Home Hotel Loyalty IHG Rewards Forget better benefits, IHG thinks customers want more ways to use their...

Forget better benefits, IHG thinks customers want more ways to use their points


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Accenture recently published a mini-interview with the CEO of IHG Hotels & Resorts, Keith Barr, and while most of the short video doesn’t directly relate to the miles and points world, a 40-second segment within it gives us a brief insight into what IHG thinks it needs to do to keep customers engaged with its loyalty program.

IHG Rewards is a bad loyalty program

I’ve said this many times before but it’s worth repeating. As a loyalty program, IHG Rewards is bad. Actually, that may be a bit unfair to some of the other bad programs out there. IHG Rewards is very bad.

A quick look at the IHG Rewards benefits chart shows that loyalty to the program isn’t particularly rewarding.

IHG Rewards Elite Benefits
IHG Rewards Elite Benefits – Click or tap to enlarge

Even if you reach the dizzying heights of “Spire Elite” status, you’re not entitled to a complimentary breakfast, and when you read the small print surrounding room upgrades, it becomes obvious that they’re far from guaranteed, they’re likely to be unimpressive, that suites aren’t part of the deal, and that hotels have so much leeway that it’s easy for them to deal with guests in whatever way they feel is appropriate (i.e. is best for the hotel and not necessarily the guest).

“Platinum Elite and Spire Elite Members will be offered a complimentary upgrade, as determined by the hotel, which might include rooms on higher floors, corner rooms, newly renovated rooms, or rooms with preferred views. The upgrade will be offered at time of check-in, subject to and based on availability, and will only apply to the Member’s personal guest room. The hotel is not required to upgrade Members to suites or specialty rooms.”

Marriott Bonvoy, Hilton Honors, and the World of Hyatt all have their weak points but they’re all considerably more rewarding than IHG Rewards.

Add to all of that the fact that IHG loves a no-notice devaluation and that its points depreciate significantly year on year, and you start to get the picture of a program that doesn’t appear to value loyalty or have much respect for its members (IHG’s history of failing to communicate with its Rewards members is legendary).

With all of that in mind, one would hope that IHG may be having some discussions in the background that relate to making its Rewards program a little more competitive with the likes of Hilton Honors and Marriott Bonvoy, and that it’s looking at ways to encourage more loyalty from its guests.

Well, if those discussions are happening they’re being kept very quiet because Accenture’s mini-interview with Keith Barr appears to show that IHG believes that its Reards program would best be improved by giving members more ways to use their points.

What Keith Barr had to say

In the q&a with Accenture, the CEO of IHG was asked the following question:

How is IHG rethinking loyalty coming out of the pandemic?”

This was the reply (I’ve done my best to reproduce what he said word for word so if some sentences don’t make a lot of sense, blame Keith Barr!):

“It’s about expanding your view of what a loyalty program can do. It’s about earning points to go redeem for hotel stays or for products but it’s also talking about what are the other things that customers want [as] experiences and so understanding how do you enhance your loyalty program experientially so on other stay occasions or other occasions, customers are staying in your ecosystem for a loyalty program and then being able to redeem those points maybe not for a stay in one of your hotels but for another experience or something that’s an adjacency too, and so effectively, you enhance your system of loyalty”

You can see the video below (2.43) and the comments reproduced above start at around 1.07.

Thoughts

IHG Rewards already allows members to redeem points for a variety of things other than hotel stays…

  • Ambassador Membership
  • Donations to charities
  • Shop items from IHG’s “catalog of brand name products, jewelry, electronics, or gift cards”
  • Shop digital rewards and subscriptions
  • Convert points to airline miles

…but with the possible exception of the Ambassador Membership option, all of the above offer terrible redemption rates (they often value IHG points at around 0.2 cents each).

A 15lb TRX Slam Ball should cost you no more than $44.95

Buying a 15lb TRX Slam Ball for 21,000 points would see you get ~0.2 cents of value out of each point used…which is terrible.

This makes it odd to hear the IHG CEO saying that he thinks that what will improve IHG Rewards going forward is for members to be given more ways in which to get poor value for money out of their Rewards points.

I’m assuming that the new ways of redeeming points that IHG Rewards is considering will involve the program partnering with “experience providers” (similar to how Hyatt partners with Lindblad Expeditions or how Marriott offers “Bonvoy Moments”) and possibly with other travel businesses like car rental companies, but if IHG thinks that this will drive more engagement and loyalty and if thinks that this will be seen as a genuine enhancement, it’s going to be very disappointed.

No one has ever said that they would book more nights with a hotel chain if only they could use their points to go watch an NFL game, a concert at the Garden, book a sunset sail, or use those points to rent a car.

Most people want to use their points to book free stays at hotels and resorts around the world and if those hotels and resorts can be towards the top end of the market, so much the better.

Does IHG really not get this?

If IHG genuinely wants to enhance the Rewards program and to get more people engaged (become more “loyal”), it needs to stop devaluing year after year, it needs to start communicating with its members effectively, and it needs to address the fact that in exchange for “loyalty” it offers considerably fewer benefits than any of its closest competitors.

This isn’t rocket science. People will soon start booking more stays with IHG, handing over more money, and being more engaged with the Rewards program if they can see that more stays will lead to:

  • Noticeably better treatment across all IHG brands
  • Benefits they truly value when they stay
  • More points that can be used to book free nights at reasonable redemption rates

Suddenly being able to use IHG Rewards points for anything other than good hotel stays isn’t going to enhance the Rewards program and isn’t going to move the loyalty needle one little bit, so I don’t understand what Keith Barr is trying to do.

Is he actually so clueless that he really doesn’t know what is needed to keep people engaged with IHG Rewards and to drive more loyalty to IHG? That seems unlikely as he’s clearly a very successful person, so what is he up to? What is IHG thinking?

Is this simply all about IHG trying to cash in on the less well-informed who will buy points at 0.5 cents each and end up redeeming them at a lower value than that? I hope not, but that’s what it sounds like.

Related Reading: IHG Rewards: How To Deal With The Problem Child Of Loyalty Programs

Bottom Line

In a mini-interview (q&a) published by Accenture, IHG CEO Keith Barr has suggested that if IHG offers its Rewards members more ways to use their points, that will be seen as an enhancement of the program and that this will lead to customers being more engaged with the IHG Rewards ecosystem and in turn, drive loyalty to the brand.

Apparently, the simple idea of driving more engagement and loyalty by making IHG Rewards at least as rewarding as the programs offered by its closest competitors hasn’t occurred to anyone at IHG.

I can’t say that I’m surprised, but I am a little disappointed.

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Regarding Comments

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6 COMMENTS

  1. I don’t quite share your hatred of IHG’s program. IHG has a totally different hotel portfolio than Hyatt, Marriott, or Hilton. It’s much more heavy on the middle of the market with bread-and-butter brands like Holiday Inn Express, Holiday Inn, and Candlewood.

    These midscale brands do not have the resources to do much recognition-wise. They don’t have the expertise to provide fancy-looking welcome presents. And the budget for a half bottle or champagne or whatever simply isn’t there. They often do not feature higher room categories in which they could upgrade, either.
    Lastly, those midscale brands are heavily used by business customers. And those often do not mind paying for breakfast as they can expense it. It would be pretty costly to give those customers breakfast for free as they don’t mind much paying for it (free breakfast would cannibalize a lot of revenue).

    In light of all that, it makes total sense IHG Rewards is more points-driven and the program of a chain further up in the market like Hyatt more recognition-driven.

    I also disagree with the devaluation bit. I usually get a value of 1 US-Cent per point out of IHG.

    Obviously, you shouldn’t look to redeem IHG points for aspirational properties. There is a lot of competition among IHG members for redeeming at those (as there exist for of them) so points prices tend to be high.

    Use IHG points for city-center as opposed to beach properties. Use them for your overnight layover hotel stays etc. You can get excellent value that way.

  2. Obviously he would like us to use IHG points for the redemptions that are most profitable for his company, but he can’t say this out loud. Everything else he said is just corporate mumbo-jumbo.

  3. I was a fan of IHG 10-15 years ago. Since then it has been a continuous game of How Low Can You Go. Business always want to increase margins, and it seems likely but sad they are doing so on the backs of the less informed. My loyalty is now centered on Hyatt , Wyndham + Vacasa, and Radisson (I really like Radisson Blu in Europe). I’ll keep my IHG cards for the 40k annual nights, but even those have been devalued by the ever-increasing number of properties charging just over 40k per night.

  4. I like IHG. When I travel I usually stop in smaller towns, not the cities. HIE’s and Candlewoods are everywhere and the properties are usually new builds within the past 5 years. I’m Spire Ambassador. I have points galore so never really pay for rooms anymore. At Intercontinental I never receive any upgrade unless I want to pay for it. No lounge access, no breakfast, maybe a bottle of water at check in. I don’t get upset because I know what to expect when I check in.
    That status though works wonders at the “lesser properties” and this is why I like the program. Recently, on a 2 week driving vacation I received room upgrades on every HIE hotel I booked and I always received the thank you for my loyalty and being a Spire Elite guest member. The breakfast each morning was adequate and in most cases pretty decent. The rooms were comfortable and clean. That’s all I want in a hotel plus the redemption rates were always between 22-30K points.
    Hilton Hampton and HGI’s were priced between 49-55K, and with the recent HGI Diamond Breakfast being downgraded to $10.00 per person, it became apparent to me anyway that the IHG properties offered better value.
    This IHG CEO spewed out the usual corporate drivel. If you want loyalty, offer clean properties and point redemptions that not only offer a fair redemption value but also recognize loyalty to the brand whether on a paid or free stay. That’s something that IHG sorely lacks.

  5. I agree with others who use this program for it’s strengths. For me, it’s very basic…TSA Pre Check credit and a free night each year. When I signed up, the offer was 140,000 points. The plan was to use those for one night stays near airports before heading out for family vacations. So if we needed to fly in late, that would work.
    I have used the points for 6 free nights all in very nice mid level properties with good breakfast.
    If I expected much more, I would be disappointed, for sure.
    So far, very happy. It’s all about filling a particular need.

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