02 December 2014
The old practice of many hotel loyalty programs to exclude third party booking channels from any point accrual has led to frustration with more than one member, but with the rise of power of hotel booking platforms, this practice seems also to be more and more outdated.
Marriott recently announced that it would offer free wifi at its hotels to all its Marriott Rewards members and catches hence up with some of its competitors. But it was quick to add the restriction that this benefit applies to customers having booked their stay directly through Marriott only. As a Marriott Rewards member booking through another booking channel, you will thus not only get 0 points/qualifying nights, but also face extra costs if you wish to use in-house internet.
The logic of program operators for such moves is obvious – steering demand through the own booking channels away from costly hotel booking platforms, which often take commissions of up to 30%. But that is the main difference between major hotel loyalty programs and Frequent Flyer Programs: As an FFP member, you get points irrespectively of your booking channel. Exceptions – such as no miles for consolidator fares – exist only for a small group of customers. At best, FFPs would encourage you to book through their website by offering you bonus miles for online bookings, which is, of course, their cheapest distribution channel as well.
Especially as frequent travellers are used to this practice by FFPs, it is hard to understand why the hotel industry applies so much more stringent measures. If, as a hotel, you are against the associated costs of third party booking platforms, you may simply not offer them? And if the reality is that you cannot ignore them without losing substantial business (because they do offer an added value, like it or not!), how wise is it to punish these customers choosing your hotel – not a booking channel! – after all?
And even worse for the hotel industry, many of these alternative booking channels have not watched that war between de facto partners without acting. They have either launched their own loyalty programs or partnered with FFPs, letting their customers earn points and miles with their bookings. Singapore-based Kaligo is just the latest example of such a platform, having recently initiated partnerships with Asia Miles, AirAsia’s BIG program as well as the FFPs of British Airways, Jet Airways and American Airlines/US Airways.
But even if you don’t look at extremely generous offers like Rocketmiles or Kaligo giving out thousands of miles for bookings at a fairly small selection of hotel, the maths often speak in favour of the hotel booking platforms if you have to choose between miles through a hotel loyalty program or through the booking platform – especially if you are more interested in Frequent Flyer miles than hotel awards. Booking a 1-night stay at a Holiday Inn hotel at 100 USD would ultimately let you earn 200 Frequent Flyer miles through a conversion with the IHG Rewards Club. The ratio is pretty similar at other major hotel programs.
But booking the same stay through HRS could let you earn 500 miles in the Air Berlin program topbonus. Aegean Airlines members could still get 250 miles by using Booking.com. And with the power of these booking platforms, they do indeed often guarantee to match any best prices offered by hotels today, taking away another argument for direct bookings while offering a much more transparent choice to customers.
The picture is different for really frequent hotel guests as they should still strive for the elite benefits of the hotel programs. But generally spoken, there is some mess out there in the hotel distribution world, which is today offloaded on the back of frequent travellers. Time for the industry to wake up and to redefine its position.