IHG Confirms Variable Pricing with No Additional Details
IHG released information this week containing some performance data from 2018 and a list of the companies strategic initiatives going forward. One of the stated initiatives is to:
“Strengthen loyalty programme – Continuing to innovate IHG Rewards Club to build stronger and deeper relationships with our guests to drive high value revenue…”
- Testing new features for 2019 roll-out, designed to increase member engagement with variable point pricing.
Loyalty Lobby reported that they’ve asked IHG for clarification and received the following response:
As part of a continued effort to enrich the value proposition for our IHG Rewards Club members, we’ll be introducing variable pricing on reward night redemptions. We’re testing new features for a planned roll-out this year, and will be sharing additional details as they are available.
What Exactly Does This Mean?
Because the details of IHG’s variable point pricing are unclear and no concrete details have been offered we can really only guess at what this will mean for rewards redemptions in the future. Variable pricing could mean a number of different things but below are a few plausible possibilities, in my opinion.
- Dynamic Award Pricing. Basically meaning the price of the award in points is based on the price of the same night in cash.
- Variable Cash and Points Pricing: Think the Hyatt cash and points rate changes that went into effect this year.
- Hilton Like system: Basically fixed rates with variable point pricing based on factors such as timing, availability and location.
Thoughts
It’s really hard to say whether this is a good or bad thing, it’s more likely going to have mixed results on the value of redeemed points. I’ve noticed IHG in particular has some properties that are much more expensive in terms of points than they are in cash, so variable pricing could help to solve that issue.
HT: Doctor of Credit
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Probably many people don’t remember this because i think it was at least a decade ago, but some program had just devalued and ihg ran some promo highlighting how it was not devaluing because it wouldn’t do something like that to consumers. Man those days are long gone. I actually think the ihg devaluations have been worse than any other program.
And their 12-month expiration policy is also nuts. A relative had maybe 15k points expire (not a huge deal), got no emails about it, and ihg refused to restore the points even after phone escalations and trying their social media folks.
I think it’s just a pretty useless, non consumer friendly program these days. Can’t imagine the long term effect of losing customers to this bs outweighs the value of charging more points for rooms but perhaps their expensive consultants have calculated otherwise. I for one have stopped patronizing their properties (which are mediocre at best anyways) though I do need to spend down the points i already had accumulated back when it actually made sense to give your loyalty to this chain.
This sort of “enhancement” is almost never a positive. IHG is already a borderline useless UR partner given their lame 1:1 transfer/earning(except at IHG properties) ratios. And their desirable hotels can cost upwards of 60,000 points now. And this new scheme will most certainly mean 70 or 80K point properties are on the way. Venetian/Palazzo on weekends anybody?
Meanwhile Hyatt is now “only” 40,000 for arguably far nicer, albeit fewer, properties.
Bottom line: Variable pricing is not introduced to help customers. It’s recommended by “consultants” to squeeze revenue. Period.