BrightlyBob

Although not strictly relevant to our side of the points equation there have been many posts over the years speculating in the amount hotels receive on our redemption booking. So far this has mainly been speculation. No more!

If you go to your account on IHG.com and click on any of your redemption stays that comes up with the hotel, date and points awarded. Click on "earning details" and that breaks down where the points came from, the top entry is room and that amount is the sum billed by the hotel to IHG.

So on a recent redemption run I redeemed as follows (all USD):

Oakville, ON* Holiday Inn... 15,000 points on a $100 room, IHG paid the hotel $19.56 per night.

Selinsgrove, PA Holiday Inn Express... 20,000 points on a $100 room, IHG paid the hotel $25 per night

Montreal, QC* Holiday Inn... 25,000 points on a $150 room, IHG paid the hotel $19.22 per night.

Washington DC Holiday Inn... 35,000 points on a $200 room, IHG paid the hotel $50 per night.

*These were both $25CAD per night, the USD difference was due to exchange rate movements

As a matter of interest this was a family roadtrip on points and I redeemed a total of 525,000 points saving $4,000 on room rates had I paid myself. IHG however paid the hotels a total of $776...

synergistic

Are you certain this is the amount IHG paid, and not some odd estimate of what taxes would be? I'm somewhat surprised the amount paid doesn't correlate to either points redeemed or room rate. I'm not at all confident in any direction, just wondering if there is some notation that makes it clear that figure is IHG's compensation to the hotel.

BrightlyBob

I did check this against my paid stays and the room amount was the cost I'd paid before tax so I'm sure these figures are right.

It's pretty well known that franchisees are paid a small sum on award redemptions that aren't linked to retail prices. In the event a property is close to capacity however the sum paid by IHG is linked to the average room rate. In my case none of the hotels I visited were at capacity.

BorussiaMG

New York City, IC Times Square

50,000 points on a $705 ($612 room rate and $93 taxes), IHG paid the hotel $175 per night ($150 room rate and $25 taxes)

Land-of-Miles

The amount paid by IHG and other programmes depends very much upon property occupancy. When properties are approaching full occupancy the amount the property is paid for redemption stays is much closer to the commercial rate. This often results in reward rooms becoming available when paid night prices are rising in cost.

Since the amount the property is paid is dynamic even if what is seen when checking the booking is accurate at the time, the amount the property will be paid will depend upon occupancy on the relevant nights.

The basic principle here is that if the property isn't even 80% full then it would have had free rooms anyway and the amount IHG pays is meant to cover more marginal costs (like laundry, room cleaning and consumables). If the property is approaching full occupancy then they will get paid a similar rate to what they would see after a good corporate discount., to offset a real loss of room revenue. This seems to me to be a perfectly reasonable approach. A property doesn't lose $700 on a $700 a night room if it is only half full.

synergistic

I knew they usually only receive a pittance, but had been under the impression there were basically two compensation amounts - one for when the hotel is mostly full, and one (*much* smaller) for when there is plenty of space available. I know at most chains the "full house" compensation is based on retail rates, but had thought the other was based on the category / number of points, or perhaps a very small percentage of average room rate.

Your figures are interesting to see because it's clear that the number of points isn't how the compensation is determined, or that it's at least not the only variable. It makes me wonder if there's perhaps an equation that pays a bit more as occupancy increases even well before approaching full.

olegator

Topic discussed and explained couple of times. No need to guess I think.
(Just cannot find the right topic trough search)

scubaccr

No direct correlation to the nn'K points needed per night as examples recently in UK. June-step 2015 from my stays
Hotels by brand fall into one of 3x bands for IHG compensation based on the Hotels Average Daily Rate the last financial year.
Can't go just by brands as an HIE in London is much costlier per night £££ or Points, than any brand in middle if nowhere, so overlap of remuneration per brand occurs but expect the three IC brand bands to be higher than the 3x HIE bands

eg
HI LHR T5 (15k and also 5k PB ) room selling at £99-119 hotel bills IHG approx £15
HI Stratford on Avon (25k) room selling at £190 hotel bills IHG approx £15
HI CORBY (10k) room selling £64-76 range , hotel bills IHG approx £15

Note
I believe no HIE or HI receives more than $70/night unless over 95% occupied to kick in the average room rate payment by IHG
This is why IHG provide Points +Cash option , not only do they wip off points from the balance sheet, but in majority of cases us IHGers give IHG $70 and IHG only pass on part of it
(Obviously for ICs the $70. Is not enough but for the lower rated ICs at 25k it provably is there a outs)

CalItalian

IHG does not reimburse the property for taxes regardless if it listed. I've asked this to a number of managers at different properties and they've all told me the same.

BorussiaMG

I didn't know that. Thanks for clarification and sorry for confusion.

chrism20

Your figures are pretty consistent with what I have seen.

A few weeks ago HIX Preston South billed IHG £61 for the four nights I stayed there. It was actually on my bill at checkout and I had to ask for it to be removed. It's not the first time that has happened and the amount is usually between £15 and £20 per night unless the hotel is rammed.

I did comment on another thread on the day I had checked out that I felt like I had committed robbery when I saw how little they were getting.

gpicur

This is an extraordinary value and an example of great point management !

Well Done !

sdsearch

Is it always? I stayed on a Chase award cert one weekend night this summer at the Staybridge Times Square, and for that it says:
but the next night I says on 35k points around the corner at the Holiday Inn Express Times Square, and for that it says:
So, in the second case, isn't the "Other Non-Qualifying Spending" field, rather than the "Room" field, what's showing what IHG paid the hotel? Or did IHG really pay the hotel absolutely nothing?

I presume they were highly booked in both cases. The whole reason I moved hotels around the corner was because the Staybridge was already not available a couple months out for the next night. And these seem pretty close to the room rates that I remember being displayed when I was booking.

BrightlyBob

Well, sdsearch the answer to that is I don't really know.

All of my last 6 months room bills were shown in the room column and I noticed on all my reward stays, a total of over 40 room nights over the last 6 months that the room column still had a figure, but non qualifying for points. My conclusion is that figure must be the sum billed by the hotel to IHG.

Franchisees can be inconsistent in the way they deal with matters, and I'd guess you found an inconsistency at the Times Sq HIX, placing the redemption room reclaim into other non-qualifying spending.

Interesting figures though in comparison to the pittance paid to the hotels on my redemptions...

:D!

I recently had an award stay in Berlin and was charged €3 tax by the hotel. The city tax is 5%, indicating that the room was "worth" €60.

However, in my IHG account the amount listed is €115.16. (Not complaining as "saved" some tax)