Posted by Ric Garrido

Two weeks ago in Las Vegas I interviewed Don Berg, Vice President InterContinental Hotels Group Loyalty Programs at the 2013 IHG Americas Investors & Leadership Conference. Generally I do not like interviews with senior executives of hotel companies since I generally leave the interview with no more information than I could have found in a press release.

Don Berg was surprisingly candid about IHG Rewards Club.

I’ll summarize the main points for IHG points fans.

  • IHG will offer free internet in 2014 to all IHG Rewards members worldwide, even if not a hotel guest. This benefit is already available to IHG Rewards Club Gold and Platinum members. Rather than popping into McDonald’s or Starbucks, you can sit down in a Holiday Inn Express or InterContinental and log onto free wireless internet. IHG will soon be a hotel chain with 5,000 hotels and none of the other major hotel chains offer this benefit.
  • No plans to drop PointBreaks award nights at 5,000 points per night. I booked four of those PointBreaks nights last week for my family at the Crowne Plaza Executive Park, Charlotte, North Carolina.
  • Plan is to increase IHG Rewards Club Flash Sales. There has been a one-day flash sale in September and October offering up to 75% off reward nights for stays the following month. My parents landed a Flash Sale deal in October for their vacation stay last week at Crowne Plaza Asheville, North Carolina at 75% off, reducing the 30,000 points rate to 7,500 points per night. They said the hotel was quite busy during their stay, but the receptionist had not known anyone else to come on that discount reward rate. Other guests should have been reading Loyalty Traveler to land that one day flash sale rate.
  • No plan to expand Last Minute Reward Nights beyond the first weekend of the month. Creating one list monthly is a time resource issue and not likely to expand anytime soon.
  • Stackable Promotion Codes for IHG bonus points is a technology limitation. Creating a software fix for members registering different promotion codes to earn bonus points from multiple promotions is a technology issue that is not a priority for IHG at this time. The loyalty points gamers are not that big a population. Eventually the technology will be in place, but for now smart IHG Rewards Club members can game the system for extra points on hotel stays.
  • Beginning January 2014, IHG Rewards Club elite members will receive a welcome amenity bag at check in. This may simply be water and chips or maybe more.
  • Reward stays count for elite status qualification and rollover nights are two ways to incentivize guests to try other hotel brands.
  • Go to Home Depot with guilt-free currency to spend. This is what Don Berg would do with 250,000 IHG Rewards Club points. Another IHG corporate executive told me she purchased her washer and dryer using IHG points. I’ll continue to spend my points with IHG hotels for room nights.

One of the takeaways I had from my conversation with Don Berg is credit card points are not accelerating hotel award devaluation with IHG Rewards Club.  He says that is such a small proportion of the total points in the system.

My thoughts are this is probably more accurate with IHG Rewards Club specifically, where credit card points are not as large a share of total points from hotel stays as they might be with SPG and Hyatt.

Don Berg says the gamers of loyalty programs are a small faction of the membership and this is the best time for points savvy consumers to be IHG Rewards members since smart travelers are what the brand is looking for as their target guest.

Eventually improved software technology and more restrictions will end up reducing this gaming of the program. For now, that is not a company priority.

One of those more restrictive changes was making promotion bonus points ineligible for elite status qualification. In 2012 it was possible to earn 60,000 elite points and qualify for Platinum elite on four or five well-timed IHG brand hotel stays earning stackable bonus points from promotions. Now the route to quick Platinum is an IHG credit card for instant elite and points that count for elite status. Quick elite by credit card in the USA and UK may not be fair, but it is there.

IHG Rewards Club 2013 Changes

Richard Solomons, CEO of IHG headquartered in Denham, England took over July 2011. He has been with IHG 25 years. In mid-2012 it was decided to redesign Priority Club into 2013’s IHG Rewards Club during the 10th year of InterContinental Hotels Group as a standalone company.

IHG Rewards Club nights on points were reorganized into category levels rather than by hotel brand.

The overall observation I made at the IHG conference sessions is a coordinated plan to transform IHG as a hotel chain desirable to a younger and new generation. The target guest is now a millennial traveler rather than a baby boomer.

Holiday Inn is the iconic hotel brand. To reach a new generation of guests the Holiday Inn brand has a marketing campaign behind the slogan “Change Your View”.

Holiday Inn shed several hundred hotels since 2009 to improve the overall brand quality.

IHG Conference-1

“Know your target better than anyone else”

  • Holiday Inn = Contemporary Traveler
  • Holiday Inn Express = Smart Traveler

One of the challenges mentioned by IHG executives is the new type of hotel traveler.

The journey being less planned is affecting the industry. When a person books the hotel at the spur of the moment, within 30 miles of the hotel, this reflects less planning. Hotels need to be ready for a rush of last minute bookings.

Now the travel style is posting about the hotel and sharing in real time. The guest experience is celebrated in real time. Images of the hotel and room and destination is happening during the hotel stay.

This is a new phenomenon for the hotel industry.

Here is a timeline of some IHG Milestones

1946Pan American Airways launches InterContinental Hotels to bring high-quality hotel accommodations to Pan Am flight routes.

1947 – First InterContinental Hotel opens in Belem, Brazil.

1952 – The first Holiday Inn opened in Memphis in 1952. Kemmons Wilson, a Memphis businessman, came up with the idea for Holiday Inn after a two-week vacation in 1951 with his wife and five children to Washington, D.C. His objective was to provide a clean, comfortable and affordable place for families to stay that did not charge extra for children.

1982 – Holiday Inn Club Vacations is a partnership between IHG and Orange Lake Resorts, another company founded by Kemmons Wilson. The Wilson family continues to own and operate the resorts.

1983 – Crowne Plaza Hotels & Resorts is founded as an upscale urban hotel brand.

1983 – Priority Club Rewards is launched as the first hotel loyalty program.

1991 – Holiday Inn Express brand launched. HI Express is currently one of the world’s fastest growing hotel brands with 2,235 hotels worldwide and 471 hotels in construction.

1997 – Staybridge Suites launched as extended stay apartment style lodging.

2003 – Candlewood Suites launched as second IHG extended stay hotel brand.

2003 – IHG becomes a standalone company from ownership of UK Bass Brewery.

2004 – Hotel Indigo launched as upscale boutique brand of IHG.

2007 Holiday Inn Resort. IHG begins $1 billion hotel brand relaunch.

2012 – HuaLuxe Hotels & Resorts brand launched with focus on Chinese guests.

2012 – EVEN Hotels brand launched with design for hotel guest wellness.

2013 – IHG Rewards Club launched replaces Priority Club Rewards as updated hotel loyalty program for IHG.

 

Disclosure: I attended the 2013 IHG Americas Investors & Leadership Conference in Las Vegas Oct 28-30, 2013 on a media invitation that included conference & events admission at the Sands Convention Center, two complimentary conference hotel nights at The Palazzo Casino Resort, an InterContinental Alliance Resort, and I attended an IHG Media Team hosted dinner at Wolfgang Puck’s Postrio Bar & Grill in the Venetian Grand Canal Shoppes.

Transportation and other expenses self-funded.

21 Responses

  1. Great post Ric, very interesting. You seem to have an exclusive with the news that you don’t need to be a guest to use the internet.

  2. Does that mean I can continue using my dog and cat’s IC BOGOs?

  3. Fascinating peak inside IHG, along with Club Carlson the programs I get the most value of of my stays and awards. That internet for non-guests is a great idea, I can imagine plenty of reluctant hotel managers. I am thinking of many European hotels that offer internet free in the lobby but not rooms so round the clock have people sprawled out in every nook of the lobby. I do think plenty of people using the internet will make a courtesy drink or snack purchase, and it puts their hotels as a stop-in destination for more than just a clean bathroom.

  4. Glad to hear PointBreaks aren’t likely to chance in the near future!

    Comment by mommypoints on November 13th, 2013 at 2:01 pm
  5. Great article Ric. A big thanks. Glad Points Break will still be around.

  6. This is why I LOVE IHG! They’re up-front, fair, and apparently really generous to savvy travellers! Thanks for the article…

  7. With all the devaluations going on this is welcome news from ihg. Glad to see they are not planning on laying off the promotions. I am in the middle of a 7 night stay at intercontinental madrid at only 10000 points a night. Maybe my best use of ihg points yet!

  8. I just wanted to say that your new website design looks fantastic!

  9. Interesting article, thanks Ric. It’d be nice if they’d consider giving faster Internet connection speeds to Gold and Platinum members though – the speed last night at my London HI was appalling!

  10. @Raffles – free internet is a hard sell to hotel owners. IHG wants this to be a revenue neutral benefit. There will likely be some bumps getting access at some properties.

  11. Hi Ric – any discussion about IHG doing more to recognize member status for award stays? Or making transparent the process to achieve Ambassador status?

    Seems like a no-brainer if they want to appeal to a younger, more travel-savvy crowd . . . and these are reasons why I choose SPG and Hyatt EVERY TIME over IHG

  12. @Erik – We did not discuss the Ambassador program.

    As far as upgrades on award stays that is up to the hotel. I actually have pretty good record myself for being upgraded on award stays, although I rarely stay at InterContinental brand hotels.

    That is kind of a hard sell for hotel owners since anyone with an IHG credit card can get top elite. That is not the case for SPG and Hyatt members.

  13. Since the rebranding I’m seeing less upgrades and less recognition of elite status. I hope this trend turns around soon.

  14. Excellent post as always Ric, glad Point Break is going to stay.

  15. Great interview…Very happy to know the PointBreaks program is still going to be around!! Thanks Ric!

  16. Loyalty Lobby reported today that IHG had threatened specific customers that IHG would claw back IHG points credited to the customers if they registered for unauthorized promotions in the future.

    It appears IHG’s priorites have changed.

  17. Did you happen to ask them why on Earth they changed the Priority Club name — which everyone knew — to “IHG Rewards”? I mean, it probably doesn’t matter much, but this has to be the worst corporate loyalty rebranding I’ve ever seen. “IHG” means nothing to 99% of travelers, and isn’t an easy acronym to remember.

  18. @iahphx – I did not ask, but I think you suggested the reason in your comment.

    “IHG means nothing to 99% of travelers.”

    IHG Rewards Club has over 70 million members and is the world’s largest hotel loyalty program.

    I think the objective is to make IHG an acronym familiar around the world.

  19. […] Garrido of Loyalty Traveler recently interviewed Don Berg, who heads up IHG Rewards Club.  The key thing which slipped out during this conversation is […]

  20. > “IHG” means nothing to 99% of travelers

    I find that up to 99% of people staying at IHG hotels aren’t even collecting any points for their stay. I have received benefits for just being a member with no status.

  21. @JKohn – In a recent post I showed data for online hotel bookings revealed 47% of guests booking through hotel brand websites are not hotel loyalty program members and 92% of guests booking through an online travel agency are not hotel loyalty program members.

    This leaves plenty of benefits to pass around to those of us with loyalty membership.

    http://loyaltytraveler.boardingarea.com/2013/11/20/are-gen-y-hotel-guests-missing-the-best-hotel-deals/#sthash.41jXmUia.dpbs

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