IHG doesn’t have an award chart. Award prices closely follow cash rates, but there’s enough variance that we can’t simply use a formula to determine what points are worth. Instead, we observe cash and award rates to see, in practice, how much points are worth. This post has been updated with new data since its previous publication in December 2022. In the latest analysis, the Reasonable Redemption Value (RRV) of IHG points decreased only a tiny bit from 0.63 to 0.62 cents per point.
Background
When collecting points and miles, it’s always a good idea to have a general idea of what points are worth. Let’s say, for example, that you have the opportunity to either earn 1,000 Hyatt points or 2,000 IHG points. Which should you go for? If you don’t know what the points are worth, you’d likely go for the IHG points. But, in my analyses I’ve found Hyatt points to be worth about three times as much as IHG points. Therefore, on average, 1,000 Hyatt points are worth considerably more than 2,000 IHG points. In this post, you’ll find my best current estimate of the value of IHG points. To see our estimates across many programs, see this post: Reasonable Redemption Values (RRVs).
Methodology
In order to determine the value of IHG points, I collected real-world cash prices and point prices. As I’ve done previously, I examined a number of major hotel markets in the U.S.: Chicago, Denver, Los Angeles, Las Vegas, Miami, New York City, Orlando, and Seattle. Within each market, I identified the first three search results with standard award availability and a guest rating of 4 or better*, and I recorded both cash and award prices for three dates each: a weekday, a weekend, and a holiday weekend.
* With Kimpton Hotels, IHG doesn’t show guest ratings. Since Kimpton hotels usually have high ratings, I always included these in the analysis if they showed up in the first 3 qualifying results.
- Why U.S. only? U.S. consumers are known to spend most of their points and miles on domestic travel. Since the majority of this blog’s audience resides in the U.S. we opted for a U.S. centric view of point values.
- Why Guest Ratings? The goal wasn’t to find the 3 best IHG hotels in each market. Instead, the goal was to find 3 IHG bookable hotels that are very popular. Which ones are people really likely to book? By using a combination of IHG’s default sorting and by picking only well rated hotels, I think it’s reasonable to assume that many members would pick these hotels.
- Which paid rates were selected? I always picked the best fully refundable paid rate shown on IHG’s website in which the cancelation rules most closely match the award cancelation rules. I do not apply any discounts like AAA, military, government, etc. For this analysis, I always selected IHG’s best refundable member rate.
- Which specific dates did I use?
- Weekday: Wednesday September 11, 2024
- Weekend: Friday-Sunday September 13 – 15, 2024
- Holiday Weekend: Friday-Mon August 30 – September 2, 2024 (Labor Day Weekend)
New Calculation Approach
Starting 12/5/2022 with my Hyatt analysis, I began calculating Cents Per Point (CPP) using a new formula. In all past hotel CPP calculations, I didn’t account for taxes and fees or points earned on paid stays. I figured that those things basically cancelled each other out. Going forward, I am including these factors, as well as resort fees, in the CPP calculation. The calculation is based on the following terms:
- Base Cash Rate: This is the hotel room rate before taxes and fees.
- Total Cash Rate: This is the total amount, including taxes and fees, that would be paid if booking a hotel’s cash rate.
- Resort Fee: This is a fee that is imposed by many hotels above and beyond any required taxes. This goes by different names at different hotels: Resort fee, Destination charge, Founders fee, etc.
- Points Per Dollar Earned: The number of points per dollar earned by non-elite members on paid stays. For example, Hyatt members earn 5 points per dollar, Hilton, IHG, and Marriott members earn 10 points per dollar (at most hotels), etc.
- Points Earned on Cash Rate: This is the number of points you would earn if you paid the cash rate. The calculation for this is: (Base Cash Rate) x (Points Per Dollar Earned). For this calculation, our default approach is to assume that the traveler does not have elite status (elite members earn more points per dollar).
- Point Price: The number of points required to book a night at the hotel
- Cents Per Point (CPP): This is the value you get per point when using your points instead of cash to pay for a stay.
Hotel Programs that Waive Resort Fees on Award Stays
Hilton, Hyatt, and Wyndham waive resort fees when you book stays using points or free night certificates. For these chains, the resort fee does not have to be considered separately from the Total Cash Rate (which includes the resort fee). So, the CPP calculation is as follows:
CPP = Total Cash Rate ÷ [Point Price + Points Earned on Cash Rate]
Hotel Programs that Charge Resort Fees on Award Stays
IHG, Marriott, and many other hotel programs impose resort fees on award stays. For these chains, the resort fee must be specifically taken into account in the CPP calculation. We do that by subtracting it out of the Total Cash Rate. The CPP calculation is as follows:
CPP = [Total Cash Rate – Resort Fee] ÷ [Point Price + Points Earned on Cash Rate]
Results
Point Value
| Analysis Date: | 7/15/24 | 12/19/22 |
|---|---|---|
| Point Value (Median) | 0.62 | 0.63 |
| Point Value (Mean) | 0.61 | 0.62 |
| Cash Price (Median) | $296 | $297 |
| Cash Price (Mean) | $314 | $355 |
| Award Price (Median) | 43,167 | 44,000 |
| Award Price (Mean) | 47,074 | 52,209 |
| Minimum Point Value | 0.49 | 0.45 |
| Maximum Point Value | 0.77 | 0.73 |
The median observed point value was 0.62 cents per point. This means that half of the observed results offered equal or better point value and half offered equal or worse value. Another way to think about it is that without trying to cherry pick good awards, you have a 50/50 chance of getting 0.62 cents or better value from your IHG points when booking free night awards.
Pick your own point value
| Analysis Date: | 7/15/24 | 12/19/22 |
|---|---|---|
| 50th Percentile (Median) | 0.62 | 0.63 |
| 60th Percentile | 0.62 | 0.64 |
| 70th Percentile | 0.64 | 0.65 |
| 80th Percentile | 0.65 | 0.67 |
| 90th Percentile | 0.68 | 0.69 |
When we publish Reasonable Redemption Values of points (RRVs), we conservatively pick the middle value, or the 50th percentile. The idea is that just by randomly picking hotels to use your points, you have a 50/50 chance of getting this value or better. But what if you cherry-pick awards? With some other hotel programs, the 80th percentile cents per point is much higher than the median. And this used to be true with IHG too, but in recent analyses I found that the 80th or even 90th percentile was only slightly higher than the median. To be clear, there are cases where you can get better than 0.68 cents per point value, but the chance of stumbling upon that higher value is low.
This analysis shows that even those who cherry-pick good value awards for stays within the United States can’t count on regularly getting much more than 0.65 cents per point value with properties within the U.S.
New Reasonable Redemption Value: 0.62
Our Reasonable Redemption Value (RRV) for IHG points was previously set to 0.63 cents per point. With the latest analysis, the value went down only a smidge to 0.62. RRV’s are intended to be the point at which it is reasonable to get that much value or better for your points. In this case, it’s not necessarily easy to get much more value, but it’s definitely easy to get around 0.62 cents per point value.
- Reasonable Redemption Value for IHG: 0.62 cents per point
- Reasonable Redemption Value for those who cherry pick awards: 0.65 cents per point
Overvaluing vs. Undervaluing Points
There is no perfect way to estimate the value of points. Decisions we made here in some ways overvalue points and in some ways undervalue points. The hope is that these things roughly offset each other…
Factors that cause us to undervalue points
- With hotel programs that offer 4th Night Free Awards (IHG, with some credit cards), or 5th Night Free Awards (Hilton & Marriott), or award discounts (Wyndham), we do not consider the point savings in our analyses.
- With hotel programs that offer free parking on award stays to top-tier elites (Hyatt), we do not factor this in.
Factors that cause us to overvalue points
- We do not use discount rates (other than member rates) in our analyses. In real-life, many people book hotels cheaper (and sometimes far cheaper) by using AAA rates, government & military rates, senior rates, etc.
- We do not use hotel promotional rates. Often, individual hotels have deals such as “Stay 2 Nights, Get 1 Night Free” which can greatly reduce the cost of a stay.
- We do not use prepaid rates in our analyses. Sometimes these rates are significantly lower than refundable rates.
- We do not factor in rebates which can be earned from booking hotels through shopping portals.
- We do not factor in extra points earned on paid stays for those with elite status.
- We do not factor in rewards earned from credit card spend at hotels.
- We do not factor in hotel loyalty program promotions: Most promotions, but not all, only offer incentives for paid stays. We often see promos offering bonus points, double or triple points, free night awards, etc.
- With hotel programs that waive resort fees for top tier elites on paid stays (e.g. Hyatt), we do not factor this in.
Conclusion
Based on the latest analysis, we decreased the IHG RRV from 0.63 to 0.62 cents per point. Further, the latest percentile results show that those who cherry-pick awards (80th percentile) can expect to get around 0.65 cents per point.
For a complete list of Reasonable Redemption Values (and links to posts like this one), see: Reasonable Redemption Values (RRVs).
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I appreciate you comparing cash prices that are refundable to point purchases, a lot of people overlook that and fail to realize that adds a lot of value per point. You are ahead of a lot of your peers in that are, well done!
Your compensation for resort fees is also insightful.
I see your calculation for CPP and I understand it, but I politely disagree with your methodology.
Since you earn points paying cash and you can buy points for 0.5 cents per point on sale, which is what all smart IHG members do, I feel the calculation should be:
CPP=(Total Cash Price-Resort Fee-[Points earned on stay x 0.005])/Points Price
You are not paying extra points, you are earning extra points towards a future stay and I think that is something of critical importance. It is not an extra cost in points now, it is a loss of earnings that can be applied to a future stay. Therefore, the value of the points need to be subtracted from the cash price, not added to the points required.
For the IC in Chicago for NYE, points are 42K at $364.47 total price with 27.26 fee. The points earned for a Premier card holder would be 7386 points.
My calculation then yields 0.72 cents per point versus your value of 0.68.
Of course, as others including yourself have noted, Select card holders would get a value of 0.80 cents per point. Also, as you and others have noted, the use of 4 nights for 3 greatly increases the value. Again, as others including yourself have noted, combining both the Select and 4 for 3 night discounts make for an extremely appealing value.
There are thousands and thousands of IHG properties and you can’t analyze them all but I thought the selection of metro areas was pretty limited along with the time frame. Also, keeping it to just one or two nights is not factoring in the common behalf booking for longer stays.
For example, the booking the HIX on the Big Island of Hawaii next year for four nights during spring break gives me a value of 0.85 cents per point. That is available to anyone that gets the credit card. Obviously, Select card holders get an even better deal, but 0.85 CPP for any Premier card holder is a heck of a deal.
Thanks.
Excuse me, “common behavior booking”, sorry about the autocorrect error.
I find IHG points to be sneaky valuable, especially if you hold the Old IHG card + the Premier and Business cards. Then you’re benefitting from 4th night free, 10% back on points bookings, one capped FNC, and two toppable FNCs. That’s a lot of value for their points that doesn’t necessarily show up in the standard RRV.
For example, I could book via points on a 4th night free booking, save 10% of the points for that booking, then top off up to two uncapped FNC night reservations thereafter while saving tens of thousands of points.
I’m doing this for a 5 night stay at the Kimpton Seafire in the spring. 5 nights would run 350,000 points absent holding any cards. With the above trifecta, 5 nights costs only 156,000 points. An awesome deal!
Not saying the analysis is flawed in anyway, but I think the general points and miles crowd doesn’t see IHG as a valuable hotel currency to hold.
Yep, I have both cards too and benefit from all of that too!
Thanks, Greg! Always appreciate these analyses. Lately, I’ve been wondering, would you reassess the RRV of transferable currencies? Given:
1) Our RRVs have always been on the very conservative side. I don’t think the recent devaluations are enough cause to lower them further. Plus, keep in mind that some programs have arguably become more valuable. For example, Flying Blue now offers 50K biz class between North America and Europe, plus they added free stopovers. Alaska (Bilt transfer partner) has many new sweetspots that are arguably more accessible to most of us. Qatar and Finnair have added new, valuable ways to use Avios.
2) Point sales don’t affect our RRVs (which are estimates of how much value you can get for redeeming points). Instead, when you see a sale in which the points cost less than the RRV, you know that it’s worth paying attention to that sale.
3) Restriction of partner award availability: Yes, that makes the individual star alliance programs less valuable (especially to US residents). In some cases, though (not saying United), I think that programs that do that tend to open more space up to their own members. So, for example, you may see Air France/KLM offering less space to partners but more “saver” space to their own members. Regardless, my answer in part 1 stands.
I’m getting 7 cents/ point on 8 night stay at the kimpton seafire over Christmas week- so there still are some opportunities for outsized value- and yes I wouldn’t have really paid 30k for the room- but we did it last year too and it’s a steal with points
Interesting.
I’m seeing a roughly 10% devaluation across the scattered properties I’ve been shopping. Admittedly my method is not as rigorous as yours, but I’m in the camp that IHG recently devalued.
I may write a separate post about this. There are a number of possible explanations here…
Another possibility is that IHG dynamic award has become more effective at identifying and addressing outliers.
Generally the properties I shadow are ones I’ve previously identified as being a good deal and worth keeping track of as my plans solidify.
Thank you for your thoroughness.
You can see this a bit in the reduction of value at the 70, 80, and 90th percentile. IHG might be systematically working on outliers. That being said, all of the Grand Cayman properties will continue to be a steal with points because of the cash pricing and because of the massive taxes (30%+) that the Cayman Islands government puts on cash stays. Because IHG points bookings (and points + cash bookings) waive taxes, they will likely be bigger value than will show up in the RRV.
Thanks for the methodical assessment.
Were bookings with less favorable cancellation policies much cheaper than bookings with free cancellation? If so, then the cash prices you used in your comparison would have inflated the value of IHG points. For instance, if the nonrefundable rate was 25% less than the free cancellation rate, most people would have chosen the non-refundable rate. In such a case, the cheapest rate should influence the value we assign to IHG points.
Also, is your sample size 24 hotels total in 8 different cities? I hope they’re not all downtown. If I were IHG, I could easily game your assessment by offering good point values for those hotels.
Hi Greg, was this analysis done before or after the devaluation last week? I had just checked on a couple of hotels I had recently booked that were consistently in the 85-100K range, and they definitely jumped to the 120K range. I haven’t looked at their cash rates, but I seriously double that hotel would be able to support a 20-25% cash price increase as well for the rest of the year…
The analysis was done today
Thanks, I’ll have to keep an eye out to see if I was getting better than average value before and now it’s consistently lower. Also, I noticed you mention US cities, one of the hotels I know devalued (in points) is in Europe, so maybe it just regressed to the mean… [PS — *double -> doubt in my comment]
My methodology is much simpler. I look at the hotel rate and compare that rate to what a reward stay using points will cost using the value of $5 per 1,000 points.
I purchased 270,000 points at $5 per 1,000 points in 2022.
I averaged about $60 per night using IHG points for 35 nights in 2022. I paid $709 for six nights at Hotel Indigo Krakow and earned 54,000 points.
In 2022 I redeemed points in Lisbon, Portugal; Thessaloniki, Greece; Madrid, Spain; Gdansk and Krakow, Poland with 28 nights booked using 4th night free rate for an instant 25% discount.
For 2023 stays I have Diamond elite status with the choice of free breakfast, annual lounge access and 2 suite upgrades to use.
My redemption value in 2022 has ranged from a low $6.53 per 1,000 points for one 15,000 points night at Crowne Plaza Madrid Airport to $13.91 per 1,000 points for 4 nights in June at 48,000 points at Holiday Inn Express Av Liberdade in Lisbon.
My most recent points redemption used 84,000 points ($420) for 5 nights when the published rate would be $630. That is $7.50 per 1,000 points redemption value.
A snapshot of IHG rates is only data points based on that day. I typically book IHG reward stays, cancel and rebook them two or more times as reward rates change with IHG dynamic pricing.
I have a stay in Amsterdam booked in Nov 2022 for 20,250 per night. That same hotel is now 32,500 points per night.
Book reward stays early and check back periodically for lower rates.
A correction in above comment. I purchased 420,000 IHG points for $2,100 in 2022.
I
Thanks for the update Greg.
I do think Eric is correct to question your focus on big cities.
IHG is a great complement to a big-city focused chain like Hyatt precisely because they have so many properties in more rural or even second-tier areas. So for example, Hyatt has several properties in Washington’s major market (Seattle-Tacoma), but none at all in its second biggest market (the greater Spokane area on the state’s east side). By contrast, IHG has several properties not just in rural areas statewide, but in the Spokane area. And in my experience, the IHG point value in the less populated areas tends to be higher.
Indeed, as a longtime Hyatt Globalist and IHG Diamond, I find the two programs complement each other quite well.
But if you simply do the 4th night free, then your rrv would be 1.33x more, or .84 cpp. That’s easy to get. If you also have the old IHG card you get 10% back on top of that, putting the value around .924 cpp. That is relatively easy to accomplish as long as you do a four night stay. It is the reason I have bought points (and gotten more than 1cpp, though that was in Vietnam). I know you include that in the disclaimer, but given how cheap IHG points are to buy and the low threshhold of four nights I find this doable, whereas I’ve only once been able to take advantage of a Hilton or Marriott fifth night free.
I would add value to IHG bc of 4th night free awards and the cheap cost of points. I would not add value to Hilton or Marriott based on their fifth night free.
I wonder if there might be more higher-value bookings if you considered random locations instead of three places in each of the big cities. I did quite a bit better than 0.65 at a Candlewood in Wyoming for this summer. That’s also an area where IHG (as well as Marriott and Hilton) shines in comparison to Hyatt – the closest Hyatt is about a 4.5 hour drive away.
Not saying the methodology is wrong at all, just that I suspect that’s where more outsized value is available now. (It’s a different program, but on the same trip I reserved a $400 Fairfield for 20k Bonvoy points)
[…] What Are IHG Points Worth: Now that IHG has revamped their rewards program, the value of their points have increased. Valuing points is subjective, as what appeals to one person won’t appeal to the other. Yet this should give you a good idea of the value you can get from IHG points now. […]
Just wondering when you’ll ever see the light that when it comes to redemption: averages are meaningless. When you choose to use points, do you shoot for average? When choosing from options from a given destination, do you choose the average? No, you choose the best bang for the points. You selectively choose when to use points based on the destination, and the options at that destination. If there’s not a good points option then you pay cash, right? So then how in that context does averaging make any sense whatsoever?
This methodology just plays right into Marriotts hand of turning their program into a cashback rebate program (that is only redeemable at Marriotts, so much worse than cashback). It defeats the whole purpose of points and loyalty. Sorry, but I reject your entire premise of this, and your Marriott valuation claiming that the point values have gone up, which was the most ridiculous thing I’ve ever read on your blog.
Did you read the post? They did percentiles. The percentiles showed there were no “bang for buck” redemptions. It’s all 0.6 cents up and down the food chain.
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What I’m hearing is that you can buy at 0.5 cents per point and redeem at 0.6 cents per point. Combine with 4th night free and 10% rebate, and you can get four $100 hotel nights for $225. That’s a 43.75% discount just for being a “cool kid” in the know. I’ll high five Frequent Miler for that.
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This reporting is great for Holiday Inns by airports in Texas. This is not so good for the Cayman Islands on Christmas. It is what it is.
Yes I did, did you not ready my reply? I’m saying programs that give you rewards as flat cash rebates are garbage, and you’re telling me that you like that. OK, so my question to you: why bother with loyalty then? You can earn cashback easily, and at better rates than Marriott or IHG is offering, no loyalty needed. Enjoy your holiday inn express in texas with powdered egg breakfast, is that the reward you want for being loyal? Whatever, you do you, you deserve what you settle for.
I had every Hotel brand card up to 4 years ago then dumped them mostly worthless.If u can find a hotel that works go for it .My best airport hotels were in Nice,France like $100 or free 4 years ago.All the brands are there and they open up for their 4* Breakfasts at 5am with Super Service too. ..
Not everyone can spend $500k on their cards every year.
Enjoy ur Trips !!!
On the method, of course the normally 10% tax should be factored in as saved so 6.6 cents. I have the 10% rebate card so that would make mine 7.2. I also use 4th night free so that’s almost 10 cents. The flexibility of awards is another + variable.
But even with all the add-on benefits, I still barely pass 5 cents pre tax. The 10% sales tax saved is actually the biggest perk.
Tax varies, sometimes a great deal, from 10% and is close to cancelled out by points earnings on paid stays.
I find myself using IHG points at my go-to Philadelphia staycation hotel in the Winter, where paid rates are high but the point redemption value is a bargain (especially with the legacy 10% off IHG card). The Monaco in Philly can be as low as 29K points in the winter where rates are about $230/night. We’ve been there so often we usually get upgraded to an Independence Mall view corner spa room, which is a real treat. We live in Philly but always take a weekend away to act like tourists and get some cheesesteaks and enjoy the view.
@ Greg — I still cannot bring myself to value IHG points above 0.5 since they are available for purchase at that rate so frequently. They don’t sell points to lose money. I am thrilled to get 0.65 cpp, but sadly the days of booking the IC Willard for 70,000 points per night for the Presidential inauguration are likely over.
That hits on something here: IHG isn’t losing money but their (independently owned) hotels are. Those hotels get shockingly low reimbursements. View from the Wing has listed some of these for Marriott. So with these .5c points sales IHG is taking in a lot more money than they pay to their hotels.
I have example that IHG pays more to the hotels that I paid in points assuming 1000 points is 5USD
Interesting data point. I was relying on what I read from Gary Leff in View from the Wing. His data came mostly from Marriott, I believe. I assumed that IHG was about the same but your comment suggests that may not be so.
An example is that I stayed in HIX in bangkok for 5k points per night, after 4th night free and10% rebate, it was 13500 points and 500 points welcome amenity. 13000 points is net cost to me. The folio shows the hotel got 33xx THB for my stay which is around 100 USD.
In other words, these cheap points sales generate positive net revenue for IHG but are probably not good for the hotel owners who must accept the low reimbursements for award stays.