To understand the potential impact public loyalty rates could have on a hotel owner’s revenue, Expedia has created an analysis based on reasonable assumptions and data to illustrate the hypothetical revenue cost of public loyalty rates.
When these impacts added up, the hypothetical scenario shows an 8 percent loss in revenue to owners in online bookings.
Expedia has outpaced the chains’ direct channels growth by demonstrating consumer value and, as a result, increased the OTA share of the mix of chain hotels’ bookings. Owners are now feeling the pinch of the large franchise fees that chains charge on bookings made via OTA channels even more.
The approach taken by some of those chains is to try to reduce the growth of the OTA by restricting what consumers shopping and booking through non-brand websites can access.
This could be competitive publicly available rates or blocking non-price benefits such as free Wi-Fi. They are discriminating against consumers in the guest experience by, for instance, making online check-in available only to their loyalty program members who book on the chain’s own channels.
LOYALTY RATES POTENTIALLY BAD
