IHG confirmed this week that they plan to start experimenting with dynamic pricing for award bookings. The new system will allow the hotel chain to change room prices based on demand.
In the earnings release, the group revealed that as part of strengthening its loyalty program, it would be “testing new features for 2019 roll-out, designed to increase member engagement with variable point pricing.”
Skift writes that a spokesperson for IHG confirmed that the group is experimenting with dynamic pricing, saying “as part of a continued effort to enrich the value proposition for our IHG Rewards Club members, we’ll be introducing variable pricing on reward night redemptions. We’re testing new features for a planned roll-out this year, and will be sharing additional details as they are available.”
While we still need to see how this will be implemented, it often spells bad news. We should expect price hikes for the best properties at peak travel times, but there should also be some instances of cheaper rooms if you have more flexibility.
Over the course of the year, IHG plans to experiment with how to value each point and whether standard tiers still make sense in any of the scenarios. By taking its time, IHG may avoid any costly mistakes that could erode the ranks of its IHG Rewards Clubs members.