IHG Points Purchase – Cheapest Way to Buy IHG Points
I’m currently in the process of writing a detailed article on the IHG rewards programme which is due to be published shortly. As part of this process I stumbled across a neat trick which may be of interest to people looking to buy IHG points cheaply, and as such I thought it deserved its own article.
Before I spill the beans on the IHG buy points trick, let’s start off by answering a simple question – Does it ever make sense to buy IHG points? In some instances the answer can be a resounding yes but it comes with certain risks…
Within this review we’ll start off by calculating what IHG points could be worth (if used wisely) and then see if we’re able to purchase points at a lower price, creating an arbitrage opportunity.
Let's break this post down...
What Are the Points Worth?
Whilst you can convert IHG points to various frequent-flyer programmes or alternatively redeem as vouchers, 99% of the time the best and highest value of IHG points is achieved through the redemption of IHG free overnight stays. Now the exact value of your points is likely to be dependent on the type of hotel you’re booking and the demand for that particular hotel, so we’ve set out a couple of examples below to show how values can vary.
Example One – The Cheapest Redemption
There are only a handful of hotels which can be redeemed for 10,000 points. Let’s assume you’re planning on heading to Birmingham and find yourself needing to stay at the Holiday Inn Express Birmingham – Castle Bromwich. As we can see below this would set you back 10,000 points.
The cash equivalent for exactly the same room would cost £84.48. This would provide a points value of 0.8p per point – a great opportunity, as we’ll see below!
Example Two – The Middle Tier
Now let’s take a look at a middle of the road IHG-branded hotel. The soon to open Hotel Indigo Stratford-upon-Avon would require a total of 30,000 points for a one night stay.
The cash equivalent would cost £174.60, providing a points value of 0.6p (again a reasonable redemption).
Example Three – Let’s Go Luxury
The final example is the recently rebranded 5 star Kimpton Fitzroy in central London. For one night’s stay at the hotel you’d need a total of 70,000 IHG reward points. The same night would cost a total of £323.00, equating to a points value of 0.5p.
As we can see from the three examples above, IHG points tend to have a higher value when redeemed for the likes of the budget Holiday Inn Express as opposed to their 5-star equivalents. Whilst these are only rough examples, we’ve seen that IHG points can vary in value from 0.5p to 0.8p. Let’s now take a look at whether it’s possible to purchase points at less than these values.
IHG Buy Points
The obvious way of purchasing IHG points would be directly through the website, but this may not necessarily be the cheapest way to buy IHG points – although the current bonus of 75% currently being offered (ending 28th Feb) helps provide a similar value to the travel hack set out below.
Until the 28th February 2019 IHG are offering a bonus of up to 75% more points on all purchases. You will however need to purchase these in US dollars. Let’s take a look at the cost of purchasing points, reflecting the benefit of the current bonus…
- 4,000 points (no bonus) = $40.50 or approx. £31.40 = 0.8p per point
- 10,000 points (plus 5,000 bonus) = $135.00 or approx. £104.67 = 0.7p per point
- 40,000 points (plus 30,000 bonus) = $400.00 or approx. £310.14 = 0.44p per point
As we can see above, with the ability to purchase points between 0.5p and 0.8p there are potential arbitrage opportunities for those willing to buy IHG points with the current 75% bonus. HOWEVER, I wouldn’t worry too much if you’ve missed this bonus, there’s another IHG points and cash trick that you should be aware of…
IHG Buy Points Trick
So far we’ve looked at redeeming IHG hotels with either points or cash. However there’s a third option – part paying with a mixture of cash and points. Now we can use this function to essentially purchase points at great rates.
Hidden within the terms and conditions of a points and cash redemption it is stated that any cash payment will not be refunded and you’ll instead receive the points equivalent. As such if you’re to make a booking with cash and points but subsequently cancel the reservation, you are effectively purchasing points at a very competitive rate… Let’s take a look at a worked example.
For this example we’ll use the Crowne Plaza London City. As can be seen below, it’s possible to book the property for a reduced rate of 35,000 points alongside a cash payment of £100. If you were to then cancel the room you’d receive 55,000 points which essentially means you will be purchasing 20,000 points for £100 or 0.5p per point.
Now the 0.5p per point isn’t quite as good as the bonus deal currently being offered by IHG but fear not, by booking a hotel in the US you’ll actually be able to buy IHG points at an even cheaper rate. In this instance we’ll use the Hotel Indigo Brooklyn where a 40,000 points redemption could be reduced to 20,000 points with a payment of $115.
With the ability to essentially purchase 20,000 points for $115 this would equate to approximately 0.44p per point – exactly the same as redeeming with the current 75% bonus offer.
Let’s Wrap This Up – IHG Buy Points Trick
There are various risks with purchasing loyalty scheme points which deter many people from buying what appear to be cheap points. Loyalty scheme points are often subject to devaluations without warnings, which in some instances could half the value of the points you hold. That’s why here at Thrifty Points we wouldn’t recommend purchasing points to hold for a considerable period of time.
HOWEVER, as we’ve seen above there are some clear arbitrage opportunities if you plan on paying the cash price for a stay in an IHG-branded hotel. If you were to book a 4-night stay at the Indigo Stratford this would cost either £698.40 or 120,000 IHG reward points. If you use either the current 75% bonus offer or the alternative IHG points-plus-cash trick to purchase points at 0.44p each, then 120,000 points could be purchased for just £528 saving a total of £170.40 – definitely something to think about!
If you’re looking at alternative methods of earning IHG reward points, we cover a number of further tips within our recent IHG Credit Card review which you may find interesting.