Do Hotels Care if you are Staying on Points?
Jul 3, 2019, 10:46 am
#16
Join Date: Oct 2011
Programs: Priority Club Platinum Ambassador, Club Carlson Gold
Posts: 264
IHG properties get between 10-50 $ for award night, but most get around 20. Some hotels in China may get even less then 10 usd.
Now if the hotel is full more then 95 % it will receive the rack for the day in question.
Some IHG properties may release more award rooms if they a close to 95 % occupancy rate, because then the property get the same money from cash stays and award stays.
Keep is mind that IHG have rules that any hotel have to release min. % of all the rooms for award ( i think is somewhere at 5% of the total rooms ), but they dont have upper limit.
Also the hotel allocate the award inventory not the IHG.
Now if the hotel is full more then 95 % it will receive the rack for the day in question.
Some IHG properties may release more award rooms if they a close to 95 % occupancy rate, because then the property get the same money from cash stays and award stays.
Keep is mind that IHG have rules that any hotel have to release min. % of all the rooms for award ( i think is somewhere at 5% of the total rooms ), but they dont have upper limit.
Also the hotel allocate the award inventory not the IHG.
Jul 5, 2019, 4:38 pm
#17
Join Date: Nov 2006
Location: MSP
Programs: DL Gold, DL MM 8/22/16!
Posts: 2,563
I've stayed in IHG hotels using points a number of times over the past 15 years. Different countries and different cities within them. I've always been treated very kindly and graciously. Absolutely no sense of different treatment from regular $$ stays.
Jul 6, 2019, 6:55 am
#18
FlyerTalk Evangelist
Join Date: May 1998
Location: Massachusetts, USA; AA Plat, DL GM and Flying Colonel; Bonvoy Platinum
Posts: 24,233
Even if a hotel doesn't get a lot of money when you stay on an award:
1. In all likelihood, your room would have been empty otherwise. What they get covers the cost of someone using it for a night.
2. People who have enough points for an award stay are, also in all likelihood, pretty good customers of the hotel chain even if not of that specific property. Yes, you can earn points via credit cards and such - I do - but anyone who's motivated to get a particular chain's credit card probably stays with them a good deal in the first place.
1. In all likelihood, your room would have been empty otherwise. What they get covers the cost of someone using it for a night.
2. People who have enough points for an award stay are, also in all likelihood, pretty good customers of the hotel chain even if not of that specific property. Yes, you can earn points via credit cards and such - I do - but anyone who's motivated to get a particular chain's credit card probably stays with them a good deal in the first place.
Jul 7, 2019, 7:09 am
#19
Join Date: Feb 2016
Location: Loveland, CO
Programs: MileagePlus Lifetime Gold, Hilton Diamond, Bonvoy Gold, IHG Platinum
Posts: 153
From my background as a cost accountant it's a matter of fixed and variable costs.
If a room remains vacant overnight, the hotel still incurs the fixed costs (primarily depreciation and it's prorated share of all common area expenses). Getting some extra revenue for such otherwise vacant rooms with rates that will at least cover all the variable costs (e.g., booking costs, room cleaning, utilities, etc.) and a bit more to cover some of the fixed costs, will allow the hotel to be better off (i.e., more profitable) than if the room were to remain vacant.
To put it another way, the hotel's ownership/management always wants to maximize TOTAL profits while maintaining their preferred quality standards. The mix of rates, paid and award nights will always matter in the process, but so will the ability to add incrementally to the total profit.
I could add a lecture on "break even analysis" bit I won't bore you further.
If a room remains vacant overnight, the hotel still incurs the fixed costs (primarily depreciation and it's prorated share of all common area expenses). Getting some extra revenue for such otherwise vacant rooms with rates that will at least cover all the variable costs (e.g., booking costs, room cleaning, utilities, etc.) and a bit more to cover some of the fixed costs, will allow the hotel to be better off (i.e., more profitable) than if the room were to remain vacant.
To put it another way, the hotel's ownership/management always wants to maximize TOTAL profits while maintaining their preferred quality standards. The mix of rates, paid and award nights will always matter in the process, but so will the ability to add incrementally to the total profit.
I could add a lecture on "break even analysis" bit I won't bore you further.