Comparing IHG's 4th-night-free with Marriott and Hilton's 5th-night-free

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I was reading Danny the Deal Guru’s write-up of the latest Chase IHG Rewards signup offers and something jumped out at me: the 4th-night-free benefit offered to cardholders, including those who hold the no-annual-fee IHG Rewards Traveler card. To be clear, this isn’t a new benefit, it’s just one I haven’t had a chance to think about in depth.

Generally speaking, I don’t rate IHG or their rewards program very highly, because while they have an enormous global footprint, they’re rarely competitive compared with the main hotel programs I rely on, Hilton and Hyatt. For example, I regularly visit Portland, OR, which on a sample search turned up two downtown Hyatt properties priced at 12,000 World of Hyatt points, a Hilton priced at 37,000 Hilton Honors points, a Marriott priced at 30,000 Bonvoy points, and a Kimpton priced at 25,000 IHG Rewards Club points (plus a nightly “amenity fee”). For a one-night stay, it would be ridiculous to choose the IHG property unless you’d built up a large orphaned balance through various shenanigans.

Since my framework is manufactured spend, not signup bonuses, it’s easy to make a direct comparison between the options:

  • 12,000 World of Hyatt points transferred from Chase Ultimate Rewards is worth $120 in cash.

  • 37,000 Hilton Honors points earned at 6 points per dollar with the American Express Surpass co-branded card is between $123 (if the same $6,200 in spend had been put on a 2% cashback card) and $185 if the points were purchased for 0.5 cents each, an offer which is regularly available, including now through March 7, 2023.

  • 30,000 Marriott Bonvoy points are worth between $240 (if you bought the points during one of their periodic promotions) and $300 (if you transferred the points from Chase Ultimate Rewards.

  • 25,000 IHG Rewards points are worth between $150 and $175 if you buy them using the “points and cash” trick (purchasing points while making an award reservation, then cancelling the reservation and having the points refunded to your account).

This makes comparing the four sample reservation options, and indeed comparing all reservation options at the four chains, easy, if on average:

  • World of Hyatt points cost 1 cent each;

  • Hilton Honors points cost 0.42 cents each;

  • Marriott Bonvoy points cost 0.9 cents each;

  • and IHG Rewards points cost 0.65 cents each;

then on a one-night stay you can convert the points cost of any property into the cash cost of manufacturing, transferring, or purchasing the required points. In the concrete example above, we saw that Hyatt and Hilton were quite competitive, while Marriott and IHG Rewards were significantly more expensive options.

On four-night stays, the equation changes, but only for IHG Rewards points. On four-night stays at the other three chains, the cost per point remains the same, while the 4th-night-free benefit offered by the IHG Rewards credit cards increases their value by 33% or decreases their cost by 25% to 0.49 cents each — same difference. The four-night IHG Rewards stay now costs just $122 per night, putting it squarely in the middle of the “competitive” pack of Hyatt and Hilton, or even on the cheaper end (ignoring that pesky Kimpton amenity fee, which you obviously shouldn’t in practice).

Moving to a five-night stay, the equation shifts again, but this time against IHG Rewards, since Hilton and Marriott both offer the fifth night free on award stays. The cost per night on the sample five-night stays with Hilton is $123 per night, with Marriott is $216, and with IHG $130. Hyatt doesn’t offer free nights on longer stays so their cost per night remains flat at $120.

Reference Card

I wanted to use a specific example to explain why I personally don’t care for IHG Rewards, but in case you want to bookmark this post or paste the values into your notes app, here are the shortcuts when calculating the cost of stays of various lengths.

Stays of 1-3 nights:

  • World of Hyatt: 1 cent per point

  • Hilton Honors: 0.42 cents per point

  • Marriott Bonvoy: 0.9 cents per point

  • IHG Rewards: 0.65 cents per point

Stays of exactly 4 nights:

  • IHG Rewards: 0.49 cents per point

Stays of exactly 5 nights:

  • World of Haytt: 1 cent per point

  • IHG Rewards: 0.52 cents per point

  • Hilton Honors: 0.34 cents per point

  • Marriott Rewards: 0.72 cents per point

Now you can easily calculate the cost of reward stays of up to 5 nights in length in every city in the world — not just in Portland, Oregon!

Advantages to getting more involved in the travel hacking community

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A few weeks back I wrote about some reasons why most people don’t have much interest in the travel hacking game, and why they’re mostly right: if you don’t have the bug, then it’s mind-bendingly boring to keep track of dozens of credit cards, loyalty programs, booking tricks, routing rules, etc.

Nevertheless, I’m quite involved, and if you’re reading this you probably are as well, so I thought I’d explore some of the obvious advantages of not just playing the game, but getting involved in one or more groups, following folks you respect on Twitter (or Instagram or Facebook, if you’re one of those people), and in general building relationships with other people who share your passion.

The most obvious advantage of making friends with other folks in the community is that it allows you to optimize your earning and redemptions over time. This can sometimes be purely transactional, and there’s nothing wrong with that: when I won a Bose sound system through an IHG sweepstakes, I sold it to a reader for a few hundred bucks lower than the list price, so he got a cheap sound system and I didn’t have to go to the trouble of listing it on Amazon or eBay, or dealing with a stranger through Craigslist or Facebook.

Folks like Vinh at Miles per Day have scaled this up a huge degree, going so far as to connect buyers and sellers of in-demand US Mint coins, but you don’t need to go that far to simply get to know people who might have miles and points you need, or might need the miles and points you have but don’t have immediate plans for.

Swapping referrals and signup bonuses

This option is talked about enough that I don’t think I need to go into it at any length, but when large credit card offers come around you may find that you’re not eligible (for example due to Chase’s 5/24 rule or Bank of America’s 2/3/4 rule) but someone else you know in the community is. Instead of sitting on the sidelines, you can ask your friends if they’d like to swap signup bonuses — maybe they’ve been banned from Citi for money order shenanigans and you haven’t, but you’re over 5/24 and they aren’t.

Expiring or useless free nights

Most folks don’t have too much trouble redeeming the free anniversary night that comes with the Chase World of Hyatt or American Express Hilton Honors Aspire credit cards, but might run into a problem when it comes to free night certificates with worse loyalty programs:

The IHG Rewards Club Premier Credit Card comes with a free reward night (at properties costing up to 40,000 points) on every anniversary, which is certainly worth more than the $89 annual fee to someone, but it might not be worth it to you because of how much more valuable the required Ultimate Rewards points to “fill out” an IHG award redemption would be if transferred to a different partner. Cancelling the card saves you $89, but it also means that no one gets to use the award, while you may be able to sell or trade it to someone who can get hundreds of dollars in value from it.

Likewise the Marriott Bonvoy Boundless (Chase) and Brilliant (American Express) cards come with annual free nights worth up to 35,000 and 50,000 points, respectively. Those aren’t worth their $95 and $450 annual fees to me, but especially in the case of the Brilliant card, you could easily wipe out your annual fee by selling or trading those rewards, when combined with the $300 property credit (Marriott properties used to sell physical gift cards you could resell or trade, although it’s been too long for me to know whether they still do).

Companion tickets

Another annual benefit you might not be able to personally use is airline companion tickets, like those offered by the Bank of America Alaska Airlines credit cards and the American Express Delta Platinum and Reserve cards.

The Alaska Airlines companion fare is the easiest to exchange with comrades because of a curious feature: when booking the companion ticket, any cash component of the reservation has to be paid for with an Alaska Airlines credit card, unless it is covered by funds you already have in your “Wallet.” This provides a simple way to book companion tickets without needing any information from the cardholder: just book a ticket that costs slightly more than the companion ticket, refund it to your Wallet, then pay with that balance.

Meanwhile, the Delta companion tickets have to be paid for in full with the credit card that generated the companion ticket (previously, any American Express card could be used, but that’s now changed in my experience). This makes the ticket slightly less transferable, since you need to place more trust in the person booking the ticket, which is another way of saying it’s good to make friends and connections in the community!

Transferable points and status

Another advantage of having friends in the community, especially ones that do things slightly differently than you, is the ability to pool points and status between programs. My two favorite examples of this are World of Hyatt and Hilton Honors.

World of Hyatt members can send and receive points by filling out the “Point combining request form,” which allows you to make award reservations out of the most advantageous account, and without contaminating either person’s relationship with Chase (there are strict limits on the number and frequency of Ultimate Rewards point transfers to non-household-members). Besides topping up a low balance, the main reason to do this is to make a Guest of Honor booking from an account with Globalist status, giving the guest the potentially valuable benefits like complimentary breakfast, lounge access, and waived parking fees, plus late checkout.

Hilton Honors has an even more streamlined system, with (in my experience) instant transfers after completing the online "transfer points” form. Their terminology is a little bit curious, but you “gift” points when you want to buy someone points with cash, and “transfer” points when you want to reduce your balance and increase their balance. Besides sharing Hilton’s fairly limited status benefits like potential upgrades, late checkout, and the dining credit that replaced their breakfast benefit, combining points in a single account allows you to take advantage of the very valuable 5th-night-free benefit on award stays (for elite members, including Silver elites, so pretty much everybody). This technique recently helped me book 7 nights in Hawaii for the price of 5 by combining 6 award nights and an annual American Express Surpass free night certificate.

Conclusion

Like any community, we’ve got our fair share of jerks, creeps, and affiliate bloggers, but overall I’ve been impressed by how warm and welcoming I’ve found the community to be, both at in-person events and online. There are obvious exceptions to be avoided, but if you’ve got the travel hacking bug, I think the advantages of getting more involved in the community swamp the pain of talking to the occasional jerk. And it always helps to remember that however small fry you think you are (and they don’t get much smaller than me), there’s almost certainly something you know that almost nobody else does, whether it’s a merchant coding error or a bank error in your favor: almost everybody has something to contribute.

Hotel benefits by length of stay

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The other day I was looking at hotels for an upcoming weekend trip with flexible dates. I settled on a convenient Hilton property, and was immediately annoyed that I only really needed 4 nights, even though the fifth award night would be free. I vented on Twitter and Milenomics contributor Robert Dwyer pointed out that if I had a Citi Prestige card I'd be sitting pretty with that card's fourth-night-free benefit.

That got me to thinking about the connection between length of stay and optimal booking options.

One-night stays

One-night stays are great because they're opportunities to redeem free night certificates at chains where you don't otherwise have any points or status. For example:

  • Chase IHG Rewards Club Premier cards offer an anniversary free night certificate good at properties costing up to 40,000 points;
  • the new suite of Marriott and Starwood credit cards will offer anniversary free night certificates good at properties costing between 35,000 points and 50,000 points, depending on the card;
  • Chase Hyatt credit cards offer anniversary free night certificates good at category 1-4 properties (up to 15,000 points per night).
  • For stays within the United States, the US Bank Radisson Rewards ($50 annual fee) and Radisson Rewards Premier ($75 annual fee) cards offer up to three anniversary free night certificates valid only at Radisson Rewards properties in the United States when spending $10,000, $20,000, and $30,000 on the cards each cardmember year. If you're going to spend $30,000 on one of these cards my general feeling is that you may as well pay the extra $25 annual fee and get 75,000 additional points annually between the two additional points per dollar the Premier card earns and the 15,000 additional anniversary points.

For longer stays, I don't like free night certificates because they force you to overpay for the nights that aren't covered by the certificate, or move between properties during your trip. But for one-night stays they're ideal, and I often use them for things like airport properties before an early morning flight.

Another option for one-night stays, depending on the property, is booking through one of the luxury travel portals:

  • the Visa Signature Luxury Hotel Collection offers a package of benefits including free Wi-Fi, breakfast for two guests, and a $25 food and beverage credit. If the price is the same as through other booking channels, then on a one-night stay the food and beverage credit can handily offset things like resort fees (which would also be owed on award stays), while on longer stays, the resort fees continue to mount while the food and beverage credit can be used only once.
  • likewise American Express offers a Fine Hotels and Resorts booking channel to their Platinum cardholders, which offers a more generous $100 food, beverage, or spa credit at some properties. Just as above, on a one-night stay that credit naturally goes further than on longer stays.
  • Finally, you can use a Virtuoso travel agent like classictravel.com to secure similar benefits while booking with the card of your choice.

Two- and three-night stays

This is the real wheelhouse of hotel points and fixed-value points, especially if you're able to redeem cheap fixed-value points like US Bank Flexpoints against your stay (if the total cost is above $500), since you'll also earn points on the room rate you pay. If you'd otherwise pay cash, redeeming points is usually a good idea in this window, since easily-earned points like Hilton Honors, World of Hyatt, and (under certain circumstances) IHG Rewards Club points don't offer any advantages, and the resort fees at luxury properties eat up the potential value of the food and beverage credits discussed above.

Some third-night-free offers may also be available through American Express Fine Hotels and Resorts, but unless you've done your research in advance I wouldn't sign up for a Platinum card just in hopes of capitalizing on third-night-free offers.

Four-night stays

At the four-night mark, three additional opportunities open up:

  • fourth-night-free booking options through American Express Fine Hotels and Resorts. These are somewhat more common than third-night-free offers, so for four-night stays in cities served by Fine Hotels and Resorts this may be worth checking since the free night and on-property benefits may lower the total cost below any points redemption you'd otherwise consider.
  • the Citi Prestige fourth-night-free benefit allows you to book four-night stays while only paying the room rate on 3 nights (although taxes and fees are still owed on the fourth night).
  • the Chase IHG Rewards Club Premier card fourth-night free benefit on award stays, which means that otherwise-marginal redemptions may be worthwhile, if the free fourth award night boosts you well above your points' imputed redemption value.

Five-night stays

Presumably because their Top Men told them that virtually no one books five-night award stays, Hilton Honors, Marriott Rewards, and Starwood Preferred Guest all offer the fifth night free on awards stays (Hilton only in the case of elites, but if you're not a Hilton elite I don't know what to tell you).

Seven-night stays

Finally, if you actually have a seven-night stay with Marriott planned at a Category 5 or higher Marriott Rewards property, you should consider booking it with a Hotel + Air Package before August 1, 2018, in order to receive 120,000 or more airline miles alongside your hotel redemption.

Conclusion

I give most people the benefit of the doubt that they understand their travel needs better than I do, so I try not to tell people what they should or shouldn't do. The flip side of that is that you should take the time to assess your own travel needs and figure out which configuration of airline, hotel, and credit card programs works best for you.

For example, if you take the occasional five- or seven-night international trip, but are putting your manufactured spend on a Radisson Rewards credit card, that's not an indictment of the program, it's a mismatch between what you're doing and what you need to be doing to pay as little as possible for the trips you want to take.

Likewise, if your travel consists of taking the occasional road trip to Chicago, you may well want to be earning free night certificates and points you can redeem at the Radisson Blu Aqua, one of the few really great hotels in the Radisson Rewards program in the United States.

Absolute versus relative redemption values

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In Wednesday's post about passing on the current IHG Rewards point sale, I mentioned that it's not enough to get good absolute value from a points redemption if you're not also getting good value relative to other redemption options. I think a lot of people understand this idea intuitively, but since it's central to my travel hacking practice, I want to spell it out in more detail.

Absolute value matters if you don't have choices

If you're constrained in your choice of hotels, airlines, or routes, then you are perfectly justified in thinking about the absolute redemption value of your points. A classic example would be a wedding or conference where you're expected to stay in a particular hotel. If the conference rate is $300 per night, and you're able to book it for 30,000 points instead, you know for a fact you're getting 1 cent per point in value.

You still have to make a choice though: is 1 cent per point a good redemption value or a bad redemption value? If you're redeeming a currency that's otherwise redeemable for cash at one cent each, like Ultimate Rewards points, then it's a bad value, since the paid rate will earn a larger rebate than the redemption. If you're redeeming a currency you paid much less than one per point for, then it might be a good value, since you're realizing a discount off a stay you'd otherwise have to pay cash for.

Relative value matters if you get to choose

In Madison, Wisconsin, there are there chain hotels more or less equidistant from the Capitol:

  • Hilton Madison Monona Terrace
  • Hyatt Place Madison/Downtown
  • AC Hotel Madison Downtown

On a random upcoming Wednesday night, the lowest available rates are quite close:

  • Hilton: $144.53
  • Hyatt: $148.01
  • AC Hotel: $162.86

If you were paying cash, you'd book the Hilton and call it a life. Meanwhile, the cost in points is all over the place (as you'd expect since they're different currencies). Here are those costs, and the redemption value compared to our fallback option of paying $144.53 at the Hilton:

  • Hilton: 36,000, 0.4 cents per point
  • Hyatt: 8,000, 1.8 cents per point
  • AC Hotel (Marriott): 25,000, 0.58 cents per point

These are all well within the normal range of redemption values for these currencies. But in order to determine the highest relative value, we need another piece of information: the cost we paid for the currency in question.

If you earn Hilton Honors points through grocery store manufactured spend, you earn 6 points per dollar spent, instead of 2 US Bank Flexpoints (worth 3 cents towards travel redemptions) with the Flexperks Travel Rewards card or 2 Membership Rewards points with the American Express Premier Rewards Gold card. Meanwhile, if your best method of earning Hyatt and Marriott points is transfers from a flexible Ultimate Rewards account like the Sapphire Preferred, Sapphire Reserve, Ink Plus or Ink Preferred, then you're effectively paying one cent each for those points — the value of Ultimate Rewards points when redeemed for cash.

The best relative value is therefore the Hyatt redemption: paying the equivalent of $80 for $144.53 in value is better than paying $180 (Hilton) or $250 (Marriott).

Alternative: availability-weighted relative value

The above methodology is appropriate for someone with access to plentiful manufactured spend and plentiful travel, which is sometimes treated as the "default" mode for travel hackers.

But of course that describes relatively few people in the real world. Far more common are business travelers who passively accrue points balances on their employer's dime, and casual travelers who discover they've accidentally accumulated a substantial balance in one or more loyalty accounts.

In those cases, I think the relative value calculations I described are almost useless, and it's better to use what you might call "availability-weighted" relative value: if Marriott Rewards points are the points you happen to have because your workplace has a contract with Marriott, you should redeem them more aggressively than a strict relative value calculation would suggest.

This is equally true of travel hackers who refuse to redeem points for anything less than their "optimal" value. If you have a large Hilton balance and a low Ultimate Rewards balance, it makes perfect sense to make a weak redemption at the Hilton instead of a good redemption at the Hyatt. That's what I mean by "availability-weighting" relative value.

If this is your strategy, remember you'll also want to normalize your balances for your typical redemption size. If you have 300,000 Hilton Honors points, 300,000 Hyatt points, and 300,000 Marriott points, which currency do you have "more" of? The obvious answer is Hyatt, where redemptions top out at 30,000 points, then Marriott (70,000), then Hilton (95,000+). However, those answers might be flipped if you have particular properties, and particular values, you typically redeem each currency at.

Conclusion

There is so much fuzzy thinking about the value of different loyalty currencies that I usually ignore people trying to nail down the precise value of this or that program, although I liked the Wandering Aramean Hotel Hustle "average point values" feature back when it was functional, mainly because it confirmed my intuitions.

Instead, I find it simpler to work forward from cost rather than backward from value. I know how much I pay for the loyalty currencies I earn, so for a given trip, I try to find the redemptions that cost the least in foregone value, while also taking into account which currencies I have the most of and therefore are most in need of redemption.

Just remember: your least valuable point will always be the one you don't redeem.

You probably shouldn't participate in a good IHG points sale

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Through Friday, June 15, IHG Rewards Club is offering a 100% bonus on purchased points, meaning you can buy up to 200,000 points for $1,000, or 0.5 cents each, when you buy 52,000 or more points (lower amounts cost more per point).

This is pretty cheap for IHG Rewards Club points

You can always buy unlimited IHG points for between 0.6 and 0.7 cents each year-round with the "points and cash trick:" reserve a room using points and cash, refund the reservation and your cash co-pay will be refunded in points. So a 50,000-point night that you book with 30,000 points and $130 in cash, then refund, will allow you to buy 20,000 points for $130, or 0.65 cents each.

Still, 0.5 cents is 20% less than 0.6 cents, so if you have upcoming travel plans that are good IHG redemptions at 0.6 cents, they'll be even better redemptions at 0.5 cents each.

You can also earn portal cashback at Points.com, which handles these transactions for IHG, reducing your net cost further below 0.5 cents per point.

IHG Rewards points aren't very valuable, but they're more valuable than that

IHG Rewards points are often worth between 0.5 cents and 1 cent each, so purchasing points at 0.5 cents each speculatively could reasonably be expected to translate into a discount of perhaps 50%, after taxes, on a future stay. That's not bad, especially if you aren't able to manufacture Hilton or Hyatt points in sufficient quantities to meet your travel needs.

Of course, there is a maximum points cost of a free night award of 70,000 IHG Rewards points (for now), while there's no limit to the cost of a paid night, so there's no theoretical limit to the value you can get.

IHG award availability stinks

The problem is that at the properties where you could expect to get the maximum value for your IHG points, award availability is extremely limited. Not only are properties like the InterContinental Hotels Bora Bora Resort Thalasso Spa extremely stingy with award space, what space does become available is quickly snatched up due to IHG's willingness to sell points for so much less than their redemption value at those properties.

A huge pool of cheap IHG points chasing scarce award availability makes people even more desperate to book rooms when they do become available, even holding onto reservations and rooms they don't plan to actually use.

I like the example of the InterContinental in Bora Bora because it has an entire FlyerTalk thread dedicated to folks trying to find award availability there, but the same is true of many desirable IHG properties during periods of even medium demand.

Conclusion

If you have firm plans, have identified an IHG property that provides good absolute value (I'd aim for 1+ cent per point) and relative value compared to any other hotel currencies you have available, and have confirmed the property has reward nights available for the dates you're interested in, then this is an opportunity to buy points at a decent discount compared to the price they're sold for year-round.

But if any of those conditions isn't met, then under no circumstances would I buy IHG Rewards points speculatively.

There are no off-the-shelf travel hacking strategies

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Last week I wrote what I thought was a commonsense corrective to the din of blogger voices encouraging readers to sign up for the IHG Rewards credit card before it was replaced with a couple of somewhat-more-expensive co-branded credit cards.

The post attracted a fair amount of disagreement (mostly polite disagreement, because my readers are phenomenal) by folks who had the card and enjoyed the annual free night benefit.

But, of course, people who already hold the card could not possibly have been the audience for a post titled "No, you shouldn't rush to sign up for IHG's crappy credit card." You can't sign up for a (Chase) card you already have. The post was explicitly addressed at people who had not yet signed up for the credit card, to discourage them from making a rash decision based purely on the fact that the card was going away.

Money is a sensitive subject, but travel hacking is about money

I understand perfectly well why folks who already carry the $49-annual-fee IHG Rewards credit card were upset by my criticism of it. How people earn, spend, and save their money is an area of almost-religious devotion among Americans, so if I say you're overpaying for a bad credit card, you don't hear that I think you're overpaying for a bad credit card, you hear that as criticism of your judgment or intelligence.

Unfortunately, that's just not going to work if you want my unbiased advice about travel hacking. You're going to have made mistakes in the past, you're making them right now, and you're going to make them in the future. If, every time you disagree with me, you treat it as a personal attack on you, you're inevitably going to experience this blog as a series of personal attacks.

I'm not here to tell you what you want to hear. I'm here to help you spend as little money as possible on the trips you want to take.

And, to be perfectly clear, I'm just as critical of my own decisions as I am of your decisions. The Delta Platinum American Express card is a tough card to justify keeping (impossible to justify if manufactured spend no longer counts towards MQD waivers), but I still have it. I'm just as much of a sucker for the overstated, overwrought, underperforming Platinum companion ticket as you are for your free IHG night.

Using someone else's travel hacking strategy is an expensive mistake

I can and do write about my travel hacking strategy:

  • Grocery store manufactured spend on my US Bank and American Express cards;
  • Office supply store manufactured spend on my Chase Ink Plus card;
  • Unbonused manufactured spend on my Chase Freedom Unlimited and 2% cash back cards.

But it makes no sense for me to recommend that strategy to an anonymous reader:

  • The Chase Ink Plus is no longer available to new applicants;
  • Not all grocery stores allow PIN-enabled prepaid debit cards to be purchased with credit cards;
  • Not every community has access to convenient liquidation strategies;
  • Some people have enough money with Bank of America to qualify for Platinum Honors rewards and earn 2.625% cash back with the Bankamericard Travel Rewards card.

I don't know you, I don't know your travel habits, I don't know your credit score, I don't know your net worth, how can I possibly give you advice about the right travel hacking strategy?

I can say under what circumstances a card is useful. A lot of readers seem to have glossed over my endorsement of the IHG Rewards credit card: "If you've got a favorite IHG property you stay at every time you visit your family, don't let me stop you from knocking off a couple bucks by using a credit card free night certificate."

I can say under what circumstances a card is worthless, like a US Bank Flexperks Travel Rewards credit card in a city without grocery store or gas station manufactured spend.

But I'm never going to try to tell you the best credit card, travel hacking, or manufactured spend strategy for you without a long, expensive conversation about your travel needs and opportunities.

Footnote: it doesn't matter if I was "right"

Today it came out that even existing cardholders will have their free nights limited to properties costing 40,000 points or fewer per night, and you might have seen Nick Reyes scrambling to cancel his son's now-worthless application, but I'm not gloating that I "called it" or that this somehow proves me "right." As a travel hacker and friend of travel hackers, I wish existing cardholders got their uncapped free night certificates grandfathered from here until the end of days.

But if I was "right," I was only right because you shouldn't apply for cards you're not interested in just because there's a sudden blogger pressure campaign, whether it's based on a card's upcoming retirement or the periodic higher affiliate payouts that send them into paroxysms of prose.

And all it took to be "right" was applying the same logic over and over again: pay as little as possible for the trips you want to take.

No, you shouldn't rush to sign up for IHG's crappy credit card

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Chase and IHG Rewards Club have offered a co-branded credit card for a number of years with the following features:

  • a $49 annual fee;
  • a signup bonus between 50,000-100,000 IHG Rewards Club points;
  • an anniversary free night certificate good at any IHG property in the world.

I've written multiple times about why such a card (like the similar Marriott Rewards Premier credit card) isn't interesting to me. Free night certificates require you to either move mid-stay (when you run out of free night certificates) or pay cash for nights you could otherwise pay for with fewer or more easily acquired points.

If IHG were an important hotel chain, with important hotels, where it was important to stay, I wouldn't have any problem with folks saving money on their annual IHG stays by paying a $49 annual credit card fee.

But no one has ever been able to give me a convincing argument for why a travel hacker should stay at an IHG Rewards Club property except that they have an expiring free night certificate from this crappy credit card.

Now the crappy IHG Rewards credit card is being replaced by two crappy IHG Rewards credit cards

Spencer Howard reported yesterday that the Chase IHG Rewards credit card is being retired, to be replaced by a couple of equally bad credit cards.

This has given an opportunity to affiliate bloggers to flog their old workhorse one more time before it shuffles off its mortal coil. My takeaway is a lot simpler.

Why don't you have an IHG Rewards Club credit card already?

I have a World of Hyatt credit card because I can redeem the annual free night certificate at Hyatt properties, where I'm also able to redeem my Ultimate Rewards points for good value.

I have a Hilton credit card because I stay at Hilton properties and manufacture spend with it at grocery stores, which gives me a solid discount off retail at the many Hilton properties around the world.

I don't have an IHG Rewards Club credit card because IHG Rewards Club sucks.

When I talk about travel hacking, I mean one thing and one thing only: paying as little as possible for the trips you want to take.

If you've got a favorite IHG property you stay at every time you visit your family, don't let me stop you from knocking off a couple bucks by using a credit card free night certificate.

But if, after all these years, you've never felt it was worthwhile to sign up for a $49-annual-fee credit card offering a free night at a chain you never stay at, why would it suddenly become worthwhile just because the card is going away?

The false urgency of now

There will always be people telling you that this, right now, is your last, best, or only chance to buy whatever it is they're selling. And there's usually not much harm in that. If you need a pair of socks, who cares if the haberdasher tells you they're his very last pair and how lucky you are to have them? If you need the heel of your shoe repaired, what's the harm in the cobbler telling you how close he was to shutting up the shop for the night before you walked in?

But there's a big difference between getting a little buttered up by the guy who's selling what you want to buy, and being suddenly hectored on all sides by people whose produce is about to spoil, and who need to get it off their shelves as quickly as possible.

The urgency they're expressing doesn't have anything to do with the once-in-a-lifetime offer you're about to lose out on. It's about the rotting produce they're not going to be able to sell for much longer.

So, are you buying it?

Assorted 2018 hotel news and program updates

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Quite a few changes have been reported to hotel loyalty programs in 2018, so here are a few brief thoughts in case you're wondering what to make of them.

70,000-point IHG Rewards Club properties

IHG Rewards Club has announced the following hotels will cost 70,000 points per night in 2018:

  • InterContinental Paris - Le Grand
  • InterContinental Bora Bora Resort Thalasso Spa
  • InterContinental Le Moana Bora Bora
  • InterContinental Hong Kong
  • InterContinental - ANA Manza Beach Resort
  • InterContinental London Park Lane
  • InterContinental The Clement Monterey (California)
  • InterContinental San Francisco
  • InterContinental Mark Hopkins San Francisco
  • InterContinental The Willard Washington D.C.
  • InterContinental Boston
  • InterContinental New York Barclay
  • InterContinental New York Times Square

I did some award searches and where I found availability, these hotels are still pricing at 60,000 points per night, so the pricing changes seem not to have gone into effect yet.

Using the Points + Cash trick (book then refund Points + Cash reservations until you have enough points for an all-points reservation) you can buy IHG Rewards Club points for 0.575 cents each year-round (and often somewhat cheaper than that), so a 70,000-point property costs roughly $402 per night. The only properties on this list where I'd even consider spending that much money are the French Polynesian resorts in Bora Bora. If you and a partner each had a $49-annual-fee Chase IHG Rewards Club credit card free night certificate, you could combine those with a couple free nights at $402 each and get a 4-night stay, for example, for a total of $902, or $225 per night, which compares favorably to the cost of an award night at the Conrad Bora Bora Nui (without drawing any conclusions about the respective quality of the properties).

Note that award space at those properties can be very difficult to find.

Improved transfer ratio from Membership Rewards to Hilton Honors

Also widely reported has been a permanently improved transfer ratio from flexible American Express Membership Rewards accounts to Hilton Honors, up from 1:1.5 to 1:2. Judging by the complaints I hear from readers, Membership Rewards points are the most difficult flexible points for non-expert users to redeem, so increasing their value when transferred to one of their simplest transfer partners is obviously an unalloyed good.

I don't think Membership Rewards points should be earned speculatively with the intent to transfer them to Hilton (if for no other reason than Hilton Honors points are easier and cheaper to earn with a Surpass/Ascend card), but I also don't think anyone should pay cash for a hotel stay while they have access to cheap and plentiful Hilton Honors points, since the least valuable point is always the one you don't redeem.

Award nights now count towards World of Hyatt elite status

Historically, Hyatt Gold Passport and World of Hyatt elite status could only be earned with nights (and until last year, stays) that had a cash component: only cash and Points + Cash stays earned elite-qualifying credit.

That changed this year, so award nights will also count towards elite status qualification. Unfortunately, it takes 60 nights to qualify for Globalist status, so I doubt this will have much effect except on the margin. An average of 5 nights per month doesn't seem unreasonable in general, but an average of 5 nights per month at Hyatt properties would require booking away from cheaper or better properties, which is a funny way to save money.

Of course, it's easier for some people than others.

Continental breakfast for Gold and Diamond elites at Waldorf Astoria Hotels & Resorts

Hilton has updated their "My Way" choice of benefits for Gold and Diamond elites at Waldorf Astoria properties to include the option of "a daily complimentary continental breakfast in the hotel's designated restaurant for you and up to one additional guest registered to the same room each day of your stay."

Interestingly, they have updated the elite benefits page to reflect the change but have not yet updated the actual My Way options in the app or online, presumably because the only guy who knows how to do so hasn't worked there for years. Hopefully Waldorf Astoria staff have been notified of the change, but I expect elites will have to do some haggling until the system is fully updated.

There are some cool Waldorf Astoria properties but the only ones I can see an obvious reason to choose are the Hawaiian, Caribbean, and Park City locations. Does anybody have a favorite Waldorf Astoria property?

Breaking even with IHG Rewards Club Spire elite status

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Last week I wrote about the possibility of using IHG Rewards Club as the primary hotel loyalty program for a reimbursed business traveler. In that post I considered only the Platinum elite status that comes with the IHG Rewards Club credit card. But of course IHG has a newish top-tier status, called Spire.

In the comments, reader Just some guy mentioned one popular way to achieve Spire status:

"Virgin Atlantic points are easy to acquire, and when transferred to IHG are elite qualifying. Every year that you hit 75k elite qualifying points, your status will be raised to Spire and you'll be gifted an additional 25k points.

Spend 32k of those points on Intercontinental Ambassador status and you will be given 5k points back and a buy one weekend night get one free certificate. Ambassador status gets you a guaranteed upgrade at intercontinental hotels."

There are a couple things here worth unpacking. Let's get started.

What is IHG Rewards Club Spire elite status worth?

Spire elites earn a 100% bonus on base points earned on paid stays, for a total of 20 points per dollar spent, and paying with an IHG Rewards Club credit card earns an additional 5 points per dollar. Updating the chart in last week's post, that gives the following comparison between Hilton Honors Gold, Marriott Silver, and IHG Spire status:

The way to read this chart is that an IHG Rewards Club member with Spire status has to spend less on paid stays than a Hilton Gold or Marriott Silver member to receive a free night at hotels in similar tiers. Note that this only applies to paid stays! If you're looking exclusively at credit card spend you need to use imputed redemption values, a completely different calculation.

Since Spire status can be acquired by transferring 75,000 Virgin Atlantic Flying Club miles to IHG Rewards Club, and Virgin Atlantic Flying Club is a transfer partner of Chase Ultimate Rewards, American Express Membership Rewards, and Citi ThankYou points, it's relatively easy to calculate how much you need to spend at IHG properties to justify buying Spire status.

Here's the math: 75,000 flexible points transferred from any of the 3 currencies translates into 100,000 IHG Rewards Club points, for the reason Just some guy mentioned. 100,000 IHG Rewards Club points are worth at most $700 — the amount they'd cost if you used the Points + Cash trick discussed in the comments here (you can usually find prices as low as $600 for 100,000 points, but $700 is the "standard" price). For the same reason, the additional 5 Rewards Club points per dollar spent you earn as a Spire elite are worth 3.5 cents.

The amount of money that has to be spent on paid IHG stays to break even is the difference between the value of the flexible points transferred and the value of the IHG points received, divided by the value of the additional points earned as a Spire elite. The more valuable your flexible point redemptions, the more you have to spend as a Spire elite to break even, as this chart shows:

So a Chase Ink Plus cardholder who redeems Ultimate Rewards points for 1.25 cents each and who transfers 75,000 points to Virgin Atlantic is spending $937 for $700 in value. To make back that difference, they'd need to spend about $6,750 at IHG properties, which would earn 33,750 in "extra" Spire points compared to a Platinum elite — worth $237, the difference between the amount paid in Ultimate Rewards points and the value received in IHG Rewards Club points.

One more point: once you've reached 75,000 Elite Qualifying Points, you'll receive Spire elite status naturally. That means the values above are only for spend up to the point where you'd qualify for Spire anyway. If you spend more than $7,500 at IHG properties per year ($15,000 at extended stay properties), you're almost certainly better off simply acquiring Spire status through your normal spend.

Alternatively, you can wait until the end of each calendar year to determine how far you are away from keeping Spire status, and only transfer the number of flexible points needed to maintain your status for the next year.

If you do pursue that strategy, keep in mind that points earned with the IHG Rewards Club credit cards do count as elite qualifying points. That means each point you earn with credit card spend is a perfect substitute for your flexible points. That's not terribly relevant for unbonused spend since the card earns just 1 Rewards Club point on unbonused spend. At IHG properties, however, the card would effectively earn 5 Ultimate Rewards, Membership Rewards, or ThankYou points per dollar spent, since it would save you that many flexible points at the end of the year.

What is InterContinental Ambassador status worth?

Besides late check-out (a benefit I personally value enormously but isn't, strictly speaking, worth anything) InterContinental Ambassadors also get a buy-one-get-one-free weekend night. Again, it's easy to determine the value of the free weekend night:

  • 27,000 Rewards Club points cost $189 (32,000 points cost $224 but Ambassadors should receive a 5,000 point voucher — I've seen mixed reports on this question so am giving both values);
  • InterContinental properties top out at 60,000 Rewards Club points, which cost $420 at 0.7 cents each;
  • So a free weekend night is worth using if the property's "Ambassador Weekend Rate" is below $659 but above $189.

If a property's Ambassador Weekend Rate is above $659 per night, you should just buy (up to) 120,000 Rewards Club points and redeem them for two nights. InterContinental properties in lower tiers will cost even less.

If a property's paid rate is below $189, you should pay the paid rate for both nights and not bother with Ambassador status at all.

For nightly prices in between, you'll save money by paying the paid rate for one night and $189 in points for the second night.

Adjusting these values for the value of points earned with Spire status on paid stays is an exercise left to the reader.

Conclusion

Just as I concluded last week, IHG Rewards Club (and InterContinental Ambassador) appear to offer great value to folks with a lot of paid travel that they're able to direct to IHG properties. The ability to "top up" your status each year by transferring flexible points first to Virgin Atlantic, and then to IHG, is an additional advantage of the program over the other large hotel loyalty programs.

On the other hand, leisure and budget travelers are likely better off sticking to programs with more valuable points or points that can be earned more easily, like Hilton, Hyatt (through Chase Ultimate Rewards), and Starwood Preferred Guest.