Hotels take on Expedia and Priceline
The big hotel operators have gone up against fast-growing online travel websites like Expedia and Priceline.
Rather than seeing them make money out of the bookings, they are offering exclusive discounts as high as 25 per cent for loyalty program members booking through the hotel websites and apps.
It’s a big issue for the major hotel chains which have been trying to get guests to make their bookings by going to the hotels themselves.
While the online travel websites send them new customers, each new reservation eats into the hotel’s profits.
At the same time, the online sites have been stealing a bigger piece of that market.
Priceline’s total room-night reservations surged 25 per cent last year and Expedia recorded 36 per cent room-night growth in 2015 following a string of acquisitions.
The “member rates” and “exclusive discounts” in the hotels’ offerings are pitched only at the people who have signed up for their loyalty programs. That means the online travel sites don’t get the same discounts.
The discounted rates at RoomKey.com, a travel web site several hotels own, is one up on the perks offered by most loyalty programs which include perks like free WiFi service, room upgrades and rewards points.
Hilton’s advertising campaign gets straight to the point: it tells guests to “stop clicking around” and go to the Hilton website or app to book their stay. That promotion is linked to the Hilton’s loyalty club offering members discounts of up to 10 per cent.
Expedia, which owns travel portals including Hotels.com, Orbitz and its namesake website, has hit back. It has punished offending hotels publicising loyalty discounts by pushing their search results lower on its own website.
“The owners are going to be the ones to pay the price for the discounting strategy,” Cyril Ranque, president of lodging partner services at Expedia told The Australian. “We believe that it’s not a sustainable situation.”
by Leon Gettler, July 11th 2016
