View from the street near The Best Western Herald Square in NYC where Rewards members get 10% off (Photo: Chris McGinnis)
Earlier this year, we saw a trend among the biggest hotel chains – including Hilton, Marriott, InterContinental and Best Western, among others – offering exclusive discounts to members of their loyalty programs.
Was this just the hotel companies’ latest attempt to sweeten program membership for their loyalists by adding another perk? While customers certainly benefit from getting a price break, the companies had another motive, according to the Wall Street Journal (paywall).
The exclusive discounts for frequent stay program members came with a restriction: To get them, customers have to book directly with the hotel company through its website or app. Reservations placed through third parties didn’t qualify.
The Journal says that the real reason for the hotel giants offering those discounts was to fight back against online travel agencies and booking services that were handling an increasingly large portion of hotel bookings – and collecting a substantial commission for each one.
The hotel companies used to collect more revenue from direct bookings than they did from reservations made through online travel agencies, the Journal noted. That changed in 2015, when the amount of bookings that came in through sites like Expedia and Priceline surpassed that of the chains’ own sites, having an adverse impact on their bottom lines.
Renovated guest room at the Hilton Union Square in San Francisco. (Image: Hilton)
The article noted that some online booking services are starting to fight back with tactics like giving lower priority in search results to hotels of the chains that are promoting loyalty discounts on direct bookings. Still, you have to consider your own bottom line: If you are not already a member of all major hotel frequent stay programs, you should at least sign up for basic membership if it means a discount.
Readers: Has the offer of exclusive loyalty program discounts enticed you to start booking hotel rooms directly with your preferred supplier? Do you ever book through third-party online services? Leave comments below.
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RainbowVoyages says
July 8, 2016 at 7:13 pmAs a travel advisor and owner of a small travel agency I’d like to point clients can not only reserve their “Member Only” rates with me, but can take advantage of my priceless advice as well. My commission is which is built into the cost of the room sale. Noteworthy is the fact that I can often get a better rate for my clients in markets where I specialize..
The major online travel agencies receive a much high commission (or discount) than I do. Member Only rates are an attempt to adjust the cost of those room sales. Hotels continue to welcome business from traditional travel agencies as studies have shown the overall spend of their clients trends higher.
Obviously the writer from the esteemed Wall Street Journal has yet to enjoy the effortless travel planning available from an experienced travel advisor.
Jason says
July 8, 2016 at 6:51 pmNote that your “non-online” agency very likely has access to these member rates and benefits.
jeff says
July 8, 2016 at 4:56 pmI noticed IHG started adding a “Members Only” rate. It is generally only a couple dollars per night cheaper than the fully refundable/changeable fare but higher than the non refundable. I was curious why this started. I use a travel agent for cars and air but do the hotels with my apps as I can generally get a better feel for the lodging to the site.
Jim Porter says
July 8, 2016 at 10:56 amWhatever the reason it is beneficial to us that use the hotel websites. I think most regular users are people that travel a lot and brand loyal already. Now having said that I have sometimes done a “price / hotel check” when going to an area for the first time or not so frequently using Expedia which is a good go to site.
With hotel prices going up and quality of their rooms, public spaces and even their exteriors diminishing a discount is nice.