Chase and IHG Announce New Co-Branded Credit Card Agreement
InterContinental Hotels Group PLC (IHG) and JPMorgan Chase Bank, N.A. (Chase) announced this week a new long term agreement to continue providing co-branded IHG One Rewards credit cards in the US. The agreement is in effect immediately and will have an initial term running through to 2036.
Co-brand credit cards are a valuable source of income for loyalty programs, and IHG seems set to earn much more from its Chase partnership going forward.
This growth will be driven by IHG’s commitment to expand the overall US co‑brand credit card business, and the number and usage of card accounts. This will also be supported by the growth of IHG One Rewards membership and loyalty penetration, together with the ongoing expansion of IHG’s hotel portfolio.
IHG says that it made a profit of $39 million in 2023 from its credit card business, with these expected to be double that level in 2025 and to more than triple by 2028. The company also expects continued growth anticipated in the years beyond.
As part of the new agreements, upfront cash inflows totaling $137m, pre-tax, are expected to be received over the coming months as part of IHG’s cash flow.
The IHG One Rewards program has also seen growth over the last few years, following its revamp. It is on track to have approximately 145 million members globally by the end of the year, with enrollments to date in 2024 having grown by more than 10% year-on-year.
IHG says that loyalty members typically spend approximately 20% more in IHG hotels than non‑members and are around ten times more likely to book through IHG direct channels. In the first half of 2024, Reward Night redemptions grew by around 15% year‑on-year, demonstrating strong member engagement and driving increased returns for our hotel owners. Loyalty penetration has also significantly increased, with members now responsible for over 60% of room nights globally in 2024 and approaching 70% in the Americas.
Additionally, IHG One Rewards co-brand credit card holders stay even more frequently and spend more in IHG hotels.
Here’s what Elie Maalouf, Chief Executive Officer, IHG Hotels & Resorts, said about the new deal
“We are delighted to continue our partnerships to provide co-brand credit cards in the US. Following a detailed review of the opportunities to grow this important ancillary fee stream, the new agreements will create more opportunities for customers to engage with IHG and our award-winning loyalty programme, further strengthen IHG’s enterprise and the System Fund for the benefit of our hotel owners, and will drive significant shareholder value. We look forward to continuing a close working relationship with our partners to mutually benefit from the growth of the co-brand programme in the US, and we continue to assess the potential for co-brand credit cards in other markets.”
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