By Ed Perkins, Tribune Content Agency
Eight of the 10 largest U.S. hotel chain loyalty programs now award points only if you book directly with the chain or individual hotel — either its website, app, or phone reservation center. Chains in that group include Accor, Best Western, Choice, Carlson, Hilton, Hyatt, Marriott, and Wyndham; others undoubtedly do the same, and you can look for still others to adopt the idea in coming months. If you book through an online travel agency (OTA) such as Expedia or Priceline, or even a local-office retail agency, you won’t earn any points. You’ll still earn credit-card points, and you’ll still enjoy whatever benefits your loyalty status provides. But you won’t earn any new points for a stay unless you book direct.
This is another skirmish in the ongoing struggle between primary service providers — hotels, airlines, rental car companies, and such — and third-party OTAs. The stakes are enormous, in the billions of dollars. Specifically, the primary providers want:
- To avoid paying the commissions that OTAs take on the transaction, which can be as high as 15 percent.
- To avoid the costs the global distribution systems (GDS) assess for processing transactions.
- To be able to upsell you when you book, offering various upgrades and packages that the OTAs aren’t able to offer as easily.
This doesn’t mean you can’t use a search engine to compare rates and offerings. You can still use metasearch systems such as you find on TripAdvisor to compare prices and other specifics, so long as that metasearch engine allows you to link through to the primary supplier’s website to complete the buy. The chains are apparently willing to absorb the linkage cost, which is much less than the typical OTA commission and GDS charge.
Most big hotel chains offer other inducements for direct booking, chief of which are “member discounts.” You enroll in the loyalty program and get a discount — often tiny, but still at least a few bucks. In addition, some chains, including Hilton and Marriott, limit “free” Wi-Fi to program members who book directly; a benefit that amounts to at least $10 a day in many locations.
Although I haven’t seen anything in the trade press about it, I suspect that the “no agents” policy somehow gets waived for large companies who manage travel through one of the big business travel agencies. Those big companies have contracts with hotel chains that provide special rates, and the companies require traveling employees to stay at those preferred hotels — with varying success rates. I’m guessing that somehow, allowing “managed” travelers to earn loyalty points at preferred hotels helps in building the success rates.
Airlines are likely to be the next suppliers to adopt similar policies. Although airline fare regulations may make it a little tougher to block third-party sellers out of the booking loop, the airlines can be pretty creative when it comes to unregulated frequent flyer programs. And as far as I can tell, they would be free to adopt “book direct or forego your miles” rules if they chose to do so: The Department of Transportation, at least so far, has taken a hands-off position on frequent flyer.
“Book with us or lose points” efforts probably won’t go much beyond hotel chains and airlines. Rental car companies could do something similar, but their loyalty programs have much less pull on travelers than airline or hotel programs. Beyond membership benefits such as “pick any car” and “bypass the counter” programs, the points don’t matter much. Cruise lines and tour operators routinely sell all or most of their capacity through third-party agencies, and my guess is that they aren’t even thinking about trying to lose those connections.
But hotels are certainly serious about trying to get rid of intermediaries, and airlines would very much like to follow. So, in coming months, you can expect both to make program changes toward that goal. Fortunately, with good metasearch agencies, you don’t have to give up on online comparisons. Just make sure you can link through to the primary supplier when you buy, not any OTA, or just exit the search and open the direct link yourself.
(Send e-mail to Ed Perkins at firstname.lastname@example.org. Also, check out Ed’s new rail travel website at Rail-Guru.com.)
(c) 2017 TRIBUNE CONTENT AGENCY, LLC. — March 14, 2017
Ed Perkins is a nationally syndicated travel columnist, with weekly columns appearing in three dozen U.S. newspapers. He was founding editor of Consumer Reports Travel Letter and has written for Business Traveller (London), Arthur Frommer’s Budget Travel, The New Yorker, and National Geographic Traveler.
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