This is the second in a series of posts on how to save money on hotel bookings by purchasing rewards points. For a more detailed explanation and walk-through of the theory, see the first post on Hyatt hotels.
The Nuts and Bolts
IHG Rewards Club is a slightly special snowflake since they offer two ways of buy points from them. Since there have been plenty of posts giving detailed explanations (see here for a good one), I won’t go into detail on how to purchase the points, other than to say that that the second method utilizes the points and cash option on bookings and IHG’s unique mechanism of refunding the total points cost if you cancel your booking. In practice, the purchase costs are:
- 1.35 cents per point through the normal purchase mechanism. The price decreases down to 1.15 cents per point as you buy more points. You can buy at most 60,000 per year.
- 0.7 cents per point if you have 5,000. You can buy an unlimited number, as per the reference above.
0.6 cents per point if you have 35,000.I’m just going to ignore this option because of the higher barrier to entry. If you’re booking long stays, it will come into play, but otherwise, it’s ranges from not applicable to only marginally beneficial.
For simplicity’s sake I’m going to assume the higher, direct purchase rate when computing cash costs, but note that you can save some money if you buy only enough points to reach the next rate threshold, with the remainder at the lowest rate available to you.
IHG’s rewards program splits their hotels into nine tiers, with redemption costs ranging from 10,000 points to 50,000 points per night.This means that the most you should ever pay for a night at an IHG hotel when there’s award availability is as follows (points purchase prices decrease to 1.25 cents per point at 11,000 and 1.15 cents per point at 26,000):
As was the case for Hyatt, we can do better with points and cash than pure points. Assuming we go for the cheapest option of paying $70 in place of 10,000 points (there is also an option where you pay $40 in place of 5,000 points), our maximum costs are as follows. Note that points and cash bookings are not available for Category 1 hotels (if you can even find them):
I’ll reiterate that you can do a lot better (and avoid the annual points purchase limit) than both of these tables by utilizing the hack to buy all your points at the cheapest (0.7 cent per point) rate, but I wanted to err on the side of simplicity so you could follow the math. But, for those who are curious, here’s the absolute best you can do:
Here, the number of points required is always 5,000 (the number required to buy points using the points and cash trick), and the co-pay is the cost of buying the remaining points at the 0.7 cent per point rate (* if you’re only buying 5,000 points, it costs 0.8 cents per point).
There’s a huge variation in the rates of IHG hotels, so often it is just better to pay cash (particularly for some of the higher category hotels which can often be had for less than $150). That said, looking at Auckland for a random date in February:
Both hotel options are cheaper via points purchasing than by cash alone! In order:
- Crowne Plaza: $290.95 for a NON-REFUNDABLE cash booking versus $207.50 for a refundable booking via our points purchasing hack.
- Holiday Inn: $237.50 for a cash booking versus $172.50 via points purchasing.
Again, IHG is much more hit-or-miss than Hyatt, but there is some good value to be had in popular cities or during high season.