Third Party Bookings

Hilton’s website lists the best rate guarantee clearly

 

For miles and points aficionados, the first question that pops out about third party bookings is whether they’ll earn points/miles and elite credit. Given the often tense relations between third party sites and hotel chain, one tends to believe that booking direct may always be the best option.

 

Hyatt clearly prefers that you book direct

 

When you book through a third party site, hotel chains pay a commission to that website or travel agent that helps you book that particular hotel. Hotels would rather keep that money with themselves. We’ve seen most of the major hotel chains roll out ‘Best Rate Guarantees’ in order to encourage customers to book directly with them.

Since I use points for most of my hotel bookings, I usually don’t run into a situation where I have to make a choice between a direct or a third party booking.

The Exception

However, there’s one hotel chain which just made waves about having no qualms with regards to third party bookings. In fact, they say that they love it!

As per Skift’s recently published report:

While many of IHG’s competitors, including Hilton and Marriott, have been running campaigns and emphasizing direct-bookings, where guests find the lowest rates for loyalty program members on the chains’ websites. Garnier in Cancun said IHG recognizes that not everyone prefers or is able to book its properties direct.

“We love third-party bookings,” Garnier told around 600 attendees at the convention center at the Grand Palladium Costa Mujeres resort. “Shock. Surprise.”

One area of concern, however, is there needs to be more of “reconciliation” between third-party bookings and the needs of IHG’s loyalty program. “We are thinking about it,” Garnier said, adding that the chain doesn’t have a magic wand to address the problem and the relationship between the two needs to evolve.

Analysis

I find the line about reconciliation between third-party booking and the needs of IHG’s loyalty program quite interesting. What I’m interested in seeing is what decisions they take when it comes to keeping a pool of customers out of the IHG ecosystem. By encouraging third party bookings, they may keep getting business. However, that also means that fewer people stay within the IHG ecosystem to earn points, elite night credits or use the IHG credit card.

 

The Pundit’s Mantra

The same Skift article talks about how 70% of consumers have no brand in mind while looking up a hotel online. If that’s the case, why wouldn’t a brand want a customer to be in its ecosystem as opposed to being a free agent. My guess is that the statement by IHG’s executive was more of an effort to assuage tensions between hotel chains and third party booking sites as opposed to any strategic announcement.
Which hotel chain are you loyal to? Do you always book direct? Let us know in the comments section.

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