In this post, I will describe how I recently "stacked" IHG benefits to earn about $350 in free hotels nights while only spending about $240...making a stay in Hong Kong better than free.
First, a little background. If you're familiar with how point values and stackable promotions work, skip ahead to the section titled "My Better Than Free Promotional Offer".
HOW POINTS ARE VALUED ¹
While hotel rates vary depending on demand, with higher prices during popular times (e.g. summer and the holidays) and lower rates during the non-peak days or times of year, the number of points required for a free night is usually set at the same rate regardless of the time of year.
Thus, point value is tied to average hotel rates. When someone says that IHG Rewards points are worth about 7/10ths of a cent ($0.007) each, what they mean is that the company typically charges 15,000 points per night for rooms at properties where the average nightly rate is about $105 (15,000 x 0.007), and the more expensive properties priced at 35,000 per night have an average nightly rate of about $245 (35,000 x 0.007). It's not an exact science, but the number of points required for a free night reflect average cash rates.
USING POINT VALUE TO MAKE GOOD DECISIONS
When a person knows the average value of a rewards system's points, they have a way to determine what makes for a good points deal versus a bad one.
Continuing the previous example, if a person finds a 15,000 per night room that is available on a given weekend for $80 per night after tax, that's a "bad" redemption, since the points would be redeemed for less than their average value (only 0.53¢ per point versus 0.7¢ each). Similarly, if that same room cost $200 per night over a popular holiday weekend like New Year's Eve, a rewards redemption of 15,000 points per night might be a great deal, since the value received--1.3¢ per point--would be almost twice the average point value...it's like paying $105 per night for a $200/night room.
As long as someone doesn't forget that we still use cash to buy things², the take-away is pretty simple: if a person knows what points are worth, they can use a tiny bit of math to quickly identify great deals...and avoid bad ones.
MULTIPLYING VALUE THROUGH PROMOTIONS
Normally, the thought process for earning rewards points sounds something like this:
"By staying at this property, I will earn 10 points per dollar spent. Since the points are worth 0.7¢ cents each, I will earn 7% of my spending back in the form of points that can be used toward future travel."However, a promotion can turbo-boost these earnings. For example, a hotel-branded credit card might offer additional points per dollar spent, and if one has status with the hotel, they might earn an additional percentage of the "base" points issued.
Thus, a credit card holder with status might be able to collect far more points for each dollar they spend by "stacking" the following promotions:
- base points per dollar for the stay
- bonus points per dollar for having elite status
- additional points per dollar by charging the stay to the hotel-banded credit card
Needless to say, it makes sense to maximize return on investment (ROI). If a person could obtain 100% ROI, they would earn a dollar's worth of free hotel stays for each dollar they spent. But how could that kind of high earning be possible?
MY BETTER THAN FREE PROMOTIONAL OFFER
IHG has a periodic promotion aptly named "Accelerate", in which a Rewards Club member can earn additional points during their stays if they complete certain goals.
Like any promotion, it's an incentive for members to choose IHG properties over the competition. Sometimes the offers are great, sometimes they're just OK, but they're always designed to make a person think twice about which hotel chain they book for a stay.
Accelerate promotions can vary from one member to another, but they always take the following form: "complete the following incentives for points, and if you do enough of them, we'll give you even more points."
My offer included the following...
In total, these promotions add up to 55,000 points. At a value of 0.7¢ per point, that's up to $388.50 toward free hotel stays. If a person booked 5 nights at an average price of $140 per night after tax, those points would represent a 55.5% return on the $700 spent...a very good ROI.
Like any promotion, it's an incentive for members to choose IHG properties over the competition. Sometimes the offers are great, sometimes they're just OK, but they're always designed to make a person think twice about which hotel chain they book for a stay.
Accelerate promotions can vary from one member to another, but they always take the following form: "complete the following incentives for points, and if you do enough of them, we'll give you even more points."
My offer included the following...
- Stay once: 3,000 points
- Stay a total of 5 nights: 10,000 points
- Stay over a weekend: 6,000 points
- Stay in Europe, Asia, Middle East, or Africa: 18,000 points
- Charge a stay to IHG credit card: 1,500 points
- Redeem any number of points: 1,000 points
- Complete 5 of the 6 offers: 15,000 points
- Stay in March (the first month of the promo): 1,000 points
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| My Accelerate 2017 dashboard. |
MAKING A GOOD DEAL GREAT
Keep in mind that these promotions are "stackable". That means that a single night's stay can satisfy the criteria for several offers. In my case, a weekend stay in one those destinations paid for with my IHG credit card would fulfill all but two of the incentives, and I fulfilled an additional incentive with a cheap points redemption.
As luck would have it, I already had a 3-night trip to Asia planned (a $420 round-trip to Hong Kong thanks to a travel alert on TheFlightDeal). My IHG credit card ($49 annual fee) provides a free night in any of their properties, so I planned to redeem this benefit at the 5-star InterContinental Hong Kong, one of the brand's best properties (and an outstanding free-night redemption value considering that a room with a harbor view is about $300 per night.)
That left me with a decision of where to spend my remaining two nights. With the Accelerate promotion in mind, I selected the Holiday Inn Express Hong Kong SoHo for its combination of location and price, paying $133 plus tax per night to be in a great neighborhood just 2 blocks from metro and tram access to the city.
Additionally, I chose to book the reservation through a link on Ebates, where a limited-time, double-bonus promotion offered 9% cash back.
THE BOTTOM LINE
In total, I received $356.73 worth of points for $242.42 in spending... a net gain of over $114, and an ROI of 147%! Here's a financial breakdown of how I managed to do it:
Needless to say, I'm a big fan of IHG Rewards Club. While I can occasionally stack Hilton's points, credit card earnings, elite status bonuses, and promotions to earn an excellent ROI in excess of 30%, examples like the one above mean that IHG is hard to beat in terms of the amount of the spending necessary to earn enough points for free nights.
NOTES & FURTHER READING...
If this has piqued your interest in comparing hotel rewards programs, you may want to look at the following resources by my favorite travel blogger, Drew at TravelIsFree:
As luck would have it, I already had a 3-night trip to Asia planned (a $420 round-trip to Hong Kong thanks to a travel alert on TheFlightDeal). My IHG credit card ($49 annual fee) provides a free night in any of their properties, so I planned to redeem this benefit at the 5-star InterContinental Hong Kong, one of the brand's best properties (and an outstanding free-night redemption value considering that a room with a harbor view is about $300 per night.)
That left me with a decision of where to spend my remaining two nights. With the Accelerate promotion in mind, I selected the Holiday Inn Express Hong Kong SoHo for its combination of location and price, paying $133 plus tax per night to be in a great neighborhood just 2 blocks from metro and tram access to the city.
Additionally, I chose to book the reservation through a link on Ebates, where a limited-time, double-bonus promotion offered 9% cash back.
THE BOTTOM LINE
In total, I received $356.73 worth of points for $242.42 in spending... a net gain of over $114, and an ROI of 147%! Here's a financial breakdown of how I managed to do it:
Needless to say, I'm a big fan of IHG Rewards Club. While I can occasionally stack Hilton's points, credit card earnings, elite status bonuses, and promotions to earn an excellent ROI in excess of 30%, examples like the one above mean that IHG is hard to beat in terms of the amount of the spending necessary to earn enough points for free nights.
NOTES & FURTHER READING...
If this has piqued your interest in comparing hotel rewards programs, you may want to look at the following resources by my favorite travel blogger, Drew at TravelIsFree:
- Infographic: The Best Hotel Rewards Programs
- The Complete Guide to IHG Rewards (written in 2014, but still a great primer on the program)
Note 1: For those interested in determining point value, ThePointsGuy offers monthly valuations for many travel rewards programs. While I don't agree with all of his valuations completely (particularly for Chase Ultimate Rewards, which I value no higher than the Hyatt valuation), I've found most of them to be pretty accurate.
For a more nuanced look at values depending on variables like hotel category, points + cash redemptions, etc., check out ValuePenguin. The article organization there leaves something to be desired, so the best way to find an article is to Google "ValuePenguin value [name of hotel, airline, or points program]" to find results like this one for Marriott.
Note 2: It is important not to rule out alternatives when determining point value. If the $200/night hotel room available for 15,000 points is across the street from a competing hotel where a similar room can be booked for $120 per night cash, it is dishonest to claim that one is "saving" $95 per night by redeeming their points at the first property...the truth of the matter is that the next best alternative is only $15 per night more expensive than the value of the points (15,000 pts x $0.007 = $105, which is $15 less than the $120/night property.)
This is where some travel bloggers get carried away, placing undue attention on high redemption calculations when the reality is that most people wouldn't actually pay that higher price if they had to use cash to determine which hotel they are willing to pay for.
Note 3: For no-fee card lovers, Hilton's American Experss card offers a respectable ROI. Hilton's base earnings are 10 per dollar spent, the card offers 15% bonus the base points earned (Silver status comes with the card), and one earns 7 points per dollar spent when charging the stay to the card. With an average value of 0.5¢ per point, the ROI is approximately 9.25%.Happy deal-hunting!
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