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I’ve been trying to understand how the new IHG Rewards ‘dynamic’ points pricing actually works for a while now.
I should have some more information to share on that quite soon, but in the meantime, one very important thing to understand is that although the pricing algorithm is mysterious, that doesn’t mean that it always works out as bad value.
In fact, some of the redemption values you can now get are extremely generous. So good, in fact, that even buying points in the current 100% bonus sale could save you a lot of money.
How buying IHG Rewards Points could save you money
I was looking at hotel options for a 4-night stay near Kenilworth recently and saw that there is a Holiday Inn right in the centre. Cash rates looked ok, averaging at about £80 per night:
I checked the points pricing and was very pleasantly surprised to see it was just 13,000 points per night:
That works out at a redemption value of 0.615p per point, which is excellent.
Right now, you can buy IHG Points for 0.35p (0.5 cents) each (when you purchase at least 52,000, including the bonus):
I could therefore buy enough points for my 4-night stay for ~£182 ($260) in total, rather than ~£320 if I paid the cash rate.
Per night that would mean paying ~£45.50, rather than £80 – a saving of roughly 43%!
Obviously this is just one example, but I’ve seen plenty of similar ones over the last month or so. I have also seen lots of examples of terrible value, so you have to do your sums carefully each time.
My main issue with the new IHG Rewards pricing is that it makes predicting how many points you will need for any given stay basically impossible. To make the most of it, you therefore need to adopt a different strategy.
For me personally, that means never redeeming IHG Points for less than 0.4p of value each (as you can always get that via Mr & Mrs Smith Hotels), and being on the lookout for opportunities where much greater value can be generated.
The lack of transparency with the new system has upset a lot of members, but it is still very much worth a quick look at the points rates to see if you can save some significant money.