As a top-tier elite with Hyatt, Hilton, Marriott, Starwood and Intercontinental Hotels Group (IHG) it’s become clear, IHG doesn’t treat their elites well. But why? The hotel chain has more than 4,700 hotels worldwide, they are highly profitable but yet uncompetitive for elite benefits, they should be a market leader – yet they’re not.
How Does IHG Compare
For the purpose of this post I am going to focus on the top-tier of the award programs because that’s where the rest of the programs offer the most similar benefits across the board. Gary Leff has an extensive valuation, he and I mostly agree on the value of points received.
|Benefit||Marriott||Starwood Preferred Guest||Hilton||Hyatt||Intercontinental Hotel Group|
|Nights required for top tier status||75||50||60||60||75|
|Late checkout||4PM* conditionally||4PM||2PM||4PM||2PM|
|Reward nights count towards status||Yes||Yes||Yes||Only Points and Cash||Yes|
|Upgrades at Checkin||Yes||Yes||Yes||Yes||Yes|
|Confirmed upgrades in advance||No||Yes||No||Yes||No|
|Maximum points earned per dollar||15 (excluding extended stay)||3||25||6.5||20 (excluding extended stay)|
|Empirical value of points||.7¢/point||2¢/point||.5¢/point||1.5¢/point||.5¢/point|
|Points as rebate per $200/nt||$21||$12||$25||$19.50||$20|
While on the surface, they seem mostly equal and IHG doesn’t seem to fall behind their peers too far, the real value is in execution. Let’s dive into this a little deeper.
Like most major hotel groups, upgrades are limited in scope and benefits are unclear and intentionally vague. Last year I was not only a Spire member, but I also added the Ambassador distinction to my account to encourage top-level benefits and upgrades.
My efforts were useless.
As a spire currently, I rarely get the chance to stay in full-service IHG hotels (some Holiday Inns, few Intercontinental hotels and even fewer Hotel Indigos). As a result, true upgrades are only expected to be few and far between. In defense of some Holiday Inn properties, I have had great success upgrading at one particular property that would make Intercontinental guests jealous, but for the most part they just don’t give any of the nicer rooms away.
I have posted previously about why hotel upgrades are hard for hotels, especially franchises, IHG seems to put little to no effort into surprising and delighting guests.
On a recent stay in Shanghai at the Intercontinental Ruijin I was greeted as a Spire member and “upgraded” to a garden view room. This was not an upgrade, and I’m not stupid enough to believe that it is.
Comparatively, here is the upgrade I received the previous night in a Hyatt airport hotel. Here is one from the Conrad Bangkok and I just left the St. Regis Shanghai Jingan where I was given the Caroline Astor suite without hesitation (review coming). The JW Marriott Bangkok also provided a fantastic two-room suite, Marriott also gave me a suite facing the Bund in Shanghai (review coming).
IHG just doesn’t stack up.
Mid-tier Hilton Gold members get free breakfast, and top-tier from all of the other chains I mentioned give their members free breakfast at full-service properties.
IHG does not.
At the aforementioned Intercontinental Ruijin in Shanghai reception went out of their way to ensure I understood that breakfast was not included. In fact, she mentioned it some four times (I started to count). I inquired as to how much breakfast cost as she was making it so clear. I was told 250 CNY or $37.50 USD. She then wrote on my checkin form “NO BKF” then circled it. And yeah, that’s steep, but why?
I covered the breakfast in this post but for those that missed it, here is what the breakfast looked like:
Out of curiosity, I priced out (at approximate retail supermarket prices) what a normal American breakfast would cost the brand to provide to guests that are spending 75 nights/year in their hotels.
- (2) Eggs = $.40
- (2) Slices French Toast = $.30
- (2) Strips of bacon = $.45
- (1) Cup of breakfast potatoes = $.20
- (1) Premium cup of coffee = $.50
- (1) Fresh-squeezed orange juice = $1.00
Total = $2.85
Let’s add to that another server because the restaurant will be busier, but the rest of the sunk costs should stay the same. The kitchen will be open regardless, the cooks will be there for paying guests already and I don’t know how much science we need to put in this number. If we ignore service wages in the US and assume an hourly rate of $10/hour, that each server can take four tables and that they will turn every 30 minutes for breakfast we add another $1.25 to bring the total to $4.10.
Why would I give a hotel 75 of my business nights if I can avoid them or ANY of my discretionary vacation spend when they won’t spend $5 on me?
No Fifth Gear
Hilton has true luxury hotels in Waldorf-Astoria and Conrad properties. For Marriott, the JW brand and Ritz-Carlton serve the upper echelon. At Starwood it’s St. Regis and W Hotels while Hyatt has the Park Hyatt line and Grand Hyatt hotels.
IHG just doesn’t have that fifth gear. There are some standout properties certainly, the Intercontinental Bora Bora offers overwater suites and the Intercontinental Paris Le Grande offers a great location with balcony views of the Eiffel Tower. But make no mistake, there is no clear high-level consistent category for the chain (excluding Kimpton as they are outside of IHG Rewards).
While other chains offer aspirational awards, IHG as a chain fails to hold a premium line with worldwide locations. While these hotels are sparse even among the brands that do offer them (just 40 Park Hyatts in the world), there is still coverage in major cities in the world.
I find it insulting that the chain that has the least to offer elites (late checkout, breakfast and true upgrades in practice not just on paper) also requires the most nights equaling just Marriott who do practice what they preach. In 2017 the average worker in the US will work 246 days. That means traveling professionals will have to spend 1.5/nts every single week in an IHG property and get little benefit for doing so.
It Costs IHG
I am a prolific hotel guest. For business purposes I am often responsible for my team and of course my own nights. This year my total nights will exceed 150 between business and personal stays and more than 600 when including my team. Often, there is competition even in smaller markets among Hilton, IHG, and Marriott (Hyatt and SPG have little footprint outside of huge markets). I earn to spend, that is to say, I stay the nights I can control for business purposes in hotels that will provide me benefits and will also allow me to stay in properties of my choosing on personal stays. This saves my company money as well, which they appreciate.
When I go away with my family, we tend to stay at aspirational properties for extended periods of time. Sometimes we use points to pay for the stay, but often we use points and cash to offset expensive stays throughout the year. We also spend money during these trips in the hotel, sometimes on food and beverage, sometimes on additional services and products. On a trip to the Park Hyatt Sanya Sunny Bay we had a substantial bill at checkout because we preferred to eat at the resort as opposed to going into town. That’s revenue that IHG isn’t capturing from us nor any other high frequency guests I know.
Another stay, this time at the Andaz Papagayo in Costa Rica, we chose Hyatt over the Four Seasons which operates on the same property because we receive free breakfast and would earn points and status at the property. We don’t have many opportunities to stay at Four Seasons properties so loyalty in that brand would be less of a factor but when we shopped hotels, we didn’t even consider looking at IHG.
In Hong Kong a few weeks ago we chose the Conrad over the Intercontinental simply because breakfast was offered and we could rely on an upgrade to a better room if not a suite (we did receive a suite though the review has not yet been written). That was a head-to-head matchup and I even booked the Intercontinental to give it a try but canceled after deciding not to roll the dice with them. That’s real money the brand lost to someone who re-qualified in their program before the end of April.
For corporate bookings this year I can state as fact that at least 365 nights were booked with a different chain when IHG was an option and the cost in lost revenue to IHG was more than $40,000 to IHG for that booking.
The old adage is: if you don’t take care of your customers, someone else will. In this case every other hotel brand takes better care of their elites so that’s where we stay when we have a choice.
Why Don’t They Care?
When I spoke with Aaron Glick (former VP of loyalty at Hilton Honors) about the problem of getting status-based upgrades compliant with the benefits of the program, he briefly touched on communications his team had with hoteliers. They stressed the importance of honoring benefits and giving high-spending guests the care they have come to expect.
Hyatt this year has for the most part been very good (with a limited exception) in providing hotel upgrades to legitimately better rooms including upgrades to suites at checkin. Despite that this is a new benefit for the recreated World of Hyatt program, in practice the word has gotten to the franchised properties and execution has been strong.
While I have not spoken directly with the management of IHG regarding this, the benefits on paper do not translate in the field. The lack of a $5 breakfast benefit across the brand, the lack of an effort to install lounges, the failure to offer real upgrades to suites that otherwise go unsold to their best guests – says it all.
It’s not just their stated benefits, it’s the enactment of them and for that hoteliers reduce loyalty. They exclude themselves from discretionary spend by not giving upgrades or spending minimal amounts of money on their most frequent guests. Ultimately, IHG who does not hold hoteliers responsible for this cost themselves money.
If they do care, their actions don’t show it – until they do, they won’t get any of my optional stays.
Has your experience with IHG been better than mine? Have you received upgrades or other benefits that make IHG your chain of choice?