your program can still be reasonably successful if it engineers that “channel shift” I was talking about above.

    So what is ultimatly my point in relation to “dynamic” award pricing? I think hotels do not need to provide the same kind of value proposition as airlines. Just look at Marriott. They still feature static award pricing (I know it’s about to be abolished). But the value proposition can be pretty terrible unless for certain niches (i.e., longer stays at high-category properties). Apparently, the value proposition is good enough, though.

    I split my hotel business between chains. And I know many people do as well. It is much more common to do so than with airlines. That gives me more options towards good-value redemptions. The hotel chains are probably still reasonably happy with me as I book almost 100% direct.

    meta 1,435 posts

    On your last point. People should split loyalty between airlines though. Between my partner and me, we have enough miles in 8 different airline programmes. The approach has served us well over the years.

    Supergers49 225 posts

    You need to keep an eye on the reservations. My wife and I are hoping to spend two weeks in the Singapore IC and Regent in May. When we originally booked the rooms on points, they were about 55k-60k per night. Each week I log-in, check each night and I’ve whittled that down to 35k-40k per night. They’ve now returned to a 50k-55k per night range. What has surprised me throughout is that the cash prices have been far more consistent than the redemption pricing.

    Most importantly, I believe that the 55k-60k per night was greater than the redemption price before dynamic pricing and the 35k-40k is probably less. So it will definitely create winners and losers but attentiveness can increase your chances of being one of the winners.

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