IHG rumored to get variable award pricing!!!

Old Feb 21, 2019, 6:49 am
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IHG rumored to get variable award pricing!!!

One of the German bloggers is reporting that in the recently released 2018 IHG financial results there is the following wording....“Testing new features for 2019 roll-out, designed to increase member engagement with variable point pricing.” Can they really F this program up any more? Evidently...yes!

https://youhavebeenupgraded.boarding...599.1532984164
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Old Feb 21, 2019, 12:32 pm
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VftW blog has picked up on this as well, for those who prefer to read in English.

https://viewfromthewing.boardingarea...ption-pricing/
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Old Feb 21, 2019, 12:49 pm
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I do find it kind of odd that Hotels have instituted loyalty programs that pit two currencies against each other for the best "price". I don't believe points were ever intended to offer "exchange discounts," but to allow people to redeem for their loyalty. Now, it's more of what people have come to expect, and demand. This could be either good or bad. Knowing how these things generally go, I would expect more bad. This kind of stuff has all but killed Hilton rewards for me.

It could make me rethink my loyalty. Not out of spite, like many will do, but for what gives me a good return. I seem to be one of the few, at least on the internet, that sees the enormous value of IHG rewards. Points are numerous, and I can regularly get .5-1 cent for them. With variable pricing, that could go away though.

Let's not be deceptive news here though. Let's show the whole excerpt:

Strengthen loyalty programme – Continuing to innovate IHG Rewards Club to build stronger and deeper relationships with our guests to drive high value revenue across our hotel estate
  • Loyalty room revenue contribution up 4%pts in 4 years to 43%, including ~50% in the Americas.
  • Loyalty members 7x more likely to book direct, and deliver a 25% stay premium.
  • Testing new features for 2019 roll-out, designed to increase member engagement with variable point pricing.
Now yes, I understand what "strengthen loyalty programs" generally means to the public. Telling it to investors, and saying it has brought a strong return, I'm not completely convinced they are lighting the program on fire just yet. More likely to spend more on room and book direct (avoid OTA commissions) are hugely important, especially if they have any hope of growing their luxury segment.
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Old Feb 21, 2019, 1:01 pm
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I couldn't quote this part for some unknown reason from your post but the following sounds like Marketing Speak 1.0! It's just like when they devalue and call it an "enhancement." Sorry but maybe I'm a pessimist but the history with IHG has dictated that whenever they change something it is typically not in the best interest of the guest. The key words are "drive high value revenue."

Strengthen loyalty programme – Continuing to innovate IHG Rewards Club to build stronger and deeper relationships with our guests to drive high value revenue across our hotel estate
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Old Feb 21, 2019, 2:35 pm
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To be fair (and this was my story originally as YHBU credits) what IHG means is that Rewards Club members earn the hotel 25% more than a room sold via Expedia. This is the 22%-ish commission plus members booking better rooms. Whether this 25% figure nets off the cost of the points for Rewards Club guests is not clear.
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Old Feb 21, 2019, 4:36 pm
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If they made it like the Melia programme, that could be a useful compromise and could make it potentially interesting for the future. If they wipe everything aspirational out then that will wipe out the value of my points by 40-50% in one go. It's strange that Accor have just decided to overhaul their programme, which currently has simply zero attractiveness.
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Old Feb 21, 2019, 9:20 pm
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I think this could go two ways:
Worst case scenario is that they'll handle it like Hilton and points, more or less, will be redeemed revenue-based at a (pretty much) fixed rate for the current hotel cash rates.
Best case, this could be an expansion of PointBreaks and hotels are offered at lower prices during low periods (when few people pay cash and nobody in their right mind would use points at current rates).
Given IHG's track record of previous changes, take your guess...
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Old Feb 22, 2019, 2:27 am
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Maybe you guys are thinking too much. Maybe it is a solution on current absurd Points + Cash option. Currently the P+C option can result in the cash part way more expensive than the actual room rate. My personal hope is that this absurd P+C will be opitmised so that people can use Points as cash rather than using cash to buy points.
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Old Feb 22, 2019, 3:03 am
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Let's face it those of us who have been through the repeated annual RA shenanigans can attest to the complete lack of logic and apparent shortfall of just average commercial marketing acumen at IHG.

Absolutely nothing would surprise me except for genuine sustained improvements and the good type of consistency in the programme.

I can totally see the logic in following the Hilton pattern of providing premium rooms valuing points on a revenue basis (and there is already a precedent for points value in the prepaid card redemption options). IHG do not claim to have no blackout dates and most properties appear to make the minimum amount of redemption rooms available until they approach the volume/value occupancy trigger points.

What happened at Hilton though was that properties went from having 50% of inventory as basic rooms (and thus guaranteed no blackout availability) to a wide array of minor sub categories that meant that only 5 rooms in the basement by the lifts and ice machine were classed as standard rooms, decimating available redemption inventory and devaluing the programme. Arguably IHG starts off from that point so it's difficult (though not impossible) to see how they could make things worse.

What worries me is that for many Rewards Club members the only benefit of the entire scheme is good value redemption, if IHG screw that up too then what is left? I thankfully have burned off over a million points in the last few months to cover self funded business stays, so am rather more sanguine about all this than I once would have been. It does suggest that it would be very foolish indeed to run large IHG points balances until there is greater clarity. Personally I tend to stick with IHG simply because of RA (which is becoming less valuable) but the addition of Kimpton IC may offset that if my first Kimpton stay since getting IC, is any guide.
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Old Feb 22, 2019, 6:12 am
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I rather suspect they will tend towards the revenue model. My only hope is they don't make it as horrible as the Accor one.
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Old Feb 22, 2019, 10:49 am
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I don't think we can really make sense of it all until we know what form this is going to take. There are a few different possibilities:

1: The Hilton model, where points are more or less capped at a value of $5/1,000 - in IHG's case, more likely $4/1,000. Bad news all round.

2. The Marriott peak/off-peak model. Good news (cautiously) for bottom-feeders, who travel out of season for leisure.

3. The worst of both worlds. Base rates as we have now, but big increases in required points during events and times of higher occupancy. Come to think of it, this basically is the Hilton model.

4. The Zimbabwe Dollar model. Massive points inflation. Members kept quiet by throwing ever more points onto the balance sheets in targeted promotions and "buy points" discounts. Hang on, they have been doing this for years.

5. Something genuinely new.

In conclusion, I am trying to stay positive about this, or at least neutral until the details come out. However, I can't help feeling that my decision to dump a few hundred thousand points and shift about 60% of my paid business away is looking more and more justified.
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Old Feb 22, 2019, 12:35 pm
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Originally Posted by The_Bouncer
I don't think we can really make sense of it all until we know what form this is going to take. There are a few different possibilities:

1: The Hilton model, where points are more or less capped at a value of $5/1,000 - in IHG's case, more likely $4/1,000. Bad news all round.

2. The Marriott peak/off-peak model. Good news (cautiously) for bottom-feeders, who travel out of season for leisure.

3. The worst of both worlds. Base rates as we have now, but big increases in required points during events and times of higher occupancy. Come to think of it, this basically is the Hilton model.

4. The Zimbabwe Dollar model. Massive points inflation. Members kept quiet by throwing ever more points onto the balance sheets in targeted promotions and "buy points" discounts. Hang on, they have been doing this for years.

5. Something genuinely new.

In conclusion, I am trying to stay positive about this, or at least neutral until the details come out. However, I can't help feeling that my decision to dump a few hundred thousand points and shift about 60% of my paid business away is looking more and more justified.
The comparison with other programmes misses one important point.

Other programmes give a combo of 2 significant benefits a) hard in-stay benefits for frequent guests and b) free nights.

With some notable exceptions, I.e. RA at IC and IC at Kimpton, IHG gives none of this. I personally value a) much more than b).

Unless a move to a revenue based model is also accompanied by more a) which Hilton, Marriott and even Accor have in common, then IHG Rewards (except for RA and IC), surely becomes the very worst frequent guest programme in the market? This is commercially suicidal if the frequent guest scheme is meant to promote increased affinity and revenue. Hotels.com becomes a much better deal with a guaranteed 10% reward on every stay.

Far from building a stronger and deeper relationship with loyalty scheme members the result will be fewer members with a weaker and shallower relationship. I do not expect anyone at IHG to see this though.
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Old Feb 22, 2019, 7:34 pm
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New year.
New way in which IHG rewards gets even worse.
Just when you think they can't sink any lower, IHG keeps surprising us.

Many can't (or refuse) to see the writing on the wall...but I for one am glad I bailed on this sinking ship at the end of 2018.
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Old Feb 22, 2019, 11:08 pm
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Originally Posted by est-gratuite
New year.
New way in which IHG rewards gets even worse.
Just when you think they can't sink any lower, IHG keeps surprising us.

Many can't (or refuse) to see the writing on the wall...but I for one am glad I bailed on this sinking ship at the end of 2018.
Same. Moved over to Hyatt and am loving it so far. Other than the smaller footprint, it has been better in every aspect.
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Old Feb 23, 2019, 5:03 pm
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Man I'm just imagining them hiring whatever consulting firm came up with tru or the one that said millennials prefer not having desks in rooms and then coming out with this huge ad campaign showing millennials texting and quoting them using slang saying how simple E-Z it is to just multiply the room rate by a number to figure out how much a room costs in points and make a big deal about how this will help them capture market share from millennials (it won't).
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