IHG One Rewards points valued at 0.4p each by Head

Head for Points has published its valuation for IHG One Rewards hotel loyalty points. The site's average valuation is 0.4 pence per point.

Valuing hotel points is a subjective exercise, but the publication argues a range-based approach is key. Readers can afford to pay cash for hotels more often than for premium flights, allowing them to be selective. This means a points currency with a lower average value but a higher potential upside can be more valuable than one with a steady, middling return.

The HfP valuation methodology

The site's methodology presents a core valuation without detailed justification, then outlines the potential upside and downside. It also establishes a floor value by calculating what the points are worth if converted into other currencies like airline miles. For IHG One Rewards, the headline figure is 0.4p per point. This valuation does not adjust for points that would be earned on a cash stay, which can be significant during generous promotions.

The upside potential for IHG points

The potential upside for IHG One Rewards points is limited. According to Head for Points, getting 0.6p per point represents a strong deal that should be taken. The move to revenue-based redemptions, where the points cost is tied to the cash price, has capped the maximum value. IHG appears to cap most redemptions at 120,000 points per night in major cities. Based on the 0.4p valuation, beating that benchmark requires a hotel room costing over £480 per night. The analysis notes that new IHG hotels can sometimes offer better value as the company uses redemptions to drive initial business.

The downside and floor value

The downside for IHG redemptions is not disastrous but can be poor. The worst value typically seen is around 0.25p per point, which is 35% below the site's benchmark. The floor value, or escape route in case of a major devaluation, comes from converting points to other rewards. Converting to airline miles like Avios at a 5:1 ratio yields about 0.2p per IHG point if airline miles are valued at 1p. Redeeming for UK High Street gift cards offers even worse value.

A comparison of IHG One Rewards redemption options shows the following floor values:

The gift card deal has worsened over time, previously requiring fewer points for the same £100 voucher. The article concludes that the best realistic value members can expect from IHG One Rewards is 0.6p per point, advising them to take such redemptions when found.