All the major hotel chains are working hard to get you to ‘book direct’ with them. It’s not really working overall, since they don’t appear to be eating into the share of reservations of Expedia, Priceline, etc.
These efforts aren’t new. Over the past 15 years chains have:
- Limited points-earning and elite recognition to reservations made through each chain’s approved channels.
- Offered ‘Best Rate Gurantees’ to market the idea that you get the best price when you book directly with the chain.
Park Hyatt Dubai
The latest move offering ‘member only rates’ that are supposed to be a little bit cheaper than what you’ll find elsewhere is the next step in a long battle. Hotel chains love that online travel agencies send them customers who might not have thought to book their hotels. But they hate paying substantial commissions for those customers.
The challenge that chains face is that while online travel agency sites can be awful to deal with most people don’t start off knowing they want to book a Hilton or a Marriott or a Hyatt. They know where they want to go and that they need a hotel. So the online travel sites help customers learn about their options, and hotel chains don’t have a great alternative to that.
Expedia Dancers Don’t Provide Customer Service. Flickr: Juggernautco
They’d be perfectly happy for customers to search on Expedia then leave to go book direct. Most consumers don’t take that extra step.
Hyatt this year followed Hilton, IHG and Starwood in no longer honoring elite benefits on stays booked through third party websites. That’s the change to World of Hyatt I hate the most. Customers already didn’t earn points or elite credit for such stays, so most elites already book direct, the only times it made sense to book elsewhere was when a third party site really was meaningfully cheaper or Hyatt itself appeared sold out but the third party would still sell the room.
Park Hyatt Buenos Aires
Hyatt cares about commissions and that they don’t get guest’s personal details in advance so cannot communicate or market to them. They should encourage third party booking customers to register with the chain in exchange for points. Instead they penalize those customers and give them no reason to communicate with Hyatt.
In pushing simultaneously the idea that the cheapest place to book is Hyatt’s own website, and that they’ll guarantee it, they’re trying to market that consumers pay more to book somewhere else. Sometimes it’s true, frequently it’s not. And it’s even less often that ‘Best Rate Guarantees’ will stand behind the spirit of the offer.
The Best Rate Guarantee is riddled with holes.
- You sometimes will find better prices on competing websites.
- That’s especially true on foreign websites where hotels think they can get away with it.
- And it’s true on ‘membership websites’ because those are exempt from the guarantee — even websites you join for free. I’ve seen claims denied because customers automatically ‘join’ a site when they complete a reservation (even though they could search rates and reserve without first being a member).
- If the competing price is for a room type that Hyatt shows as sold out on their site they won’t match. So the cheaper price for a room might be on Expedia, but since Hyatt will only sell you a more expensive room they won’t match the price of the less expensive room.
- Or if the competing rate has inclusions that Hyatt doesn’t they won’t match. If booking on Expedia gives you breakfast and booking direct doesn’t, they won’t match the lower Expedia rate that’s better.
- Some sites they match against and others they just don’t. Other than learning from experiences of other travelers it’s tough to know ex ante.
Hyatt Regency Maui
Over the past few years they’ve made two changes to the program which make the Best Rate Guarantee harder and riskier to use.
- Three years ago Hyatt stopped taking Best Rate Guarantee claims over the phone. Instead you’d submit a claim online and wait. And by the time you heard back a day later the better rate might be gone. (It looks like from the current FAQ that phone submissions are back, but I believe they aren’t processed immediately the way they used to be.)
- Last year Hyatt started requiring you to make a reservation with them first before they’d even check whether a better rate exists somewhere else. You had to book the same kind of rate you were matching against. So if you were matching to a prepaid rate, you had to book a prepaid rate. If Hyatt decided to deny your claim, you had already prepaid and were stuck with the more expensive Hyatt reservation.
Park Hyatt Vendome Paris
Now Hyatt has made another change to its Best Rate Guarantee. As I noted earlier today but Hyatt now confirms: starting January 31 instead of matching the price and then giving you a further 20% discount they’ll now match the price and give you $50 towards a future stay.
$50 may be more or less than the 20% discount although on anything more than a one night stay it is almost certainly less. It provides a cap in exposure (20% off a $500 stay is $100, 20% off an $800 stay is $160…) It can only be used on a future booking. There’ll be breakage: “The $50 credit will be provided as a single use offer code within four days of checkout of the initial stay and must be used within one year of being issued.”
On the other hand, a discount on the current stay isn’t always what the guest wants especially if the stay is being paid for by someone else. They’d happily have their employer or client pay more, and would prefer a discount that helps with their own future personal travels. The customer-friendly solution is to offer a choice especially since World of Hyatt is supposed to be about understanding each guest’s needs.
Even as they prepare to go to war with Expedia they aren’t bolstering the value proposition to consumers in a way that will drive the median — non-elite frequent traveler — to book through their own channels. They aren’t helping guests find the right hotel as well as third party sites, and they aren’t putting real teeth behind ensuring guests get the best pricing.