FlyerTalk Forums - View Single Post - Points and Cash buy 15k points for $90 is this new ?
Old Dec 30, 2015, 2:00 am
  #15  
chrism20
 
Join Date: Jan 2007
Location: Somewhere in Europe
Posts: 3,362
Originally Posted by scubaccr
I fail to see why 15k for $90 addition on award p+c would signal or lead to a points devaluation

Look at this from the ihg Award Night cost model, where ihg corporate eg 35k nights. ... either
I)write off 35k points from their liability colum and pay hotel somewhere between $30-90 dollars
II)write of 25k and receive $70 which on average more than covers amount ihg pay hotel
III)write of 20k and receive $90 which covers the large majority of hotel rates ihg then pay

So based on above I Instead see new p+c 15k option as IHG simply trying to remove more of redemption liability points without need for own $$$'s spending out to hotels.

Yes I know if hotels exceed 95% occupancy that amount due increases, as does the due amount if individual hotel sells/hits extra higher award sales total in a year
And that some Pricey IC's get $125 , and even up to $175, which I have seen for Park Lane, one of the pricier ICs though towards end of year so could have been the higher award rate as IC PL does sell extra award nights throughout the year

I don't see that many IC redemptions as percentage of the whole year being made by non-Ambassadors as most plats etc will hope as is usually the case, for ex-gratis upgrades on award nights by choosing non-ICs
I must admit I hadn't looked at it that way, but it does make sense especially if they can eradicate the expense as no doubt some people will pay the $90 for a night where IHG pay the property $20 so in theory over a longer period of time it could break even and make it cost neutral.

There is also the discount on the cash element still to come for elites as well. That was leaked on the app update a month or so ago and according to someone I spoke with at corporate it will be launched shortly.
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