InterContinental Hotels Group Priority Club has introduced Cash & Points award night options. This is one of the best overall consumer friendly changes in hotel loyalty programs for 2009. The savvy hotel rate shopper can use Cash & Points award nights to pay a portion of cash to buy points at a discount rate for each award night.
Loyalty Traveler argues the option to purchase discounted Priority Club points for award night redemption along with the option to purchase bonus points at a discount in conjunction with paid stays is a high-value strategy and highly competitive hotel loyalty program offer.
IHG Cash & Points Post Objectives:
– Discuss details of new Priority Club Cash & Points award nights offers.
– Show how the purchase of Bonus Points when offered in hotel rate options along with the use of Cash & Points is a cheap way to accumulate points for free award nights. This strategy is useful for Priority Club members without excessive account balances. The member earns more points on paid stays and conserves points when redeeming for free nights. The alternative method of buying points from Priority Club at $11.50 per 1,000 points to accumulate extra points (up to 40,000 points per calendar year) costs about twice as much.
Priority Club Award Night Cash and Points Options:
Priority Club follows the lead of Starwood Preferred Guest (SPG) with their own unique version of Cash & Points award nights.
Priority Club is now offering Cash & Points awards for hotels. The twist is that a member must purchase points to be added to the member’s account with the Cash portion of the award rate.
SPG is different from IC Hotels Group in how Cash & Points awards work.
The difference with IC Hotels Group Cash & Points is the Priority Club member is actually making a nonrefundable purchase of Priority Club points at a discount rate ($6 per 1,000 points) to be added to the member’s account balance. The Priority Club member can use the Cash & Points option to buy discounted points at the rate of $6 per 1,000 points and thereby conserve the points redeemed from the account for free hotel nights.
Example: InterContinental Amstel, Amsterdam, Netherlands
(Award Night Redemption: Monday, July 6, 2009)
Lowest Paid Rate: 425€ for King Bed Executive City View on Best Flexible Rate or amazingly the Penthouse Suite is going for 500€ on a nonrefundable rate.
Cash & Points Award Night is available at the following rates:
· 40,000 points for award night
· 35,000 points + $30
· 30,000 points + $60
Assume: Priority Club member has 100,000 points. This used to only be sufficient for 2 nights at the IC Amstel in Amsterdam at a cost of 80,000 points.
Cash & Points now makes a 3-night stay possible at the cost of 90,000 points + $180. Considering the single night cost for the IC Amstel is near $600USD, the option to get 3 nights for 90,000 points + $180 is a fantastic alternative to just two free nights at the hotel.
And the 30,000 points purchased for the three Cash & Points nights may count for elite status qualification if that option is not officially blocked by Priority Club. Discussion on FlyerTalk indicates the purchased points for Cash & Points free nights do count for elite status, at least up to 40,000 points in a calendar year.
Priority Club points purchased through Points & Cash awards do not count toward Priority Club elite status.
FlyerTalk discussion on Cash & Points
One of the primary talking points in the discussion of Priority Club Cash & Points awards on FlyerTalk is whether the Cash & Points award points purchases count towards Priority Club elite status. This point is testing the parameters of the IHG Priority Club loyalty program.
The issue creating confusion is the ability to purchase Priority Club points in two different ways.
1. Buy points directly from Priority Club, up to 40,000 points in a calendar year.
2. Buy points when redeeming Cash & Points award nights
At the present time purchases of points from Priority Club do count towards Priority Club elite qualification, up to the 40,000 points per calendar year limit. A person can buy Gold elite membership in Priority Club for $50 or earn Gold elite with the purchase of 20,000 Priority Club points for $230. Points purchases through the Buy Points link are a totally separate transaction type from the Cash & Points awards.
The debate on FlyerTalk this past week has been whether the points purchased for Cash & Points awards also count towards annual elite qualification. It appears these points may count towards status, but only up to the 40,000 points annual purchase limit. Points purchased for Points & Cash awards do not qualify for elite membership credit for Priority Club.
Cash & Points Award Nights Strategy
The value of the Cash & Points award night option is the strategy to purchase points at nearly 50% off the regular points purchase route (10,000 points =$60 for a Cash and Points award whereas 20,000 points = $230 using the Buy Points option).
Priority Club Points Purchase Options:
There are now 3 easy ways to accumulate Priority Club points.
1. Buy Bonus Points during stays (about $6 to $9 per 1,000 points)
2. Buy points during free night redemption ($6.00 per 1,000 points)
3. Buy Points from Priority Club ($11.50 to $13.50 per 1,000 points)
The first two options cost about 50% of the direct purchase of points.
Example of Purchasing Bonus Points with a Paid Hotel Rate
InterContinental San Francisco
Hotel Rates for one night on Monday, June 22
· $151.05 AAA Queen Bed ($174.46 after tax) is lowest available rate.
· $159 Best Flexible Rate
· $159 California Staycation rate includes breakfast and parking (must be CA resident)
· $164 Plus 1000 Bonus Points ($13 for 1,000 points)
· $169 Plus 2000 Bonus Points ($18 for 2000 points)
· $174 Plus 4,000 Bonus Points ($23 for 4,000 points) [This is a great price at $5.75 per 1000 points compared to purchasing points from Priority Club for $11.50 per 1000 points.]
· $189 Plus Breakfast for Two ($38 premium on AAA rate for two breakfasts)
· Valet Parking is additional $55.86 per night.
The best value here is the value added California Staycation package, but assume that isn’t an option.
Points earned on $174 rate for 4,000 bonus points.
Priority Club general member earns 2,000 points for an InterContinental Hotel stay, plus 4,000 points for this rate. The points premium charge of $23 for 4,000 points works out to about $6.50/1,000 points after tax. This is an earning rate of about 150 points per $1 in hotel bonus points spending compared to the regular earning of about 11 points per dollar for the $174 hotel rate spending at the InterContinental.
The economic value of points purchases is quite easy to show:
InterContinental Hotels (top-tier) = 40,000 points per night.
InterContinental Hotels (lower-tier) = 30,000 points per night.
Crowne Plaza Hotels = 25,000 points per night.
Two options to purchase points in the $6 per 1,000 points price range means a simple table can be used for determining when you will gain value from a free night redemption compared to a paid night.
When you purchase points at $6 per 1,000 through bonus points on paid stays and purchased points on award stays, then you are essentially buying free nights at the price you pay for all the points purchases you make.
Points Purchased at $6/1,000 via Bonus Points on Paid Stays and Purchased Points on Cash & Points Award Stays can mean overall award night savings.
Anytime the total room rate after tax is more than these values, then you will save redeeming points for an award. As always, consider the lost value in promotion offers when redeeming an award vs. a paid stay.
Loyalty Traveler advice: Buy points at $6/1,000 whenever possible in conjunction with paid stays and award stays and you will be able to book a high-priced InterContinental Hotel or Crowne Plaza at a bargain rate and frequently save on the cost of hotel rooms by redeeming your Priority Club points when room rates are too high.
The ability to easily acquire large amounts of low-cost points in Priority Club is its competitive advantage in Cash and Points over Starwood Hotels C&P offers. The economic rationale of buying points for an award stay may not be appealing to someone already saturated with Priority Club points, but most of us travelers fortunately do not fall into that category. The option of buying low-cost points for award travel is a welcome opportunity for hotel rate savings to the travel consumer.