May072019

IHG Points and Cash variable pricing is here

Back in February 2019 Head for Points tuned into a statement by Keith Barr, IHG CEO from the 2018 financial report posted February 19. Numerous bloggers picked up the story from there.

Strengthen loyalty programme ā€“ Continuing to innovate IHG Rewards Club to build stronger and deeper relationships with our guests to drive high value revenue across our hotel estate

  • Loyalty room revenue contribution up 4%pts in 4 years to 43%, including ~50% in the Americas.

  • Loyalty members 7x more likely to book direct, and deliver a 25% stay premium.

  • Testing new features for 2019 roll-out, designed to increase member engagement with variable point pricing.

There was all kinds of speculation on the meaning of “variable point pricing”. Did it mean IHG Rewards Club would change its program to emulate Hilton Honors variable price awards, where you don’t actually know the price for a reward night until you check the dates for your stay?

So far there has been no sign of this happening with IHG Rewards Club Standard Reward nights, however, this past week I became aware there is variable pricing in place at hotels for IHG Rewards Club Points and Cash reward nights.

IHG Rewards Club Points and Cash Variable Pricing

This past week I have seen examples of variable point pricing after the Accelerate promotion posted and I began searching IHG Rewards Club Points & Cash rates. While the points rates are not variable, the cash component is variable in a way that I have not previously seen.

For at least the past two years there have been different cash amounts to buy points at different hotels. For example, some hotels charged $35 for 5,000 points and some hotels charged $40 or more. Some hotels charged $115 for 20,000 points and some hotels charged $130. However, these rates were the same for any specific hotel regardless of the date.

Over the past week what I have found are many hotels charging different cash amounts for 5,000 and 10,000 points for different dates at the same hotel. This is a change I had not seen previously.

Holiday Inn Express – Ft. Lauderdale Cruise-Airport

Thursday July 18 Points and Cash rates

Advance Purchase Rate = $136.80

Best Flexible Rate = $146.30

40,000 points = standard rate

  • 35,000 points + $39 = $7.80 per 1,000 points to buy 5,000 points
  • 30,000 points + $75 = $7.50 per 1,000 points to buy 10,000 points
  • 25,000 points + $95 = $6.33 per 1,000 points to buy 15,000 points
  • 20,000 points + $115 = $5.75 per 1,000 points to buy 20,000 points

There is nothing unusual about this pricing. These kinds of price differences per 1,000 points purchased with a Points and Cash booking have been in place for a couple of years.

The difference I now see are different cash amounts to buy a Points and Cash reward night at the same hotel on different dates. Previously when I checked the price for Points and Cash rates for one date, the price was the same to buy that amount of points on other dates for any specific hotel. In the past week I have seen different Points and Cash rates at several hotels depending on the date.

What is odd is the example below shows that lower or higher Points and Cash rates do not necessarily correlate to lower or higher paid rates, as one might expect. The room rates are lower on Thursday, July 18 compared to Saturday, July 20, yet the Points and Cash rates are lower on Saturday night when room rates are higher.

Holiday Inn Express – Ft. Lauderdale Cruise-Airport (17th Street Causeway)

Saturday July 20 Points and Cash rates

Advance Purchase Rate = $152.95

Best Flexible Rate = $160.55

40,000 points = standard rate

  • 35,000 points + $30 = $6.00 per 1,000 points
  • 30,000 points + $60 = $6.00 per 1,000 points
  • 25,000 points + $89 = $5.93 per 1,000 points
  • 20,000 points + $115 = $5.75 per 1,000 points

HIX Fort Lauderdale Cruise-Airport Points and Cash reward night on 7/20/2019 different cash rates.

I have seen this for several hotels in different countries.

Below is another hotel example from Fort Lauderdale.

Holiday Inn Express & Suites Fort Lauderdale Airport/Cruise (State Street)

This is actually a different hotel than the one above for Points and Cash rates. How many people take a taxi to the wrong hotel?

Thursday July 18, 2019

Thursday July 18 Points and Cash rates

Advance Purchase Rate = $100.70

Best Flexible Rate = $111.15

40,000 points = standard rate

  • 35,000 points + $54 = $10.80 per 1,000 points to buy 5,000 points
  • 30,000 points + $84 = $8.40 per 1,000 points to buy 10,000 points

It would be foolish to pay these amounts for a Points and Cash stay unless you had a super-sized Accelerate bonus points offer.

These Points and Cash rates at HIX State Street are significantly higher than the other HIX 17th Street property at $39 and $75 for the same date when rates at 17th Street hotel are $35 per night higher.

Holiday Inn Express & Suites Fort Lauderdale Airport/Cruise (State Street)

Saturday July 20 Points and Cash rates

Advance Purchase Rate = not available

Best Flexible Rate = $125.40

40,000 points = standard rate

  • 35,000 points + $39 = $7.80 per 1,000 points to buy 5,000 points
  • 30,000 points + $69 = $6.90 per 1,000 points to buy 10,000 points
  • 25,000 points + $92 = $6.13 per 1,000 points to buy 15,000 points

 

Both of these Holiday Inn Express hotels show variable Points and Cash cash rates with lower priced cash rate portion and increased options for weekend nights compared to weekday nights, even though weekend rates are higher at both hotels than weeknight rates on these dates.

Another example I found is from Holiday Inn Congress Center Prague and indicates you might want to also check IHG Points and Cash rates for individual nights if planning an extended stay.

Holiday Inn Congress Center Prague Points + Cash rates

Thu June 27

  • 15,000 points standard rate
  • 10,000 points + 48 EUR
  • 5,000 points + 72 EUR

Fri June 28

  • 15,000 points standard rate
  • 10,000 points + 34 EUR
  • 5,000 points + 58 EUR

Sat June 29

  • 15,000 points standard rate
  • 10,000 points + 34 EUR
  • 5,000 points + 58 EUR

Thu June 27 – Sun June 30

  • 15,000 points standard rate
  • 10,000 points + 43 EUR
  • 5,000 points + 66 EUR

What you should notice here is the combined rate to buy 5,000 points each night for three individual Points and Cash nights is 34 + 34 + 48 = 116 EUR. This means the 3-night combined rate for these dates is 116 EUR or 38.67 EUR, let’s say 39 EUR per night.

However, Points and Cash rate being charged for the 3-night June 27-30 reward stay is 43 EUR per night for 129 EUR. This is a 13 EUR overcharge to buy 15,000 points compared to booking three separate Points and Cash nights buying 5,000 points each night. Disregard the actual high price of points for these Points and Cash reward nights since room rates and Points and Cash rates actually favor booking a standard reward nights for 15,000 points.

Buy 10,000 points per night and you pay 188 EUR to buy 30,000 points as three separate Points and Cash reward nights, yet you pay 198 EUR if you book a 3-night Points and Cash reward stay at Holiday Inn Prague.

Based on the examples shown here I thought this might simply be a matter of higher IHG Points and Cash rates on weekend nights compared to weekday nights. Yet I have found some hotels with three different Points and Cash rates in the same week and I have seen hotels with IHG Points and Cash higher cash rates on some weekends than other weekends with higher cash rates on some Mondays than other Mondays. No rhyme or reason since Points and Cash rates do not correlate to the lowest room rates for the same date. Some high rate days have lower Points and Cash rates and some low rate days have high Points and Cash rates at the same hotel.

There is plenty of evidence revealing IHG Rewards Club has instituted variable points pricing. It just happens to be disguised at this point in variable cash prices for Points and Cash reward stays with no indication yet that I have seen of variable points pricing for IHG Rewards Club Standard Rewards.

 

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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