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IHG loyalty club to raise point rates

If you’re one of the more active members of InterContinental Hotels Group’s loyalty program, get ready for a change that might make you frown.

IHG’s 61-million member Priority Club program on Jan. 18 will raise reward-night redemption rates on 25% of hotels as the industry continues to recover from the recession, IHG loyalty chief Don Berg recently told Hotel Check-In in his first interview about the changes.

IHG runs about 4,500 hotels under eight brands including Holiday Inn, Holiday Inn Express, Crowne Plaza and InterContinental, its highest-end chain.

If you normally use your points for free nights in IHG’s best hotels around the world, you now could burn as many as 50,000 points per night vs. the current 40,000 points.

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But if you tend to use your points to stay in less fancy hotels, then there’s a chance that you might not notice the changes.

That’s because IHG is dropping the point requirements for 20% of hotels, Berg told me. The rest of IHG’s hotels will remain the same.

Of course, most savvy point fans will clearly notice the new point structure, if they haven’t already. Below, you’ll see the 2012 point redemption chart, which has now been posted on IHG’s website.

Berg says that IHG hopes to take the sting out of it by building in a two-month grace period.

Through mid-March, members will be able to book the old rates – without too much of a hassle.

He also shared a tip that you won’t find in any press releases that some Hotel Check-In readers will appreciate.

What to expect

Later today, IHG will send emails to U.S. members to announce new point category charts.

The new charts will take effect on Jan. 18, although the two-month grace period will be in effect – if you request it.

Examples of how the point categories will change:

Crowne Plaza: Today it costs 25,000 points for a free night’s stay in any Crowne Plaza hotel. As of Jan. 18, it will cost 25,000 points or 35,000 points, depending on the property. Example: Crowne Plaza Melbourne will go up to 35,000 points per night.

Holiday Inn: Today it costs 10,000, 15,000 or 25,000 points for a free night’s stay in a Holiday Inn hotel. But in 2012, Priority Club will add a fourth tier of 20,000 points, which could mean an increase or decrease, depending on the Holiday Inn you want to book using points.

“We don’t want to say, ‘Here’s the increase. It’s going to take place two, three months from now,'” Berg says. “That doesn’t help the customer who may have already planned a vacation.”

To give customers who had planned to use points in 2012 a break, any Priority Club member can use the old rates by calling IHG’s service center.

“We’ll automatically give them the old price for 60 days,” Berg told me.

IHG sensitive to point increases

IHG decided to add a grace period to help customers who had been planning trips, Berg says. Why bother? IHG execs watched rival chains when they announced increases in loyalty point requirements in the recent past.

“We know Hilton, Marriott and Starwood and everybody else has raised their prices in the last 18 months,” Berg told me. “We looked very carefully how customers have reacted to that.”

Hilton’s HHonors loyalty program, Hotel Check-In readers may recall, faced a significant backlash in 2009 when it devalued loyalty points – essentially raising rates – during the depths of the recession. People were upset largely because the increase came at a time when hotel rates were falling.

IHG took advantage of the situation, courting unhappy Hilton members with the early-2010 “Luckiest Loser” promotion. (Just a hunch, but I’d suspect that any Hilton HHonors member that switched to IHG will be extra sensitive about IHG’s news. )

In the end, IHG decided to go ahead and raise rates, but wait until hotel rates started to strengthen.

How to take advantage of point drops

Among the hotels that will require fewer points per night for a free stay:

InterContinental Bangkok: Today, you must burn 40,000 points per night to stay at this hotel, but as of Jan. 18, a night’s stay will cost 30,000 points

Holiday Inn San Francisco Civic Center: Today, a stay at this hotel runs 25,000 points per night but that figure will drop to 20,000 on Jan. 18

If you had planned to stay at either of the above hotels or any of the others that fall in the 20% category where points will drop for free night’s stay, Berg shared a tip for you as how you can make this work to your advantage.

First, make sure that a room at the hotel you want is still available. Then, if it is, cancel your existing reservation and re-book it using the new, cheaper point structure.

The 2012 point increases, by the way, apply only to free night redemption prices. IHG isn’t raising point requirements for merchandise, flights or gift certificates.

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