Are Loyalty Membership Rates Turning Chain Hotels into Ball and Chain Hotels?

by Ken Sommer

Are Loyalty Membership Rates Turning Chain Hotels into Ball and Chain Hotels?

You may have noticed, the travel industry press has been buzzing with the launch of hotel chain loyalty member rates. This may be exciting and enticing to travelers, but they may have the potential to drag on your travel program like a ball and chain.

As hotel chains focus more on the value of their brand and deliver a high return on investment to their franchises, there is a renewed vigor in the efforts to drive bookings directly to hotel sites. The promise is that travelers will receive discounts and other amenities and perks.

Backed by large advertising campaigns – booking direct with the lure of “greener” pastures has caught the eye of the travel agent community and will surely reach business travelers – many of whom today enjoy the advantages of a managed travel program. As a travel manager, you want travelers to have all the perks, as long as they are attainable within your travel policy. On the other side of the coin, hotel chains want to capture the loyalty of your company and its business travelers (not to mention share of wallet) but shouldn’t it be to the benefit of your managed travel program rather than at its expense?     

When a traveler books directly with a hotel chain, outside of their company travel policy there are direct impacts to a managed travel program such as:

  • Duty of Care – traveler safety in the event of an emergency
  • Cost Control
  • Policy Enforcement
  • Dilution of negotiated rate program – impacting bargaining power

Should your travel policy support a chain’s loyalty program and agenda if it threatens the vitality of your own travel program? All travel managers should be asking themselves about the impact loyalty membership rates may have. For example:

  • Are these ‘book direct’ initiatives in alignment with my company’s travel program or do they incentivize my travelers to break policy?
  • Given that hotel chains seek out a corporation’s business travel in high volume, how can I ensure my travelers have access to these loyalty membership rates?
  • If a hotel’s initiatives to drive direct bookings are not aligned with my company’s travel program, should I consider partnering with other chain hotels that support my travel policy?

While hotel chains look to drive bookings to their own websites, they also recognize the value of a centrally managed travel program and the potential volume it can deliver to their chain hotel brand. Hotel chains want brand loyalty so let them earn it in a way that is in alignment with your travel policy. Now is the time to communicate with your chain hotel contacts and leverage the value of your managed travel program.  

Ken Sommer is Director of Hotels, North America at Egencia. With a passion for travel and hospitality, Ken has over 20 years of experience in the travel industry. He oversees the Egencia Preferred Hotel program and previously worked for Expedia as Market Manager in Washington State and the Global Partner Group. Sommer earned a Bachelor of Arts in Hotel Administration & Business Management from Washington State University and is also a member of HSMAI.