The new year brings new loyalty program devaluations, with the latest being IHG, followed by… IHG. I think Hiltonization is an apt description, as it seems the goal is to create a reward currency with a more or less consistent value regardless of where it’s redeemed. Obviously, that’s bad news for value maximizers like us, though it’s probably good news for the accounting and finance teams at IHG.
I was curious about just how many devaluations there have been over the years, so I did a little digging:
- 2017: Similar proportions to this year, with another 500 hotels seeing an increase.
- 2016: Surprisingly, this one was split 50/50… but they added the 55K and 60K tiers.
- 2015: Apparently this was a sneaky devaluation: 300 went up, 150 went down.
- 2014: 100 went down and none (!) went up! Although that may be because…
- 2013: IHG (formerly known as Priority Club) introduced its nine new categories (10K to 50K points per night). Previously the award cost depended on the brand. Which brings us to…
- 2012: Each brand added new (higher) pricing tiers, and Intercontinental added a 50K tier, which seemed like a lot at the time.
- 2011: Apparently there was a stealth devaluation.
That’s all I could find. But here’s something interesting: Pointbreaks have been around at least since 2008, and they have been a consistent 5,000 points per night during that time. That’s almost 10 years! They may even go back farther than that for all I know. Everybody knows that Pointbreaks aren’t as good as they used to be, and that’s been the case for years now. But it’s interesting that Pointsbreaks remained steady for a decade despite yearly devaluations. In fact, given that IHG hadn’t changed the price of Pointbreaks, they had to devalue the quality of the available hotels. And that, boys and girls, is why Pointbreaks aren’t as good as they used to be.
(Note: I started this post in early January, but then went on vacation shortly thereafter and forgot about it. These are my actual words from before the changes: “Fiddling with Pointbreaks seems like an overdue idea for IHG. In fact, I’m going to make that a prediction for 2018: IHG will make one or more substantial changes to Pointbreaks. They’ll raise the cost from 5K to 10K or they’ll add new tiers or something like that. They’ll market it as a way to increase the quality and variety of hotels, and in fact it actually would do that, but it will ultimately make the awesome 5K deals far and few between.” That prediction would have been ridiculously timely had I actually finished my post. Lesson learned: don’t procrastinate.)
Something else has remained steady for a long time: the fact that IHG cardholders get a “free” night with their credit card good for any hotel. Now, they don’t necessarily make a lot of inventory available for this “free” night, but in theory it’s good anywhere and in practice it is indeed not too difficult to get good value for your $49/night annual fee… and that makes me think that this free night benefit is going to be devalued sooner rather than later. Either they’ll put a category cap on it, as with Marriott and Hyatt, or they’ll raise the annual fee. Or heck, maybe both.
The IHG credit card sometimes offers an 80,000-point bonus (and has even had a targeted 100,000-point bonus), and this card does not appear on Chase’s feared 5/24 list. Which means that, in theory, it’s churnable. The free night doesn’t kick in until your second year, but since Chase limits you to one bonus every two years you could get the bonus, use the free night in year 2, cancel the card, and repeat. The question is, would you want to?
On the one hand you’ll get 80,000 points, which are good for one luxury night with a few points left over, but then you also have a minimum spend, an extra credit pull and new account, and the possibility of Chase adding the card to the 5/24 list during a time when you don’t have it. Obviously the 80,000 points can get you more than one night if you set your sights lower but while some gems remain even some of the mid- to lower-tier IHG hotels are getting expensive, points-wise. So I personally don’t think churning it is worth the trouble, but that’s just me. As always, YMMV, especially if they start messing with the annual fee and/or free night benefit.