Points practices vary with OTA bookings
03 APRIL 2015 6:03 AM
Some hotel companies give guests loyalty program perks for bookings made through third parties, while others use points to incentivize bookings made direct.
GLOBAL REPORT—Hotel companies are responding with a variety of game plans as more online travel agencies get into the loyalty program game.
Some, such as the Carlson Rezidor Hotel Group and Red Lion Hotels Corporation, have opted to share their own loyalty points and perks to guests booking with third parties. Others, such as Starwood Hotels & Resorts Worldwide, only do so for members who book direct as a way to encourage more profitable bookings.
Carlson Rezidor’s approach is bred from the belief that not all customers book the same, explained Audrey Murante, senior director of global e-business development for the company.
The company’s most loyal guests will book through its Club Carlson loyalty program. Brand agnostic travelers book through OTAs. As a result, she doesn’t think OTA loyalty programs cannibalize Carlson Rezidor’s direct traffic, and the company honors points to all guests, regardless of booking platform.
RLHC has adopted a similar approach.
“It’s time as an industry to quit complaining about OTAs and recognize they have the money, the market share and the attention of the consumer—and now they are even offering loyalty programs,” said Bill Linehan, the company’s chief marketing officer. “At RLHC, we are partnering with the OTAs by sitting across the table from them to strategize how we can create the best outcome for both parties.”
As a result, RLHC’s Hello Rewards loyalty program treats all customers as honored guests—no matter how they book.
“We view the OTAs as a channel to a marketplace, and it is our job to capture customers. When we win the favor of a customer, we view it as customer acquisition,” Linehan said. “OTAs are the next disruptive frontier that is already here.”
Julie Atkinson, senior VP of global digital for Starwood Hotels, has a different take.
“Brand agnostic travelers may find their needs met by OTA loyalty programs, but we’re focused on the guest who is loyal to our brands and the experiences they receive when they are with us,” she said. “We’ve spent years creating what we think is the best loyalty program (with Starwood Preferred Guest).”
As such, Starwood only offers loyalty points to customers who book direct.
A peek into OTA loyalty programs
OTA loyalty programs vary as do hotel loyalty programs.
Expedia re-launched its rewards program in July 2014 with benefits including special pricing, upgrades and priority customer care experiences.
“The goal of this program is to offer a more streamlined, user-friendly, and enhanced customer loyalty experience,” said Joe Grabow, Expedia’s director of loyalty programs.
The program features a tiered structure that allows customers to earn extra benefits the more they book. Expedia does not charge hoteliers who participate in the program. When a guest redeems points for a free stay, the OTA foots the bill. The only time hoteliers contribute out of pocket is for perks offered through the +VIP Access program, which recognizes the most frequent guests with a value-add amenity such as free Wi-Fi, breakfast or parking.
Booking.com’s Genius Discount Program takes a different approach. Members who book at participating hotels receive at least a 10% discount off the best available rate. Hoteliers take that 10% hit out of pocket.
“We don’t encourage participation in any programs that require our hotels to fund the loyalty reward through a discount,” Carlson Rezidor’s Murante said. “If an OTA wants a loyalty program, we feel they should fund it.”
Brett Keller, chief marketing officer of Priceline.com, a sister brand of Booking.com, sees such hotelier-funded discounts as a way to capture and convert customers.
“They may not have picked a hotel brand over another,” he said of customers who book through the platform. “However, once they’ve come in through Priceline.com, the hotel has the opportunity to woo the customer. We consider ourselves complementary to our hotel partners, not competitive with a loyalty program.”
Sarah Butterfass, senior director of loyalty for Orbitz Worldwide, has a similar take on Orbitz Rewards, which launched in October 2013. The program allows members to earn Orbucks for redemption on airfare, hotel and vacation package purchases. Since its launch, Orbitz Rewards has enrolled more than 3 million members.
“The Orbitz Rewards program is meant to position Orbitz.com above other OTA programs and work in harmony with our hotel and air suppliers,” Butterfass said. “Consumers who shop on OTAs are generally less loyal to a specific hotel brand and are less focused on earning hotel brand loyalty points.”