Hotels Look to Funnel Travel Site Bookings

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Once, hotels and travel-booking sites had a sort of symbiotic relationship.

Travel sites like Travelocity and Expedia would market aggressively and draw in customers who could choose from a list of available hotels, and the hotels would pay a commission for any customers who were funneled through. It was a simple, but costly, way of doing business that seemed to work well for all parties.

These days, however, hotels are beginning to revolt from the old model, instead seeking out their own direct connections with customers.

Hotels Investing in Marketing, Loyalty Programs

Hotel brands that are trying to reinvent the wheel are attempting to raise public awareness using a mixed bag of tricks, but their primary focus lies with increased spending on marketing and retooled loyalty programs that benefit visitors who might only stay a few nights a year.

According to reporting in the Wall Street Journal, commissions paid to online travel agencies for the 12 months ending June 2015 total about $4.5 billion. However, this is only a fraction of the $8.5 billion spent globally by Expedia and Priceline alone on marketing efforts. Although any one hotel chain may not need to reach so far to hit their target audience, the $99 billion worth of world-wide hotel bookings generated yearly by travel sites will be a difficult number for a solitary hotel chain to begin to dent.

Changing Approach to Loyalty Programs 

This is why brands are also looking at loyalty programs that have traditionally only benefitted frequent travelers, like business-class visitors.

For example, this year, Hilton began allowing loyalty points to be put toward purchases on Amazon.com; Choice Hotels, which include Comfort Inn and Quality Inn, now lets customers use points for Starbucks gift cards and gas discounts.

Another tactic that is more likely to backfire is only giving certain perks to certain customers who book directly through the hotel’s site. Access to Wi-Fi and the ability to choose the exact room a customer wants are a few examples of these benefits to preferred customers. The goal is to convert customers into brand loyalists, but since these “offerings” are perks long associated with hotel stays, hotels looking to force a visitor’s hand could face some significant push-back.

Whether hotel chains are really committed to spending the money and manpower required to thoroughly market themselves to their target demographics remains to be seen. Until then, it may be worth checking both Travelocity and Hilton.com to compare prices.

 

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