Into the Nights, or not?

I’ve been slow to write about IHG’s Into the Night promotion because I haven’t yet decided exactly how good it is or whether it’s worth playing.  Obviously, if you have paid hotel nights coming up, you might as well enroll in the promo.  And, it’s probably even worth switching from other planned stayes to IHG hotels to fulfill the terms.  In my case, though, I don’t have any eligible IHG stays coming up, and for various reasons I don’t really want to change out of the hotels that I do have booked.

So, I’m going to do an experiment here.  I’m writing this intro without having yet decided what to do.  Should I do “mattress runs” (check into hotels just for the points) to complete the promotion?  I’ll walk through my thinking and decide a plan of action by the end of the post.

First, the basics…  IHG’s promo varies by person.  Each person is given a set of challenges to complete.  Completion of each individual challenge results in bonus points, and completion of a set number of challenges results in the big payouts: your choice of bonus points or free nights.  Often the challenges are stackable.  For example, one challenge would be to book two stays directly on IHG’s website or mobile app and another challenge would be to stay two Saturdays.  Both of those challenges can be met with the same two stays.  With many offers (like the one shown below, which happens to be my wife’s offer), you can complete all needed challenges with a total of 3 eligible nights.

My offer wasn’t as good as my wife’s.  My offer requires 5 nights and results in fewer total points earned (if I choose the points option):

OK, so if I do this at all, it will be through my wife’s account that I book my stays.  In order to decide whether to do this, I need to figure out what the rewards are worth… to me.  For example, how much would I value those 2 Free Nights if I chose that option?

2 Free Nights

The 2 Free Nights option has been a bit of a mystery from the beginning.  Are the free nights bookable anywhere or just certain places?  Are there limited numbers of available free nights to go around?

Even with the assumption that the free nights are good anywhere and anytime, I wasn’t sure how much to value them.  Those two free nights would be absolutely awesome if I knew that I would have an opportunity to use them at a high end Intercontinental Hotel before they expired.  But, my wife and I already get two free nights anywhere thanks to each of us having the IHG credit card (each card offers 1 free night annually).  We already have the problem / opportunity of having to find a good use for those certificates each year.  Do I really want to add to the pile?  In general, I prefer points over free night certificates since points don’t expire.  In this case, though, each free night is theoretically worth as much as 50,000 points (the number of points IHG charges for top tier free nights).  So, one could argue that the 2 free nights are comparable to 100,000 points which would be far more valuable that the 50K points I could get with the point option…. but only if I had a good use for those certificates.

Valuing the free nights is a tough problem, but luckily for me Loyalty Lobby came to the rescue with his post “CLARIFICATION: IHG Rewards Club Into The Nights Award Night Expiry & Availability.”  I highly recommend that you read the post, but the gist is that the Into the Night free nights might not be the same as the free nights you get from the IHG credit card.  They are likely to be capacity controlled and therefore much harder to redeem.

I think that the jury is still out on this one, but Loyalty Lobby’s post casts enough doubt on the situation to make one thing clear to me: If I play the Into the Nights game, it will be for the value of the points, not the free nights.

An important finding in Loyalty Lobby’s post is that people who want the free nights must claim them by January 31 2015 or else they’ll get the points.  My plan (if I do this at all) is to wait until then to claim either.  Hopefully by the end of January some people will have experience with the free nights option and I’ll be able to make a more informed decision at that time as to whether to take the free nights.  For now, though, I’ll assume that points are the way to go…

The value and cost of IHG points

People often point to IHG’s Point Breaks as an example of how valuable IHG points can be.  Point Breaks are a regularly changed list of hotels that are temporarily available for only 5,000 points per night.  It’s not unusual to see hotels on the list that would ordinarily charge over $100 per night, so some would argue that IHG points are worth at least 2 cents each ($.02 x 5,000 = $100).  It is arguably true that when you redeem 5000 points for a $100+ hotel room you are getting around 2 cents per point value, but that’s not the metric I need here.  Redemption value will vary tremendously from one situation to another.  I need a different kind of estimate… how much would I be willing to pay for those points?  That’s the key.

If I play this game, I’ll be effectively buying IHG points.  Let’s say 3 hotel nights cost a total of $300.  If I completed my wife’s offer, she would get a total of 60,500 points from the promotion.  She would also, as usual, earn points for the stays.  IHG offers 10 points per dollar, plus a 50% bonus for Platinum members (which she is, thanks to her IHG credit card).  And, if she pays with her IHG credit card, she’ll earn another 5 points per dollar for a total of 20 points per dollar.  So, for $300 worth of paid nights, she’ll get about 6000 more points.  That’s not entirely accurate since some portion of the $300 is for taxes (which do not earn points), but she might also qualify for other bonus point promotions, so I think this estimate is good enough.  So, we’ll assume that she’ll earn a total of 66,500 points.

Warning: You may face IHG account closure if you sign up for bonus point promotions that you do not qualify for (see this View from the Wing post for details: “IHG Will Seriously Close Your Account for Signing Up for Bonus Offers”).  So, while my wife could earn extra points for promotions that she does qualify her for, I won’t sign her up for others (as I’ve done for myself in the past).

With the assumptions above, it would cost $300 to buy 66,500 points.  That comes to .45 cents per point.  The actual cost per point could be less if I find a way to get cheaper qualifying hotel nights.  On the other hand, the cost per point will be more once I factor in my time, gas for driving to hotels to check in, etc.  So, let’s assume that I can find cheaper hotels but that the savings will offset my other costs.  Let’s go with the .45 cents per point estimate.  Should I buy points at that rate?

An alternative way to buy IHG points at a discount is to book points + cash stays and then cancel the reservations.  When you cancel, you don’t get your cash back.  Instead, you keep the points that the cash portion of the booking paid for.  This is a way to effectively buy IHG points for .7 cents each.  So, the Into the Nights promo is better than the old book and cancel trick, but that still doesn’t tell me whether it is worth it to me.

Is .45 cents per point a good deal?

In my Fair Trading Prices chart, I estimate the fair trading price of IHG points at .5 cents per point.  So, .45 cents per point is slightly better than that target.  Still, it only makes sense to buy points if 1) you know you’ll use them; 2) you know that the value you get from the points will be substantially greater than the cost to buy them; and 3) you don’t already have better alternatives (such as points with other hotel chains).

1) Will I use these points?

In the past three years, I’ve only used IHG points twice.  Once was at the InterContinental London Park Lane, which was a fantastic redemption.  Another was at a Holiday Inn in Nashville which was a decent redemption.  Between my wife and I, we are currently hoarding over 180,000 points and, as I mentioned earlier, we have two free night certificates to use each year.  So, no, I don’t know if I’ll ever use the points earned from this promo!

2) Will I get substantially better than .45 cents value from the points if I do use them?

Maybe we’ll have the opportunity to stay at a fantastic high end IHG property for more than 2 nights.  Assuming the points rate for such a hotel would be 50,000 points per night, using points from this promo would be equivalent to spending $225 per night (.45 cents per point X 50,000 points = $225).  That would be a nice discount over a room that would likely otherwise cost much more.  Or, maybe I’ll find a points break hotel and each night will cost the equivalent of only $22.50.  Keep in mind, though, that I already have a stash of IHG points so the chance of using these points is very slim and therefore the chance of getting better than .45 cents value from them is pretty tiny.

3) Do I have other/better alternatives?

I have large stashes of points with Starwood, Hyatt, Marriott, Hilton, Club Carlson, and IHG.  So, for any given trip, I already have many good options for free nights.  The incremental earnings from this promotion would do little to change that.

Yeah, but its fun!

If you read through the sections above, you can see that it almost certainly doesn’t make sense for me to do this promo.  On, the other hand, IHG has shaped this promotion like a game and I kinda want to play.  And, as I’ve argued before, you don’t always have to do the most rational thing (see “Rationality is overrated”).

Decision time

People who are likely to put the rewards from this promotion to good use will probably find that it makes sense, for them, to do mattress runs to complete their challenge.  In my case, though, it’s clear that doing mattress runs to complete the promotion does not make rational sense.

Despite that, I do want to play this game.  But, $300 is too steep of an entry fee for me.

Here’s my decision: I will not mattress run at $100 per night.  I’ll keep my eyes open for opportunities, though.  We do have until the end of the year to complete the challenges, after all.  If I find hotels that I can check into easily that meet the requirements and are much cheaper than $100 per night, then I’ll consider it.  Or, if my normal course of travel takes me to places where qualifying IHG paid nights are a good option, I’ll do that too.

How about you?  Are you playing the Into the Nights game?

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