Surprising results when searching for value from purchased IHG points

IHG One Rewards frequently sells points at 0.5 cents each, and the sales are often promoted as being a useful way to save on a future stay (which they definitely can be).

The concept isn’t tricky – buy points at 0.5 cents each and then redeem them for a stay where the cost of buying all the points needed for that stay is lower than the cost to book the same room with cash.

This isn’t as hard to do as some may have you believe (it sometimes just takes a bit of work), but as we often write about these sales I try to make sure that I always have a reasonable idea of just how easy or hard it is to put points purchased in one of these sales to good use.

To that effect, I was recently performing a few award searches to see what value I could get out of IHG points, and I noticed something that I wasn’t expecting to see, so I thought that I share those findings here.

The search

This all started with an award search in Manhattan for a single night in February. The results surprised me, so I followed that up with a search for a single night in May (same location, same hotels) to see what that would throw up.

The May results weren’t what I was expecting either, but rather than searching yet another date for a stay in Manhattan, I decided to see if I would be equally surprised if I performed the same search on the same two dates in what most people will hopefully agree is a comparable city – London.

Both cities usually get similar labels attached to them – expensive, busy, Western, English-speaking, full of business and leisure travellers – and both have reasonably similar seasons (when it’s cold in NYC it’s probably cold in London), so seasonality shouldn’t really come in to the equation.

If similar cities are likely to give you similar value out of your IHG points, you’d probably expect these two to track each other reasonably closely. Sometimes, they don’t.

The data

I checked points and cash costs for the same set of properties in February and again in May, comparing roughly 20 IHG properties in each city per date.

For each property, I worked out a cents/point figure, the cash-equivalent value of a single point at that property on that date (all cash rates included taxes and fees).

Here’s what the data for Manhattan on a random night in February looks like:

And here’s the data for Manhattan on a random night in May:

In February, the cents/point figures across the Manhattan sample range from 0.58 to 0.77 cents/point, with an average of 0.68 cents/point. Every single property in the sample, 21 out of 21, returns more than 0.5 cents/point.

Crucially, this isn’t a curated list. These were the first 21 properties that my search threw out, so the results were more than a little surprising.

If someone had told me that by buying IHG points at 0.5 cents each and then using them in Manhattan (on any date) I would save at the first 21 properties that my search would return, I’d probably laugh and walk away.

By May, the picture has shifted down somewhat. The range has narrowed to 0.49 to 0.77 cents/point, with the average dropping to 0.59 cents/point, but 19 of the 20 properties checked (95%) are still returning more than 0.5 cents/point.

If I find that to be a little incredible.

Maybe I just don’t know enough about IHG pricing in Manhattan, but I definitely don’t associate one of the most expensive cities in the western hemisphere with somewhere I may easily get value out of points purchased in an IHG sale.

Sure, if you take a look at the May numbers you have to ask who’s paying $600+ or 100,000+ points per night at a Holiday Inn, a Holiday Inn Express, or at an EVEN branded property, but if you absolutely have to be in Manhattan on this date, you may not have any other choice.

Let’s now move on to London.

Here’s what the data for London on the same night in February looks like:

And here’s the data for London on the same night in May:

That’s more like it! That’s pretty much what I was expecting to see when I performed the Manhattan search.

For the February date, the cents/point figures range from 0.42 to 0.74, averaging 0.51 cents/point, barely above the 0.5 cents/point sale price, and only 7 of the 20 properties checked (35%) actually cleared that bar.

By May, the range has narrowed to 0.36 to 0.59 cents/point, with the average falling to 0.46 cents/point (below the sale price) and just 3 of the 20 properties (15%) are returning more than 0.5 cents/point, and as one of those properties is ridiculously priced (who’s paying $705 for a night at the Holiday Inn Bloomsbury?) the more realistic statistic is that IHG points purchased in a 0.5 cents sale would only save you money at 2 of the properties sampled.

This is a small sample, two cities, two dates each, and a few dozen properties total, so I wouldn’t treat it as the final word on IHG redemption value. But the gap between the two cities is wide enough, and consistent enough across both dates, that it makes the data interesting (at least for me!).

Thoughts

These are two cities that often get talked about in the same breath in the miles and points world. Both are major global gateway cities, both have famously high hotel cash rates, and both attract huge numbers of business and leisure travellers from all over the world, so it wouldn’t be out of line to believe that, generally speaking, the kind of value that you can expect to get out of your IHG points would be similar across both.

But it doesn’t look like it is. At least not based on this limited sample. And the difference isn’t small.

In Manhattan, virtually every property checked beat the 0.5 cents/point sale price. In London, the clear majority did not, and that gap held (and worsened for London) across two different months.

There’s also a seasonal pattern worth noting. Both cities saw their average cents/point figure fall between February and May (that also happens to be what I saw when analysing some Marriott Bonvoy data) and that tells us that points costs tend to rise faster than cash rates during higher-demand periods.

Annoyingly, that will reduce the value you get out of each point as demand increases, and as most people, by definition, travel when there’s high demand, that’s not great news if you don’t have much flexibility with your travel dates.

Bottom line

This all started out when I decided to see how much value I could get out of IHG points in Manhattan, and I found myself pleasantly surprised (shocked) at how, in both months that I checked, points purchased at 0.5 cents each could easily save me some cash on a single night stay.

I then checked the same dates for London and had that data been gathered in isolation, there wouldn’t have been anything surprising about it – it looked as depressing as I would have been expecting had I not already seen the Manhattan figures (the general feeling in the miles and points world is that if you want to redeem points at over 0.5 cents each, you have to put some work in, and this data bears that out).

The London data did surprise me, however, because it was so different from the data for Manhattan, and given all the similarities between the two locations, I wasn’t prepared for that.

In summary: When it comes to the miles and points world, don’t make too many assumptions (I should know that by now) – similar cities may not return similar results and you may find value where you least expect to find it.

Most importantly however …

Yes, you can definitely get value out of an IHG points sale when points are being sold at 0.5 cents each (you can check the latest sale here), but you should never buy points with the assumption that you’ll be able to use them as expected.

Have a plan. Check pricing. Then buy points only if the numbers work.