With IHG Discounting Many Hotels Up To 50%, New Dynamic Pricing Is Bad For You

IHG appears to have rolled out fully dynamic pricing for awards. While that means some hotel redemptions for a very low number of points now, long term this is a terrible thing for members.

Dynamic pricing, where the number of points you spend ties to the room rate, means never getting a great deal using points compared to cash. There are times you would never have considered using points before, because a room was too cheap. Dynamic pricing can make you indifferent to cash versus points, the value for using points is never awful, but it’s never great either.

With fixed points pricing (an ‘award chart’) you can get fantastic deals using points – one price is charged all the time, so redeem your points when a room is expensive. Pay cash when rooms are cheap. With dynamic pricing, you get average value every time. That can effectively spell the end of the aspirational nature of a rewards program.

IHG removed their award charts but for the most part they’ve continued to price hotels based on their hidden chart. They began to have deviations last summer. Now points prices are all over the place.

A spokesperson for IHG last year confirmed they were working on ‘variable pricing’, they intended to roll it out before the end of 2019, but promised they would “be sharing additional details as they are available.” They never did that.

I tweeted yesterday about 30% and 40% redemption discounts at many IHG hotels, after it was pointed out by commenter tassojunior. One Mile at a Time this morning calls IHG’s dynamic pricing an “amazing deal” and points to offers like,

  • Miami Kimptons at 25,000 points per night down from 40,000 or more
  • InterContinental Danang at 40,000 points per night down from 40,000
  • InterContinentals in Europe as low as 20,000 points per night

Historically IHG has been, in my view, the least transparent and trustworthy hotel program. Changes without notice is practically the slogan of the program. Googling site site for IHG ‘changes without notice’ literally brings up 7 pages of results. Ironically they understand the key elements of loyalty well, and just don’t practice it.

To be sure the chain already eliminated their award chart, matching Hilton. Marriott has gone to peak and off-peak pricing which gets at the same thing, and charges peak pricing most of the time at otherwise abandoned properties in Europe. And Hyatt has delayed their implementation of peak and off peak, but plans to go there as well.

I just don’t want you to get excited about this, and understand that hotel loyalty programs aren’t doing this for your benefit even though they will spin it otherwise.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Dynamic pricing is a double-edged sword. Good now & in low seasons, but bad when most people will want to travel. I too will miss the aspirational and outsized values.

  2. @Gary
    I’ve tried booking a few Intercontinental hotels in Europe and Asia today that are now pricing at 40k/night using my Chase IHG free night certificates but I keep getting an error during the booking process. I’ve also tried calling IHG reservations and IHG Rewards Club several times today and none of the customer service reps are able to help. Ridiculous!

  3. IHG is hurrying to make these changes while people are still focused on the pandemic.

    As usual, IHG is acting in bad faith. NEVER trust IHG.

  4. They also show point room availability on their site and then when you try and book it they bait you and say no point availability- then showing only rooms for cash. Typical British crap company with NO consumer protections and even worse CS. I did find a few good EU deals but be aware one night in a 2 or 3 night stay might be discounted and the other night(s) are at full boat- slimy to the bone!

  5. Ask the hotel owners what they are being charged for the point guest has earned vs what they are getting paid during redemptions. The points are free to guest but hotels pays form 5.5% to 8%.
    When giest redeems hotel get paid from $17 to $35. At fhe end hotels and franchisees are at loss. They get butchered both the time. All this brands makes money.

  6. Just another negative for the loyal customer. I’m starting to wonder whether it’s even worth it to keep their card, between massive ongoing devaluations and lack of benefits even when you do stay with them a lot. I think it’s time to dump IHG.

  7. @Gary claims: “Dynamic pricing, where the number of points you spend ties to the room rate, means never getting a great deal using points compared to cash.”

    That claim is simply not true, and the reason it is not is that standard award rates are *capped* even for programs that use dynamic pricing and have no award chart. What that means is that at very high end, cash rates may continue to rise but award rates would remain at the cap value, thereby *unlinking* the two and leading to outsized redemption values at ‘aspirational’ properties, especially when combined with the “5th award night free” perk (that World of Hyatt, the “best” program, still does not offer!!!).

    It is based on the just enunciated principle that over the New Year 2020 festivities, I achieved a nominal redemption value of ¢4/HH point on a 5-night award stay at WA Maldives Ithaafushi.

    I’d, in fact, posted the *mathemcatical* proof of what I just stated above over at the now largely defunct InsideFlyer site, and can get into the archives to dig it out..

  8. Thieves who want to sell you points with one hand and – under cover of a concealed pricelist – take away their value with the other hand. You can quickly identify these swindlers when the only positive example they can show is the list-price of a ridiculously expensive hotel in the Maldives

  9. 40K for IC DaNang is an incredible deal. Beautiful property, I stayed there in 2017. It was 50K a night in 2017. Combine that with 4th night free and you get 120K for 4 nights. You have to work each program to your advantage.

  10. As always it is about understanding value and making sure you use points for something worth more than paying for the stay. Of course some people just want a “free” stay regardless of value and that is fine as well.

    I booked a 3 night stay next week at a Holiday Inn Express (exciting I know) for a casino trip and got a little over .6 cent value (52,500 points for $320 cost w all taxes included). Not great but better than .4-.5 I typically see IHG valued. BTW this was w dynamic pricing.

    Yeah you may not get 1-2 cent value anymore but if I get over .5 (especially given how easy it is to earn points) I’m happy. IMHO the trade off with lower pricing if I pay cash under the dynamic model is a plus and offsets any devaluation of points. I mean you still stay in the same hotel for the same or less points – it is just you can’t say you got 2 cent a point in value because the price was reduced. At the end of the day it is pretty much the same thing!

  11. @AC — If you believe that getting a redemption value of 1.7cents/Hyatt point is great, then you should not be apologizing about getting a redemption value of ‘just’ 0.6cent/IHG point because, are you ready? Those two redemption values (i.e., 1.7cents/Hyatt point and 0.6cent/IHG point) are *exactly* the same!!!

    Really.

    G’day.

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