IHG’s Variable Point Pricing “Designed to Increase Member Engagement”

In it’s just released “Preliminary Results” report for 2018, IHG CEO Keith Barr revealed that the hospitality group is testing a “variable point pricing” scheme for IHG Rewards Club members. The new policy is set to launch worldwide beginning later this year. According to the company, the move is a means “to build stronger and deeper relationships with our guests.”

There may be big changes in store for IHG Rewards Club members starting this year. Company officials confirm that the hospitality giant will roll out a “variable point pricing” redemption scheme by the end of the calendar year. Details of the new policy have not yet been released, but the hotel conglomerate says the policy change is already being tested and will launch in the coming months.

In its 2018 Preliminary Results Report released on Tuesday, IHG says the move towards a more dynamic rewards redemption schedule is “designed to increase member engagement.” The variable point pricing feature is said to be just one among several next steps in an overall upgrade of the company’s guest reservation system (GRS).

“We have successfully implemented a more efficient and agile organizational structure whilst building resources and capabilities focused on the most attractive growth opportunities,” IHG CEO Keith Barr told stakeholders in the annual earnings report. “We also further strengthened our owner proposition and revenue delivery enterprise, with the successful global roll-out of IHG Concerto, featuring our innovative new Guest Reservation System. This gives IHG the most sophisticated, cloud-based platform in the industry, with further enhancements set to be deployed in 2019.”

Loyalty members are understandably leery when the word “enhancement” is bandied about by a hotel or airline executive. In this case, however, it appears IHG leadership might actually understand the importance of its loyalty program. The report notes that Rewards Club members are seven times more likely to book direct (saving the company substantial third party booking fees) and thereby deliver a 25 percent stay premium.

It is possible the upcoming redemption changes will allow members access to steep discounts on unsold rooms. IHG’s recent acquisitions of new luxury brands, including Six Senses Hotels Resorts Spas might have also necessitated the move to a more agile loyalty redemption system as well.

On the other hand, some of IHG’s already implemented Concerto “enhancements” haven’t exactly been loyalty member friendly. The hotel group describes the latest improvements to the reservation system as giving “guests the opportunity to customize their stay based on features they find important – made possible by new ways of classifying and selling room inventory.”

In practice, the new reservations feature simply monetizes previously complimentary considerations provided at properties. Guests are indeed now allowed to customize their stay, but only by paying a series of ancillary fees. Everything from requesting a room on a high floor to asking for accommodations away from the elevator or ice machine now comes with a conveniently predetermined price tag.

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[Image Source: Wikimedia/ missbossy]