What are IHG Rewards hotel points worth?

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This article is our attempt to decide what IHG Rewards points are worth.

Valuing miles and points is a thankless job. We have always published articles on what Avios points are worth, but that Avios article is so complex that it simply proves my point.

In the face of constant reader requests, however, I wrote this series of articles on how we value each of the major hotel points currencies.

Our other articles in this series are here:

The reason I have changed my mind after all these years is that I have found a methodology that works for me. It takes a subjective valuation and then explains the boundaries around it. Or, in plain English:

I will tell you (without justifying it) what I think an IHG Rewards point is worth

I will tell you, on the upside, how far wrong I can be (which is good news)

I will tell you, on the downside, how far wrong I can be (which is bad news)

I will tell you what IHG Rewards points are worth if you turn them into something else – usually airline miles – which effectively locks in a floor value

Why I think ‘range’ is important when valuing hotel points

When we look at using Avios for business or First Class flights, the ‘cash alternative’ is often a poor comparison. Most HfP readers don’t want to, or simply can’t afford to, pay cash for business or First Class flights. Their choice is Avios or nothing. Even if you can afford to pay, what are you comparing with? A cheap non-refundable sale flight? A pricier flexible ticket? The cost of an indirect flight, not on BA?

Hotels redemptions are different:

you stay in far more hotels each year compared to the number of premium cabin flights you take, so you can be selective about when you use points

you can usually afford to pay for a hotel if you choose not to use points

there are far more options in the hotel market than in the flight market – most people only have a lot of miles in one airline programme, whereas you are likely to hold hotel points in multiple schemes

It is easy to sit on hotel points until you get a good deal

The net result of the three facts above is that it is easy to turn down a hotel redemption when it doesn’t seem like good value. You can pay cash or redeem via another hotel scheme instead.

Here is the crux of what I am trying to say. If you compare two hotel schemes:

scheme A usually gets you 0.3p per point but if you are lucky you can get 1p

scheme B usually gets you 0.4p per point but if you are lucky you can get 0.6p

…. scheme A may actually be the best.

Most people who try to ‘value’ hotel points don’t take this into account.

If you redeemed points for every stay you did, regardless of the cash price, scheme B would be the best. No-one does this though. In reality you can pay cash for your stays in scheme A until the day when a bumper redemption arrives and you can get 1p.

Here’s a real example. I value Marriott Bonvoy points at 0.5p as this article explains. If you do 20 Marriott hotel stays and use Bonvoy points for all of them, I think you will average 0.5p, give or take.

However, in December 2020, I redeemed 400,000 points for two villas at The Ritz Carlton Al Wadi Desert in Ras Al-Khaimah. This would have cost £4,800 for cash, which I would have paid if necessary. I got 1.2p per point. It justified all of the Marriott stays where I paid cash rather than redeem for 0.5p per point.

What are IHG Rewards points worth?

With our methodology out of the way, let’s take a look at what IHG Rewards points are worth.

To keep things simple, we do not adjust for the fact that you would earn points back if you paid cash instead. This can have a noticeable impact when generous bonuses are running.

IHG Rewards has historically run more generous promotions than the other major chains, but this has not been true for the past 18 months.

The HfP average valuation of an IHG Rewards point:

0.4p

We are not justifying this valuation, except to say that I have looked at enough IHG Rewards redemptions over the years to be happy with it.

It is worth noting that – if you redeem for their Mr & Mrs Smith partner hotels – you will get exactly 0.4p per point. Ignore the examples in the linked article because there seems to have been a slight devaluation. Points rates at these properties are directly linked to cash rates.

How high can value go on the upside?

Not very high, which is not good.

If you can get 0.6p per point then take it.

Over the last year, IHG Rewards has been bringing in ‘revenue based redemptions’. In plain English, this means that the points required are linked to the cash price. It doesn’t seem to be ‘live’ in all cities yet, but it is getting there.

Hilton has a similar system, but Hilton was smarter. Hilton still has a ‘points price cap’ for each hotel, so you know that you will never pay more than 95,000 points per night at its top hotels, and proportionately less at mid-market ones.

IHG Rewards has no cap. This means that you are now seeing some stupid redemption rates, eg 65,000 points for a Holiday Inn Express in Canning Town, not exactly the smartest part of London:

When I started collecting IHG points, you could book ANY InterContinental hotel globally for a fixed 30,000 points per night. Other brands cost even less. Things have changed ….

You need to be clear that this is not premium ‘last room availability’ pricing. Hotels are still only obliged to make 5% of their rooms available for redemption. IHG is also still only paying hotels the usual peanuts figure for redemptions. On a recent stay at the Hotel Indigo Bath (reviewed here) I was given IHG’s receipt by mistake which showed they paid £32 for my room.

IHG is still finessing its revenue-based pricing. In these two articles, we show how pricing in London was very variable one day and then settled down a few days later.

Even at resorts where redemption based pricing is not yet in place, high flat pricing means that redemptions are not hugely generous. For the new InterContinental Maldives, for example, redemption nights next May (the first date with availability) are a fixed 120,000 points or $800. This is only 0.5p per point.

Realistically, the best value you can expect from IHG Rewards is now 0.6p per point. If you are booking a hotel where your points are worth 0.6p, take it and pocket the cash saving.

How low can value go on the downside?

Not very low, which is good.

One upside of the move to revenue-based redemption pricing is that you will rarely get a truly terrible deal.

My recent London analysis showed that 0.25p per IHG Rewards point is about as bad as it gets.

That said, 0.25p is still 35% worse than our benchmark of 0.4p per point, so you should absolutely avoid redeeming at this level if at all possible.

If IHG Rewards devalues hugely tomorrow, what is my escape route?

This is our floor price. What can you do with your points if IHG Rewards devalues massively overnight?

With IHG Rewards, the best value is to convert your points to airline miles or to gift cards. It doesn’t end well either way.

The conversion rate to Avios and other major airline currencies is 5:1.

If we assume an airline mile is worth 1p, then you are getting 0.2p per IHG Rewards point in the worse case scenario.

If you redeem IHG Rewards points for a UK High Street gift card it is even worse. The catalogue is here.

At the top end – it is worse for smaller balances – 15,500 points gets you a £25 voucher for a UK High Street store or restaurant chain. This is a shockingly poor 0.16p per IHG Rewards point.

By redeeming for gift cards, you are losing at least 50% of the value compared to an average hotel redemption, and well over 70% of the value compared to a ‘good’ hotel redemption.

In summary …. what do we think IHG Rewards points are worth?

on average: 0.4p per point

on a very good day: 0.6p per point with little ability to go beyond this

on a bad day: 0.25p per point

if you transfer out in a worse case scenario: 0.2p per point for airline miles or 0.16p per point for UK retailer gift cards

The lack of an upper pricing cap makes IHG Rewards less attractive than Hilton Honors, Marriott Bonvoy, World of Hyatt or Radisson Rewards. This is because it sharply reduces your ability to get outsize value. It is also hugely impacts your ability to redeem at uber-premium properties.

The bottom line is that there is no point saving up for a bumper redemption at a luxury resort, because revenue-based pricing makes those rewards no better value than your local Holiday Inn Express.

If you find that a certain hotel can get you 0.6p per point then you should pull the trigger, because you will struggle to do better. Any redemptions which gets you 0.4p to 0.5p should be seen as acceptable.

IHG Rewards update – December 2021:

Get bonus points: You can earn up to triple IHG Rewards base points with IHG’s new Autumn promotion. It runs from 1st October to 31st December. You can register here and our full article on the offer is here.

New to IHG Rewards? Read our overview of IHG Rewards here and our article on points expiry rules here. Our article on ‘What are IHG Rewards points worth?’ is here.

Buy points: If you need additional IHG Rewards points, you can buy them here.

You will get a 100% bonus when you buy IHG Rewards points by 4th January 2022. Click here to buy or learn more.

Want to earn more hotel points? Click here to see our complete list of promotions from IHG and the other major hotel chains or use the ‘Hotel Offers’ link in the menu bar at the top of the page.