How Much Does IHG Pay Its Hotels (Franchised) for Award Nights?

The miles & points hobby has many fascinating elements to it. One of the aspects I find most interesting is the interaction between individual hotels – which are mostly franchises owned by third parties – and the corporate entities running hotel chains / loyalty programmes. Specifically… how much are hotels paid for award nights by the hotel chain?

Kudos to Loyalty Lobby for finding some amazing detail and posting it on his blog.

IHG Rewards Club does operate a bit differently from other chains. Even though it promises that there are no “blackout dates”, IHG hotels are only required to release 5% of their room inventory as award nights. (other chains usually promise that every standard room can be booked using points)

IHG hotels are reimbursed according to the following chart:

Then, if the hotel has more than 1,000 award nights in a year (or 2+% of total inventory consumed as awards), an additional bonus payment is made.

Finally, if the hotel reaches a 96+% occupancy on any given night, award nights will be reimbursed at the full average daily rate.

Some Thoughts…

  1. Less than 96% occupancy is considered “low occupancy”? I’d say 90% is a pretty full hotel!
  2. For a hotel in the $120-150 price range, a $80-100 reimbursement is really rather good – it’s no wonder that certain hotels pop up frequently on Point Breaks, as that would easily get the hotel into the 1,000+ night / 2+% bonus range
  3. Why don’t high-end hotels release more award availability? $225 per night sounds pretty good to me, especially since many guests simply won’t pay a $350+ room rate when they have points to use up. And the truly popular / full hotels will receive the full ADR reimbursement

Anyhow, I love finding out details such as these. How about you?

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