Yesterday Mommy Points pointed out that Hyatt had introduced a new process for their ‘Best Rate Guarantee‘.

Hotels see a really significant commission expense for bookings that are made through third party channels, especially the online travel agencies like Expedia and Orbitz. The major chains have managed to push down those commissions somewhat over the past few years. They may no longer be over 20% in most cases. But they’re still a significant business expense.

So they’ve taken many tactics to reduce those costs. One thing they do is try to push their own frequent customers to book through their own websites and call centers.

• Marriott and Hyatt will recognize status, but won’t allow members to earn credit towards their status with these stays.
  
• Hotel chains like Hilton and Starwood have a policy against even recognizing elite status on stays booked through these channels, in addition to not awarding credit towards future status.

Another thing that they do is encourage customers to book through their own channels by promising them the best rates for doing so.

Only they don’t actually ‘promise’ the best rates. All they do is promise a process by which if a customer discovers, under certain circumstances, that they aren’t getting the best price that they might be able to have the better price matched or beaten and might be able to get some compensation as well that varies by chain.

Hotel chains do try to get their hotels to load the best rates through their own channels. But hotels do continue to market better rates through third party booking sites. One frequent way this happens is when those sites run short term sales, and solicit individual hotels to participate in exchange for priority placement. This may happen on third party sites especially targeted at non-U.S. markets, thinking that this won’t draw much US attention and thus won’t trigger many ‘best rate guarantee’ claims.

Back to Hyatt’s change in process.

They offer to match and then take an additional 20% off of your room rate if you find a better price somewhere else.

You used to call up Hyatt and they would verify your claim while you’re on the phone. These calls could take 10 minutes or even 20-30 minutes (based on reports I’ve read).

Now they’re only taking claims via online form.

On the one hand I far prefer an online process. Unless the rate discrepancy was huge I wouldn’t spend time making the call for a best rate guarantee. I will definitely use an online process more. (It’s not just the time factor being worth the dollars, I also dread the phone but have fortunately gotten over that when it comes to talking to airline award desks.)

Many members are not at all happy about this change, though.

No doubt Hyatt sees this as a cost savings (those long phone conversations can be costly), as well as a consumer convenience.

But instead of verifying rates real-time on the phone with you, they say they’ll get back with you within 24 hours. And sometime during that 24 hour period the better rate you’ve found may have changed. If Hyatt can’t verify the rate on its own (even though they require you to submit a screen shot), you won’t have a successful claim.

(There are lots of other reasons why they’ll reject a claim. You need to be booking the same room type, for the same number of people, and with the same benefits — plenty of chains have rejected claims because the lower rate you’ve found elsewhere includes breakfast or parking while the higher rate on their website does not — hence they aren’t the same, even though the cheaper rate is better.)

Sometimes rates can be tough to find, or an employee on the other end of the claim may not be following the correct procedure to pull it up. That’s part of why phone conversations too so long in the first place.

If they can’t find the rate, they’ll reject the claim. Even if the rate is still there. And you’ll have some back and forth, during which time the rate could disappear.

Personally I’ll benefit from this change, but many will not.

The truly consumer-friendly solution would be to offer the online option but still allow for a telephone submission of a best rate guarantee claim.

Remember though that hotel chains don’t want to approve claims, really. They want to offer a credible process so that they can have a best rate guarantee, and market that they have one, as a way to convince customers that they’ll get the best deals booking directly — saving the hotels that commission which would otherwise be paid out to the online booking sites.

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