OTAs are for hotel research, brand sites for booking

18/07/16

As more and more hotel groups offer discounts for booking directly, the old misconception that third parties always offer lower prices for hotel rooms simply doesn’t hold true anymore.

The fight

Hotel companies are aggressively battling for online booking by offering their most loyal customers discounted rates for reserving directly with them.

The contracts that hotels sign with third-party websites often prevent them from offering lower rates on their own sites, though hotel brands say they are free to offer the discounts to members of their loyalty programs.

In the past, most loyalty programs only offered perks like free Wi-Fi service, room upgrades and rewards points. This year, hotels started offering the discounted rates.

The wins

On July 20, Choice Hotels International will introduce a members-only discounted rate of up to 7% on ChoiceHotels.com and the company’s mobile app. All 27 million Choice Privileges members are eligible.

Since April, Hyatt Gold Passport members have been able to get up to a 10% discount for booking directly via the company’s website, mobile apps and other approved channels for stays in the USA, Canada and Australia.

That same month, Marriott International introduced Marriott Rewards Member Rates discounted at least 2% on weekdays and at least 5% on weekends for loyalty members who book directly on Marriott.com or the company’s mobile app, call centers or though select corporate travel professionals.

“We launched Member Rates to provide an exclusive benefit to those guests who choose to have a closer relationship with our brands and hotels,” says Drew Pinto, vice president of distribution for Marriott. In addition to the online discounts, members get free Wi-Fi and mobile check-in and check-out.

The efforts are aimed at online travel agencies (OTAs) that charge commissions to hotels that have listings on their sites. The hotel companies would not elaborate on the terms of their relationships with the OTAs but said the member rates do not mean they will stop working with companies like Expedia and Priceline.

“OTAs play an important role in the market, and we continue to have productive relationships with our OTA partners,” says Ellen Lee, senior vice president of digital for Hyatt. “OTAs help us introduce Hyatt brands to new customers and those who are not likely to build a loyal brand relationship.”

Melissa Maher, senior vice president of the Global Partner Group for Expedia, says having hotel chains offer a variety of loyalty rates has made the booking process more cumbersome for consumers.

“It’s really putting the consumer in a position where they have to spend a lot more time looking around and comparing different sites,” she says.

Expedia, she says, lets consumers shop for travel vendors in one place. The company, she says, helps hotels with technology, data, marketing, and customer acquisition. In 2015, Expedia sites, which include Travelocity, Orbitz Worldwide, Hotels.com, and a few others, drew more than 450 million monthly visits in more than 75 countries. It has a supply of more than 269,000 hotels.

And in the end, who wins the battle?

As we mentioned,  OTAs may be weapons and traps, depending on the dose. With this fight happening, who wins it is the traveler who ends up getting the best price.

Sources:

Hotelmarketing.com

USA Today

Nasdaq

 

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