IHG Reward rolled out dynamic award pricing in 2020 in several stages, first starting at select hotels in Asia before rolling it out globally.
The value of an award point had deen relatively stagnant under dynamic award pricing at roughly at 0.5 to 0.6 cents each. This all changed on April 1st when the lower end went to 0.34 to – 38, roughly devaluing points at many properties by 30%.
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READ MORE: IHG Rewards Rate & Bonus Points And Miles Promotions
Here’s a statement we received from the IHG spokesperson on Monday morning:
We rolled out our Dynamic Pricing models to our hotels around the world last year which enabled the amount of points required for IHG Rewards members to redeem a Reward Night to flex up and down, just like cash rates.
Previously, Reward Night point amounts were static throughout the year. This model allows point amounts to decrease when demand is lower, providing greater value to our members.
Conversely, redemption amounts may also increase based on demand and other factors and can update as often as daily. Reward Nights are not defined by categories or with minimum and maximum point amounts.
Under our new model, the number of points required for Reward Nights will vary with demand and seasonality.
Here’s what happened last week:
IHG Rewards Devalues Dynamic Award Pricing By 30%
Here’s what took place earlier:
IHG started to roll out this function back in April 2020:
And there was already one previous dynamic award massacre in June 2020:
There have been previous issues with Dynamic Award pricing:
Conclusion
Previously, under dynamic pricing, the value of a point was set at 0.5 to 0.6 cents each against the cash rates. Now it is all over the map, starting at just a third of a cent and can change daily and varies between properties.
This makes any planning practically impossible for those staying at IHG affiliated hotels and collect IHG Rewards points. When the underlying paid rate stays the same, the points ones can vary 100% between properties.
IHG has made millions yearly selling its IHG Rewards points to members. How can it make any sense to buy point event at their highest bonus (0.5 cents each) when the redemption value in most cases is 30% less?
