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News
IHG's dynamic pricing goes wild, spiking award rates for some hotels
Katie Genter is a digital nomad who has traveled full time since June 2017. She writes and edits stories about points and miles, and loyalty programs, often letting her personal experiences color these stories.
April 2, 2021 • 7 min read
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Quick summary
IHG's dynamic award pricing has led to higher points requirements at many top-tier properties, with some now charging up to 120,000 points per night.
Recent changes removed previous limits on award pricing, allowing rates to fluctuate daily based on demand and seasonality.
Some redemptions now yield lower value, with examples as low as 0.35 cents per point, well below TPG's valuation of 0.5 cents per point as of June 2024.
Despite these changes, strong redemption opportunities remain at select hotels, especially when leveraging multi-night stay benefits.
What to consider
Award pricing can change frequently and is no longer capped, making it important to check rates before booking.
Redemption value varies widely by property and date, so calculating the cents-per-point value is essential to maximize benefits.
TPG's valuations peg IHG points at 0.5 cents each as of June 2024, providing a benchmark for assessing redemption value.
What you'll miss from the article
A detailed breakdown of specific properties and scenarios where you can still achieve high-value IHG points redemptions despite recent devaluations.
Generated by AI with support from our editorial team.
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Just over a month ago, I wrote about why I depleted my IHG account to make eight redemptions. After all, I was able to get an excellent redemption value of 1.32 cents per point across eight redemptions. I knew this type of redemption value -- 2.48 times TPG’s valuation of IHG Rewards points (0.5 cents per point) -- wouldn't last forever. But, I hoped I'd find great value redemptions for months to come.
Well, now we're starting to see the negative side of IHG's dynamic pricing. When I first saw a Loyalty Lobby post earlier today about IHG devaluing its rewards to 0.35 cents per point, I panicked. After all, my husband JT recently bought a significant amount of IHG Rewards points at 0.5 cents per point and we have yet to redeem them all. Luckily, although IHG made some changes to its award pricing algorithm on April 1, 2021, the devaluation isn't as bad as I'd initially assumed. Here's what you need to know.
Higher award night costs
Intercontinental Bora Bora Le Moana (Photo by Zach Honig/The Points Guy)
One oft-forgotten negative of dynamic award pricing is that you can't easily compare new pricing to old pricing. There is no old award chart to use for comparison and most of us don't keep records of what specific properties cost in the past. However, I know from experience that specific aspirational IHG Rewards properties have consistently priced at 70,000 or 100,000 points per night. Now these properties are consistently pricing at 100,000 points and 120,000 points per night. A few examples:
I didn't find any currently bookable award nights at the InterContinental Hotels Bora Bora Resort Thalasso Spa, which previously cost 70,000 points per night when you could find availability. So, unfortunately, I can't say how this resort will price when award availability appears.
I'm also seeing other properties, such as the Kimpton St Honoré Paris and InterContinental Paris Le Grand, cost more than 70,000 points on some nights. I feel less confident that these properties never cost more than 70,000 points per night in the past, since I haven't closely tracked them. But they're pricing higher than 70,000 points on multiple dates now.
When introducing dynamic pricing last year, IHG didn't announce a price cap for its awards. But I've noticed since IHG introduced dynamic pricing that no property offered award prices higher than I remembered that property charging before dynamic pricing. So my hunch is that yesterday IHG removed the limit that capped awards to the price charged before dynamic pricing.
An IHG Hotels and Resorts spokesperson confirmed to TPG that reward nights aren't defined by minimum or maximum point amounts. Additionally, this spokesperson noted that redemption rates update as often as daily based on demand, seasonality and other factors.
The Loyalty Lobby article published earlier today noted that "several readers have contacted us over the past 24 hours regarding obscenely high point prices for stays at IHG affiliated hotels". And indeed, it's easy to find examples of high IHG point prices that result in low redemption rates.
For example, consider the InterContinental Grand Stanford Hong Kong. You could pay $195 or 44,000 points for a one-night stay in November, which gives a redemption rate of just 0.44 cents per point.
(Screenshot courtesy of IHG Rewards)
Or consider the InterContinental Singapore. This one-night stay in September would cost $212 or 58,000 points, which offers a redemption rate of 0.37 cents per point.
(Screenshot courtesy of IHG Rewards)
One of the worst redemptions rates I saw was at the InterContinental Tokyo Bay. For a one-night stay in August, you could pay $276 or use 80,000 points, for a redemption rate of 0.35 cents per point.
(Screenshot courtesy of IHG Rewards)
Unfortunately, these are far from the only examples of high points costs and poor redemption rates. So, it's essential to calculate the redemption value you'll get before redeeming IHG Rewards points now.
Since I don't have data for how these properties were priced a few days ago, I can't conclusively say whether these poor redemption rates are new. But, as I'll discuss in the next section, you can certainly do a lot better when redeeming IHG points.
Not all hope is lost for IHG loyalists. After all, for most of the destinations listed above, I found a different IHG hotel on the same date that could provide a good redemption value. For example, you can redeem 18,000 points or pay $195 for a one-night stay this November at the Holiday Inn Express Causeway Bay Hong Kong. At this rate, you'd get a redemption rate of 1.08 cents per point.
(Screenshot courtesy of IHG Rewards)
And you pay $190 or 21,000 points for a one-night stay at the Holiday Inn Express Singapore Orchard Road this September, for a redemption rate of 0.90 cents per point.
(Screenshot courtesy of IHG Rewards)
And you can stay in the middle of New York City this June at the Holiday Inn Express New York City Chelsea for 21,000 points or $293. This redemption would give you a massive 1.40 cents per point.
(Screenshot courtesy of IHG Rewards)
Especially if you have the IHG One Rewards Premier Credit Card and use its fourth night reward benefit by redeeming your points on stays of three nights or longer, you can still get a lot of value from your IHG Rewards points.
I recommend using today's news as a catalyst to redeem IHG Rewards points for upcoming stays when you can do so at a reasonable rate. It's also worth calculating your redemption rate each time before you redeem IHG points, as redemption rates vary greatly right now. The rate at which you should use cash instead of points will vary depending on many factors. But, based on TPG's valuations, it's typically not a good idea to redeem IHG points for less than 0.5 cents per point.
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
