IHG Rewards Club 2016 Award Night Changes

Most major hotel chains make award category adjustments each year. Typically when these changes are made, they’re not changing the number of points required for a stay in a particular category of hotel (for example, a Category 6 hotel will still cost 25,000 points per night), but rather are changing which hotels are in which categories (a Category 6 hotel may transition to Category 7, which requires 30,000 points per night).

The past few years the hotel industry has been doing extremely well, with room rates and occupancy up. The award category in which a hotel belongs typically reflects the average daily rate and occupancy of the hotel. As a result, we’ve seen more hotels go up in category than down in category the past few years.

To give an example of the changes we saw in 2015 across different loyalty programs:

The hotel industry isn’t doing quite as well this year, and we’ll actually see paid rates decrease, on average. So in theory you’d think hotel categories would decrease accordingly, especially in regions which are struggling (Brazil, China, etc.).

IHG Rewards Club has just announced 2016 award night cost changes, making them the first program of the year to do so. These changes kick in for bookings made as of February 17, 2016 (it’s fine if the stay is on a subsequent date).

Here’s the full list of hotels changing categories.

IHG-Reward-Changes

With these changes, the cost of free night redemptions at ~400 of IHG’s 5,000+ properties will be changing by 5,000-10,000 points. Some properties are going down in price, though most are going up.

While IHG doesn’t have a “traditional” free night chart with categories, currently the most expensive free night redemption is 50,000 points per night. Under the new system, select hotels will cost 55,000-60,000 points per night, which means IHG is raising the cost of stays at top properties by up to 20%.

For example, the following five hotels will cost 55,000 points per night:

  • InterContinental Boston
  • InterContinental Melbourne
  • InterContinental Rome
  • InterContinental Sydney
  • InterContinental Washington DC

InterContinental-DC
InterContinental Willard Washington DC

Meanwhile the following 13 hotels will cost 60,000 points per night:

  • InterContinental Bora Bora (both properties)
  • InterContinental Cannes
  • InterContinental Hong Kong
  • InterContinental London Park Lane
  • InterContinental Monterey
  • InterContinental New York Times Square
  • InterContinental Paris (both properties)
  • InterContinental San Francisco (both properties)
  • The Venetian & The Palazzo Las Vegas

intercontinental-bora-bora-4009878877-4x3
InterContinental Bora Bora

This certainly does impact my valuation of IHG Rewards Club points. At the moment IHG points can be indirectly purchased for 0.6 cents each, which is roughly what I value them at. That valuation is partly based on being able to redeem for stays at their top properties for 50,000 points per night. It’s the equivalent of paying $300 per night for a stay there.

With these changes, many of these properties cost 60,000 points per night. On top of that, keep in mind that IHG Rewards Club has capacity controls on free night redemptions, unlike several of the other major hotel chains.

With these changes, I’d say I value IHG Rewards Club points closer to ~0.5 cents each.

Bottom line

We’re seeing the cost of many of IHG’s best properties go up in price by 20%, which is very bad news. While IHG doesn’t have “traditional” rewards categories, we’re seeing them add new redemption costs here, and not just adjust how many points are required within the existing structure.

PointBreaks continues to be a great use of IHG Rewards Club points, where select hotels are just 5,000 points per night. Unfortunately the list of qualifying hotels seems to get worse with every promotion, so that’s not quite as valuable as it once was either.

The full impact of these changes will depend on your redemption patterns, so be sure to check the changes by hotel to see how you’ll be impacted.

How do these IHG Rewards Club redemption rate changes impact your valuation of their points?

Comments

  1. Makes me wonder if this is a direct result of their priceless surprise promotion and all the new IHG members with around 50k points.

  2. I guess they had to make up for the millions of points given out to the all of us who sent in 94 entries each to the Priceless Surprises promo! 🙂

  3. Thanks for the info. The Venetian and Palazzo increases are shocking to me. These are properties that you can routinely get for $150 (midweek) and even cheaper on Priceline. Not that 60K points or even 50K points is a good redemption, but they often have a 50% off points sale for these properties which is great.

    Can you tell me if you pay the resort fees for Venetian/Palazzo for points stays and/or the IHG Chade annual free night award?

  4. The Intercontinental (not the Mark whatever Intercontinental) in San Francisco is my preferred hotel in the city, which sucks because it’s one of the few places where I actually prefer an IHG hotel (forces me to spread my loyalty thin). While the price of hotels in San Francisco has supposedly gone up, I feel like the cost of the rooms at the Intercon have come down a bit. I’m there at least once a month and I feel like we regularly pay $180-ish. Any more than that and I would get funny looks from the office. I also really like the Four Seasons because it’s old school FS, but it’s only once in a while that they have a rate I can justify (and you feel super sneaky and important when your car pulls into the back entrance).

  5. With all these points increases happening (airlines and hotels) it’s time to give fixed “miles” credit cards a serious look. Some of these hotels can be booked for super cheap (not 60k points worth, imo). It’s getting to the point that the miles/points game is going to be even with cash back “points”

  6. Bummer, although my strategy with IHG is usually to find good rates on Intercontinentals and pay for the stays there, using the points that result to book award stays at ticky-tack airport hotels that I never really wanted to stay at in the first place. I see the program more as a periodic way to save a few bucks on trips that involve 1-night stays at Holiday Inns or Crowne Plazas more than anything else, and the fact that top-tier hotels keep going up in price only reinforces that. The only aspirational redemption I got out of it was when I booked a 3-night stay at the IC Amstel buying points during their winter promotion, and even then, I saved around 60% off the nightly rate, so it wasn’t even close to “traveling for free.”

  7. This is a huge devaluation. At least with HHonors, elites get the fifth night free on awards redemptions, IHG gives you nothing. There was talk of new Spire benefits for 2016 but absolutely nothing has come of it. IHG is racing to the bottom to become the least compelling hotel rewards program out there.

  8. I think you people are being far, far too dire.

    IHG hands out points *hand over fist.* Writing index cards and sticking them in envelopes is going to get me 50,000. Staying at two Holiday Inns in the next three months on a weekend would get me another 40,000 through Accelerate.

    Compare them to SPG, which everyone adores. If I want to get 20,000 SPG points, how exactly do I do that? 20,000 dollars of spend on a credit card? An absurd amount of money spent on their hotels? It would be hard for me to do. Raising 60,000 IHG is much, much easier.

    So chill out, people. These hotels aren’t pricing themselves out of reach

  9. I agree, the sky isn’t falling. But, these periodic devaluations (airlines or hotels) are always a bit of bad news in the course of an otherwise pleasant day. Part of me is always looking for the 50k point credit card, the great points deal, thinking I’ll jet over to that Bora Bora room pictured above and stay for “free!” But then *boom* it’s gotten a little harder and that’s depressing news. The other part of me says “Dude. Get a life. Get a 2% cash back Fidelity card and do more charity work”.

  10. Okies, it used to be the only reason why I have a stash of IHG points. The cap of 50k.

    Now, I will use them as fast as possible, and farewell IHG.

    It wasn’t very good in the first place, and it certainly didn’t last.

  11. Huge devaluation? LOL. I couldn’t think of a milder way to make inflationary adjustments to this program.

    I’ll be laughing all the way to Bora Bora even after its 20% increase.

  12. Is IHG f’in crazy? Most of their hotel rates are less than using points. Not really sure what the benefits are. The use of points are for standard rooms and no upgrades or other elite benefits. Absolutely insane.

    Time to go back to The Maldives. Enjoyed that resort immensely. The service was way better than Conrad.

  13. These kinds of ‘enhancements’ are happening everywhere – in both the hotel and airline industry. As the internet makes it easier to game the systems I have no problem with corporations making adjustments to counter this. I even applaud IHG for making the announcement ahead of the change unlike some of my loyalty programmes who simply drop you an email one morning that reads something like ‘effectively immediately’.

    Now where should I book before Feb 17???

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