Receiving value-added hotel benefits during a hotel stay while earning hotel points and promotion bonuses is a vital factor in my hotel bookings. Apparently, I am not in the majority of hotel guests.
Hotel News Now, a leading source of hotel industry data, published a January 2011 article, “Consumer booking behavior in the age of comparison shopping”. HNN cited Forrester Research data indicating only 39 percent of travelers in 2010 booked their hotel stays directly through hotel branded websites. The majority of consumers book through online travel agency (OTA) supermarkets like Expedia and Orbitz.
Expedia’s websites, including Hotels.com and hotwire.com, are the dominant players in OTAs. People tend to comparison shop and these sites offer consumers the ability to quickly compare room rates across hotel brands.
Chris Anderson of Cornell’s School of Hotel Administration studied hotel booking patterns at InterContinental Hotels Group and found 75 percent of consumers had comparison shopped OTA’s before booking at IHG.com directly.
The more significant data point from Chris Anderson’s research for me is the fact that frequent travelers are more likely to book directly through hotel channels. Frequent guests apparently know there is added value in loyalty programs.
OTAs Allow Price Comparisons, But Not Loyalty Comparisons
Online travel agencies are great for comparison shopping by hotel market segment and price. I always check OTAs, typically Kayak.com, for rate parity with the hotel brand site. I regularly get Best Rate Guarantee claims approved when I find discrepancies. Price, while a major factor in hotel value, is not the only factor to consider when spending thousands of dollars at dozens of hotels over the course of the year.
Frequent guests know OTA sites offer no insight to a hotel’s value-added loyalty benefits. InsideFlyer’s survey of loyalty programs reveals many value-added benefits across numerous hotel brands. The primary reason I check OTA rates is to compare hotels in different loyalty programs and correlate room rates in different hotel chains to the current loyalty promotion offers.
While I am a loyalty traveler, my loyalty is not exclusive to one hotel program. I hold elite status with six different hotel programs in 2011. As a loyalty member I receive loyalty points, promotion credit, elite stay credit and value-added benefits commensurate with my elite level. I weigh those considerations against room rates for different hotel brands when comparison shopping.
As a loyalty traveler comparing shopping rates, I also factor loyalty program benefits and added value for bonus points from current promotion offers. For example, I look at hotel rates and deduct the value of Diamond elite complimentary breakfast from the published room rate for Hyatt when comparing to Crowne Plaza’s rate. I look at Marriott brand rates in March and consider the value of a free night after two one-night stays to the rate of a Hilton brand offering double points for a two-night stay.
Some might argue the loyalty program model is ineffective with point chasers like me. I disagree.
Loyalty members choose not to be part of the 60 percent of hotel guests booking their rooms through OTA channels. Hotels have won their primary battle against OTAs for direct bookings. Loyalty member frequent guests bring higher revenue directly to the hotel. Points and free nights provide win-win compensation to the loyalty member for higher revenue derived from hotel direct booking.
Major hotel loyalty programs are growing globally. Many hotels in the developing world are signing on as a Marriott or Hilton or Accor brand or other hotel-mart brand. Loyalty members of these chains benefit from more hotels.
Even more exciting to me is the growth of smaller hotel loyalty program alliances to balance out the major brand growth effect. Hotel loyalty alliances like GHA Discovery, Stash Hotel Rewards, VOILA Rewards and Preferred Hotel Group are bringing thousands more hotels around the world into loyalty programs with defined value-added benefits for frequent guest members. I see this as a positive indicator for the future of loyalty travelers.
These days a traveler in rural parts of the Pacific Northwest may be 150 miles from the nearest Marriott brand when passing through Eureka, California or Coos Bay, Oregon. A loyalty traveler can stay two times with Red Lion Hotels and earn a free night with their 5,000 bonus points per stay promotion through March 31. And redeeming R&R points does not limit you to western U.S. hotels.
Red Lion’s R&R Club partners with Preferred Hotel Group meaning your points can take you to hotels around the globe. Dromoland Castle, Ireland free nights are 40,000 R&R Club points. This same hotel is 75,000 points per night in the off-season as a Marriott Rewards partner hotel.
Loyalty travelers have a world of hotel loyalty options. I choose to spread my hotel loyalty love around.