Breaking even with IHG Rewards Club Spire elite status

Last week I wrote about the possibility of using IHG Rewards Club as the primary hotel loyalty program for a reimbursed business traveler. In that post I considered only the Platinum elite status that comes with the IHG Rewards Club credit card. But of course IHG has a newish top-tier status, called Spire.

In the comments, reader Just some guy mentioned one popular way to achieve Spire status:

"Virgin Atlantic points are easy to acquire, and when transferred to IHG are elite qualifying. Every year that you hit 75k elite qualifying points, your status will be raised to Spire and you'll be gifted an additional 25k points.

Spend 32k of those points on Intercontinental Ambassador status and you will be given 5k points back and a buy one weekend night get one free certificate. Ambassador status gets you a guaranteed upgrade at intercontinental hotels."

There are a couple things here worth unpacking. Let's get started.

What is IHG Rewards Club Spire elite status worth?

Spire elites earn a 100% bonus on base points earned on paid stays, for a total of 20 points per dollar spent, and paying with an IHG Rewards Club credit card earns an additional 5 points per dollar. Updating the chart in last week's post, that gives the following comparison between Hilton Honors Gold, Marriott Silver, and IHG Spire status:

View fullsize

The way to read this chart is that an IHG Rewards Club member with Spire status has to spend less on paid stays than a Hilton Gold or Marriott Silver member to receive a free night at hotels in similar tiers. Note that this only applies to paid stays! If you're looking exclusively at credit card spend you need to use imputed redemption values, a completely different calculation.

Since Spire status can be acquired by transferring 75,000 Virgin Atlantic Flying Club miles to IHG Rewards Club, and Virgin Atlantic Flying Club is a transfer partner of Chase Ultimate Rewards, American Express Membership Rewards, and Citi ThankYou points, it's relatively easy to calculate how much you need to spend at IHG properties to justify buying Spire status.

Here's the math: 75,000 flexible points transferred from any of the 3 currencies translates into 100,000 IHG Rewards Club points, for the reason Just some guy mentioned. 100,000 IHG Rewards Club points are worth at most $700 — the amount they'd cost if you used the Points + Cash trick discussed in the comments here (you can usually find prices as low as $600 for 100,000 points, but $700 is the "standard" price). For the same reason, the additional 5 Rewards Club points per dollar spent you earn as a Spire elite are worth 3.5 cents.

The amount of money that has to be spent on paid IHG stays to break even is the difference between the value of the flexible points transferred and the value of the IHG points received, divided by the value of the additional points earned as a Spire elite. The more valuable your flexible point redemptions, the more you have to spend as a Spire elite to break even, as this chart shows:

View fullsize

So a Chase Ink Plus cardholder who redeems Ultimate Rewards points for 1.25 cents each and who transfers 75,000 points to Virgin Atlantic is spending $937 for $700 in value. To make back that difference, they'd need to spend about $6,750 at IHG properties, which would earn 33,750 in "extra" Spire points compared to a Platinum elite — worth $237, the difference between the amount paid in Ultimate Rewards points and the value received in IHG Rewards Club points.

One more point: once you've reached 75,000 Elite Qualifying Points, you'll receive Spire elite status naturally. That means the values above are only for spend up to the point where you'd qualify for Spire anyway. If you spend more than $7,500 at IHG properties per year ($15,000 at extended stay properties), you're almost certainly better off simply acquiring Spire status through your normal spend.

Alternatively, you can wait until the end of each calendar year to determine how far you are away from keeping Spire status, and only transfer the number of flexible points needed to maintain your status for the next year.

If you do pursue that strategy, keep in mind that points earned with the IHG Rewards Club credit cards do count as elite qualifying points. That means each point you earn with credit card spend is a perfect substitute for your flexible points. That's not terribly relevant for unbonused spend since the card earns just 1 Rewards Club point on unbonused spend. At IHG properties, however, the card would effectively earn 5 Ultimate Rewards, Membership Rewards, or ThankYou points per dollar spent, since it would save you that many flexible points at the end of the year.

What is InterContinental Ambassador status worth?

Besides late check-out (a benefit I personally value enormously but isn't, strictly speaking, worth anything) InterContinental Ambassadors also get a buy-one-get-one-free weekend night. Again, it's easy to determine the value of the free weekend night:

• 27,000 Rewards Club points cost $189 (32,000 points cost $224 but Ambassadors should receive a 5,000 point voucher — I've seen mixed reports on this question so am giving both values);
• InterContinental properties top out at 60,000 Rewards Club points, which cost $420 at 0.7 cents each;
• So a free weekend night is worth using if the property's "Ambassador Weekend Rate" is below $659 but above $189.

If a property's Ambassador Weekend Rate is above $659 per night, you should just buy (up to) 120,000 Rewards Club points and redeem them for two nights. InterContinental properties in lower tiers will cost even less.

If a property's paid rate is below $189, you should pay the paid rate for both nights and not bother with Ambassador status at all.

For nightly prices in between, you'll save money by paying the paid rate for one night and $189 in points for the second night.

Adjusting these values for the value of points earned with Spire status on paid stays is an exercise left to the reader.

Conclusion

Just as I concluded last week, IHG Rewards Club (and InterContinental Ambassador) appear to offer great value to folks with a lot of paid travel that they're able to direct to IHG properties. The ability to "top up" your status each year by transferring flexible points first to Virgin Atlantic, and then to IHG, is an additional advantage of the program over the other large hotel loyalty programs.

On the other hand, leisure and budget travelers are likely better off sticking to programs with more valuable points or points that can be earned more easily, like Hilton, Hyatt (through Chase Ultimate Rewards), and Starwood Preferred Guest.