All travel suppliers want consumers to book direct, making their reservations on the company’s website, via the company’s smartphone app, or by phone through the company’s reservations center. Direct booking means the airlines and hotels pay no commissions to intermediaries, so the full price of the flight or room night flows to the provider, not to Expedia or a Main Street travel agent.
Plus, maintaining control of the traveler’s purchase experience gives travel suppliers the opportunity to cross-sell and up-sell. Need a rental car with that flight? How about an upgrade to premium economy?
There is, in short, plenty of money to be made by simply shifting existing customers from mediated to direct booking.
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Southwest’s is one example of managing sales to maximize profit: The airline doesn’t sell through online travel agencies. But that’s too extreme for most airlines and hotels, which still depend on agent bookings for a significant portion of their sales even as they want to minimize them. The alternative approach, adopted by most airlines and hotels, is to swear fealty to their agency “partners” while giving customers special incentives to bypass agency channels and book direct.
Marriott’s Discounted Member Rates
Marriott this week announced its latest direct-booking incentive: specially discounted room rates for Marriott Rewards members who book direct, beginning on April 11. The discount will be “at least two percent on weekdays and up to five percent on weekends,” and will apply to a hotel’s “lowest applicable available public rates for non-premium rooms.”
Hilton rolled out a similar loyalty-program benefit last month, with these direct-booking discounts:
- A 2 percent discount on best-available rate for bookings made within 14 days of arrival
- A 3 percent discount on best-available rate for bookings made 15 days or more prior to arrival, for stays Sunday – Thursday (Saturday – Wednesday in the Middle East)
- A 10 percent discount on best-available rate for bookings made 15 days or more prior to arrival, for stays Friday – Saturday (Thursday – Friday in the Middle East)
As is Hilton’s, Marriott’s discount is being promoted as one among a package of perks available to loyalty-program members, including a best-rate guarantee and free WiFi. In fact, the loyalty program itself functions as a direct-booking incentive, since “rooms booked through third party online retailers, such as Expedia.com, Travelocity.com, Hotels.com, Booking.com, Priceline.com, Tripadvisor.com or any other 3rd party online/mobile travel portal (regardless of how the hotel is paid) are not eligible for Points or Elite night credit.”
All of which raises the question: Why book through an agency, when only Marriott gives me a discount and loyalty points?
Reader Reality Check
Do you find yourself increasingly booking direct with hotels and airlines?
After 20 years working in the travel industry, and almost that long writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.
This article first appeared on SmarterTravel.com, where Tim Winship is Editor-at-Large.
Tim, how do you square the “let’s cut out the middlemen” attitude with the continued willingness of hotels, even big-chain hotels, to offer serious benefits (breakfast, upgrades, late check-out) to bookings thru Virtuoso agents, Amex FHR, MC World Elite aka Carlson Wagonlit agents, etc.? I honestly would love to stop using travel agents but, at any luxury hotel where I don’t have elite status, there’s a 99% chance i’ll get more bang for my buck by using one. Do you see hotels ending such agent-based benefit programs down the road?
It’s a balancing act, the potential revenue against the costs. In an ideal world, though, I have no doubt the hotels would cut out the travel agents altogether.
As an ex travel agent, I can tell you that this is an age old battle. Every hotel, car rental, and airline company has made great efforts over the years to reduce travel agency bookings. Technology has just made it simpler. Whether it’s car rental “manager’s special rates”, hotel direct booking prices, or the airlines initiating commission caps to make selling air tickets unprofitable, it’s all just the same. Ultimately, of course, the public ends up losing due to fewer choices.
When I worked for the airlines back in the early ’80s, 85% of our revenue was generated by travel agents. When we called them “partners,” we meant it. Today it’s a very different relationship. And I agree: from a consumer standpoint, the lack of choice is a negative.
I totally (respectfully) disagree with the lacks of choice statements coming from this shift. Whilst I feel there is a place for everyone (a hotels reach couldn’t possibly match that of online agents in particular) the fact you can browse, compare and do reasonably unbiased decision making on your own makes the decision pool wider, not shorter. Any hotelier who’s ever incentivised an agent knows they can narrow the pool in their own favour on these booking paths with monetising the matter.
With the erosion of elite benefits and point values, I think I’d ask why book with the hotel any more? Why would I book a room directly with Hilton when anyone with a pulse has their diamond status and it costs 90k points for a decent room? When instead I could get points with the travel agency that are about as valuable and can be used on any other hotel? I suppose the 10 percent may lure me in, but hotel room rates are so malleable a percent discount doesn’t really make me feel like I’m saving any money.
But don’t a discount, however modest, and loyalty perks, however scant, beat the alternative? The hotels are betting on it!
I believe the discounts are also available to select travel agencies. Not sure what agencies that would include right now – Virtuoso, Carlson Wagonlit, etc?
The Marriott website includes the following:
These rates may also be booked through an authorized travel agent or select corporate travel partner (“eligible channels”) at any hotel participating in either loyalty program.
I posed the same question to Marriott. Their response: “The list has not been one we’ve shared in the past. I can tell you that a consumer can book member rates directly on our channels to receive the lowest rate possible. They can also contact their travel agent and ask if they have the rate available and can book it for them.” Not very helpful, I’m afraid.