IHG devaluation: variable pricing creeping higher, value dipping

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View from the Wing and Loyalty Lobby flag a stealth IHG devaluation beyond the fact that at least one Six Senses property now costs about a quarter million points per night: some Holiday Inn Express properties are now running as much as 70,000 points per night, Kimptons are up to 85,000 in some cases, and some Intercontinental properties are now as high as 120,000 points per night. Loyalty Lobby notes a number of examples showing that IHG appears to be pricing many properties at a value of under 0.4c per point. That stinks.

Holiday Inn Roanoke IHG

Back when IHG had an award chart, it topped out at 50K points per night until early 2016 when they introduced a 60K level and then 70K in 2018. On our last podcast episode, Greg noted that one of the positives of IHG moving to variable pricing has been the fact that you can sometimes use 40K free night certificates from the IHG Rewards Premier card (or the no-longer-available IHG Rewards Club Select card) at nicer properties where you may not have had the chance to use them previously.

Unfortunately, View from the Wing and Loyalty Lobby point out the problem at the other end of the spectrum: some lower-tier properties have gotten out of control with the variance of variable pricing. While Gary flags the Holiday Inn Express Zion Springdale at as high as 70K points per night, that property isn’t alone in that range. The Holiday Inn Express in Cooperstown, NY ranges this summer from as low as 26K points per night:

To as high as 63K points per night.

Again, to put that in perspective, that’s more points per night than the top tier of IHG just a couple of years ago. Properties like the Intercontinental Bora-Bora for fewer points per night than this rural Holiday Inn Express is charging. To be fair, Cooperstown draws a large tourist crowd in the summertime and there is an absolute shortage of rooms, so room rates tend to be high — the lowest cash rate for the same night was $293. On the other hand, it’s worth noting that the Holiday Inn Express isn’t actually in Cooperstown since they don’t allow chains within the town, so you’re looking at 63K points per night to stay on the side of a rural highway surrounded by rolling hills and….not much else.

And while redemptions had topped out at 100K per night before the addition of the Six Senses properties, we now see that some properties like the Intercontinental Maldives are now up to 120,000 points per night.

That is more than double the top tier of just 5 years ago. Ouch.

It doesn’t help that base earnings for the credit card and loyalty members haven’t seen any increase during a period in which hotel award pricing has skyrocketed. While we’ve seen increased welcome bonuses on the IHG credit cards, it isn’t any easier to earn points en masse today than it was five years ago — and given the general weakening of IHG Accelerate promotions, it may even be harder to amass IHG points today for many members.

And worse yet, Loyalty Lobby points out extensive examples where hotels are pricing awards at a value of between 0.34c and 0.38c per point. Most hotels had previously been pricing at around half a cent per point, so this appears to be a pretty significant devaluation across the board. This isn’t true in all situations — you’ll still find some instances where points are worth more — but overall, the news is not good.

None of this is particularly surprising; we knew when IHG introduced dynamic pricing that it would lead to some hotels creeping in price during periods of high demand. Nonetheless, it is disappointing to see lower-tier brands approach the top tier of less than a year ago.

On a recent Frequent Miler on the Air podcast, we addressed a reader question about whether dynamic pricing has made us more bullish on the IHG Rewards Premier credit card. We essentially said that it hasn’t — and this certainly does nothing to change my mind.

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