A smart new way to spend your hotel points is coming to a resort near you soon. It's called Pay with Points, a system currently being tested by InterContinental Hotels & Resorts (IHG) that lets you redeem your points for everything from a cheeseburger to a Swedish massage.
But the technology behind Pay with Points may be even smarter. It's a TV-based system, dubbed IHG Studio, that connects with guests in new ways. And it has the power to change your next hotel stay.
What is Pay with Points?
Pay with Points is a new system that lets IHG Rewards Club members redeem their points for food, beverages, spa treatments or room upgrades. IHG offers redemption opportunities to members through a new mobile experience connected to its smartphone app and in-room TV system.
Put differently, your TV will soon help you redeem unused points.
IHG is testing Pay with Points at the Crowne Plaza Atlanta Perimeter at Ravinia in Atlanta, the Hotel Indigo Alexandria in Alexandria, Va., and InterContinental Barclay in New York. At the moment, the system only allows members to redeem points for a discount on the room bill and food and beverage at the hotel bar. IHG offered FORBES an exclusive look at a working prototype in Atlanta.
Why Pay with Points is more revolutionary than it looks
On the surface, Pay with Points might not look revolutionary. That's because people can do almost anything with their points these days.
Hilton Hotels, for example, already lets you earn points for buying restaurant meals. The program, called Hilton Honors Dining, rewards you for buying food or beverages at your neighborhood bar, celebrating a special event at your favorite restaurant or trying someplace new. You can also redeem points for dining experiences, such as Sunday brunch at the Hilton Busan in Korea.
Marriott offers its loyalty program members something called Instant Redemption, which allows guests to spend their points on meals and spa treatments while on property. But to use points, you have to notify the hotel when you check out. There's no apparent way to handle the transaction through Marriott's guest room TV interface. That makes the system a little less "instant."
But IHG's Pay with Points solves a big problem for frequent guests: What to do with their excess loyalty points? A recent study found that customers are sitting on $100 billion in unredeemed loyalty points. Many of those points simply expire if you don't redeem them and your account is inactive. Hotel guests are looking for a new way to spend their hotel points — before they vanish.
What Pay with Points looks like
IHG's Pay with Points is part of a new, TV-based interface in every guest room. When you enter your room, the screen displays your name, IHG Rewards Club status and number of points in your account. You can navigate by using either your TV remote control or IHG smartphone app.
The TV-based IHG Studio system is simple to navigate. Click on a square to see your options and you can select one of several, including live TV, view your bill, or pay with points.
IHG Studio may look simple, but it's also smart. It addresses you in your native language and knows what city you’re in. Then it offers new ways to spend your hotel points.
"So if I'm Chinese, it will address me in Mandarin," says Ali Saeb, the director of in-hotel innovation for IHG. "If I'm on a treadmill at the gym, the system will offer me a two-for-one smoothie."
IHG is working on integrating the system with its food and beverage offerings, so it couldn't show me how to order a smoothie yet.
For now, Pay with Points lets you redeem your points for a partial discount towards your hotel folio. For 5,000 points, you can get $20 off your hotel bill. That's comparable to Marriott's Instant Redemption exchange rate.
What IHG Studio means for hotel guests
Pay with Points may be a smart new way to spend your hotel points, but the system behind it is much more than a way for guests to redeem their loyalty points. IHG Studio represents a full pivot to the digital hotel room through a TV set.The key features include:
As a benefit to owners, the system is relatively inexpensive. A 100-room hotel would spend about $5,000 to install the system. Maintaining it costs $14 per room per month, which is $1 a room less than the current in-room TV systems. Owners will see even more benefits over time. In tests, IHG saw a 25% increase in room service orders after plugging in IHG Studio. Once Pay with Points can handle other orders, that number will likely increase.
At the moment 24 hotels in the IHG system have adopted IHG Studio to various levels. The hotel chain is pushing it as a brand standard, according to Saeb. He expects IHG Studio to be available in as many as 100 hotels by the end of this year.
Is this the hotel room of the future?
Is Pay with Points — and the IHG Studio system that enables it — part of the hotel room of the future? Maybe.
IHG franchisees will see an opportunity to increase their room revenue. And who can say "no" to a 25% increase in room service orders?
For consumers, this is a good news/bad news proposition. The good news: A lot of the pain points of staying in a hotel are now gone. Chief among them: The TV remote, which has long been a source of frustration for travelers. Being able to use your smartphone instead of a germ-infested, user-unfriendly remote — that's priceless.
But you're also being followed around the hotel by an AI that's trying to sell you smoothies and Swedish massages. The temptation to earn more points and spend more money will be greater than ever. Also, you'll have to carefully consider the value of a point versus just using cash to settle your room tab. Even so, Pay with Points represents a step forward in in-room TV systems. It will be interesting to see what other tricks IHG Studio can learn besides ways to spend your hotel points.
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