Travelocity Mobile Strategy and Undermining Hotel Best Rate Guarantees

Yesterday morning I wrote about the future of mobile for travel providers. Reader S. shares a bit about Travelocity’s current offers which I thought were insightful.

Travelocity pushes their mobile app as the only one from an online travel agency booking flights, hotels, and cars. Currently they report that over 10% of their hotel bookings come via their mobile app, mostly within three days of arrival and 64% for same-night check-in.

Travelocity offers ‘mobile exclusive deals’ where they solicit hotels to offer lower pricing through their mobile booking app, usually at the last minute, than are offered on the Travelocity website.

In exchange for lower pricing, hotels get help pushing last minute inventory (that hotels may expect to go unsold), and they also get priority placement in search results shown to customers (Orbitz isn’t the only one that ‘manipulates the results it displays’…)

As I explained yesterday, hotels are paying 20% – 30% commissions to the online travel agencies. That’s why they push customers to book through their own websites.

I discussed elite status credits as a driver — in some cases not just offering the only way to earn status as booking through their own websites and a limited number of other channels, but even restricting elite benefits to bookings made through those channels (Marriott and Hyatt, for instance, will honor elite benefits on stays regardless of booking channel, Hilton and Starwood will not).

Another angle they pursue is best rate guarantees. Hotel chains want to reassure customers that they will always get the best prices on the hotel’s own website, in order to encourage customers to book there and save the hotel from paying commission. Hotel chains set rules that franchises aren’t supposed to offer lower pricing in most circumstances to other booking channels in order to maintain that position.

Hotels don’t really promise you the customer that the best prices are available on their website. They want customers to think that the best prices are there. And they do want to know when their hotel properties are pricing outside of the rules they’re supposed to be operating under.

An individual hotel doesn’t want to pay commissions when it doesn’t have to. A chain takes pains to minimize those expenses. But a property also wants any revenue rather than no revenue for a given room night, so its individual incentive is to defect while hoping that no one else will.

Travelocity’s Mobile Exclusive Prices are pitched to the hotels as having to be lower than what’s offered on the website. Travelocity’s website will generally show the same pricing as what’s offered directly by the chain. That means that a chain hotel offering mobile exclusive prices through the Travelocity app may well be violating the chain’s best rate guarantee policies.

So the app seems like a good place to start looking for Best Rate Guarantee claims, the bounty for which can vary from some points, to an even bigger discount, to a free night. Of course you have to get the chain’s employees to verify the price you’ve found, and to do so they’ll need to be willing to search the mobile app. That may be harder to do than it should be. But it’ll be worth playing with for sure.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I’m not sure I understand all of your statements on this post (my fault no doubt). It seems that some of the hotel chains are now promising that you will get the best rate via the chain website. I can’t remember exactly but I think choice and IHG do this. Now if that isn’t 100% true is another story.

  2. At least in the case of Club Carlson, the BRG explicitly states the competing rate must be found at least 48 hours before the stay. That could motivated primarly by the time they need to research the rate and make a decision, or to exclude last minute fire sale offers.
    .
    I’ve had excellent luck with the Club Carlson BRG, in one case having them accidentally apply the 25% discount twice. The two times I’ve used it, I’ve gotten discounts of about 65% off the hotel’s web-site rate.

  3. I’ve seen Marriott selling well (like 40%) below their website prices on Hotel Tonight, but their LNF claim takes about 6-12 hours so that’s not going to work. I guess they don’t want to let everyone rebook to the lower rate.

  4. Since most of the excess inventory becomes available on these mobile apps the same day as intended check-in it means you are within the no-refund window if cancelling the stay. So you are obviously at risk of forking out the original higher rate should anything go wrong.

  5. I had an approved Carlson BRG that ended up costing me zero after check out. Whoops 🙂 Got the Park Inn bonus too!

  6. The reviews for the Travelocity iOS app are awful. Overall rating of 1.5 stars out of 5. Lots of people saying it crashes. Lots of other complaints too. Be aware.

  7. I have never seen a BRG that would allow a ‘special’ rate like one that is only found on a mobile app…which is why you can’t get a match to HotelTonight rates…and I would think why HotelTonight isn’t on the web at all…

  8. Tried using this to my advantage and my phone spazzed out. Sounds like they need better coders at Travelocity.

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