Marriott Quietly Removes Elite Benefits From Online Travel Agency Bookings

Marriott made a change so quietly last week I almost missed it.  Things have been pretty bumpy during the integration period.  Many folks (myself included) couldn’t login to their accounts right away.  Heck, it took almost 3 weeks before I could get logged in.  And, I’m among the many folks whose data about their elite status isn’t quite correct yet.  So, it would seem a puzzling time to be making things worse for customers.

Marriott No Longer Honors Elite Benefits on OTA Bookings

View From The Wing reported on this last week.  Marriott quietly updated their terms and conditions to note that customers wouldn’t be able to earn elite status credit or receive elite benefits on bookings through online travel agencies (OTAs).

Online travel agencies have been around for quite a while (think Expedia, Travelocity, Priceline).  And, for most of that time, many hotel chains have denied elite benefits on bookings through OTAs.  Hotel chains want to drive you to book directly with them.  It saves them money and gives them more control over the booking process.  I’m really of two minds when it comes to this change by Marriott.

Why I Like This Change

I’ve long been an advocate of hotels taking more control over their inventory.  OTAs serve a purpose in a down economy, when hotels can’t fill their room.  The role of the OTA was also more important when hotels didn’t have the sort of revenue management systems necessary to profitably fill all their rooms.  When I was in the hotel industry two decades ago, hotel revenue management systems were much less robust.  From what I can tell, today’s systems are still not cutting edge, but good enough.

Some folks bemoan the fact that they can’t get all of their benefits booking through an online travel agency.  They blame the hotel chains for that.  The reality is that if the hotel chain has to pay an OTA to get your business, there’s no way you can get your share of that money.  The hotels are for-profit businesses (and mostly publicly held) so they need to increase profits.  There’s no guarantee you do get better benefits from the property by booking direct versus an OTA.  But, history has shown us it’s pretty much guaranteed that the vast majority of hotel stays booked through an OTA won’t get you more benefits.  The most you can reasonably hope for is a lower price through an OTA.  In many cases, that may be a better decision than booking direct, but each to his or her own.

Bottom line, I’d rather the hotels were more in control of their own inventory.  I’m smart enough to shop around and find the best deal.  I don’t need an OTA to do that for me.

Hotel Danieli, Venice. One of My Favorite SPG Hotels

What I Don’t Like About This Change

In his post, Gary notes that Marriott representatives told him earlier this year they did not plan to make negative changes to this policy.  Rather, they indicated that they planned to roll out elite recognition for OTA bookings on the SPG side of the company once they went through the integration.  It appears they’ve done exactly the opposite.

I’ve heard rumors that hotel franchisees aren’t happy with some of the costs associated with the new Marriott loyalty program.  Breakfast benefits for elite members, suite upgrades, late check-out and other new benefits cost hotels real money.

Part of Marriott’s play with absorbing SPG is to make money based on scale.  Maybe the sudden change in this policy is Marriott trying to continue bridging the gap with unhappy franchisees.  Eliminating breakfast and points earning on stays definitely goes right to the bottom line for a hotel, as long as they can fill the rooms.

The Final Two Pennies

I’m never a fan of changes without notice.  Hotel loyalty program members spend all year earning benefits they want to use.  When they make changes like this without giving members notice, they break the promise they’ve made.

I’m a realist.  Businesses need to make changes to stay profitable. However, they lay the rules out clearly to customers.  If you don’t stay with us X number of nights this year, you won’t earn status.  The customer fulfills their promise, stays the required number of nights.  But, the program chooses not to honor one of the benefits.

Hotel chains aren’t the only one stretching the strings of loyalty.  Airlines have been trying to do this for a while as well.  The economy is chugging along.  Airplanes and hotels are full.

Where will loyalty be when the economic picture isn’t quite as rosy?

The post Marriott Quietly Removes Elite Benefits From Online Travel Agency Bookings was published first on Pizza in Motion

 

20 Comments

  1. I can understand that Marriott is upset that they make less money from OTA’s but it seems like the plan is to punish loyal customers that book through OTA’s to get back at the OTA’s. It’s silly. If they can control inventory, then they can control what inventory the OTA’s have access to. They could limit the rooms they offer or room types like they do on award bookings. I bet they aren’t going to do this to corporate booking OTA’s, it’s no different to the customer at the end of the day. The average person doesn’t care about the back of the house and the P&L statement. They just know what they experience at the hotels regardless of where they book.

  2. @DaninMCI – I am very much convinced they are also applying this to corporate bookings. In the company I am working for, we are required to use the corporate booking engine which is managed by American Express – When we arrive at our hotels we are often met with the message that the booking was done via a OTA and therefore no benefits. Especially SPG enforced this 100% – When we challenge the situation it is not unusual that they can provide evidence that American Express routed the booking through Expedia, Priceline or similar booking engine which results in no benefits, no points, etc.
    When sleeping in a hotel bed 200 nights a year, not having your corporate bookings count towards status is very much a disappointment. That said, I fully understand that the hotels are trying to find ways to make people book away from the OTAs.

      1. Yes indeed – When we originally raised the issue with Amex (as regular employees) because we thought a mistake had happen. The reply was that it depends on how the travel arrangements are done under the corporate agreement – working in a 55,000+ people company, it seems that Amex is offering some creative ways to get cost down. And all attempts to convince SPG to see the bookings as made through Amex and therefore not via an OTA was unsuccessful.

          1. Not after the 18th August, as I stay 4 weeks at a time, and have been able to get a better rate when booking directly, so now booking directly. (Got an exception from Corporate Policy, as this is client money on a 1 1/2 year contract). However, I have a colleague who this happened to on a Marriott booking and he is now going back and forth with Marriott about the issue.

          2. Hasse, was your colleague on a stay after the 18th? I’m still looking for someone who’s experienced this and can report on what’s happening at the property level. Assembling data points!

  3. Think of the business traveler that must use a travel agency to book their travel. Nearly every corporation insists that employees use those online booking engines (always costs the company more but accounting always masks that). Those business travelers will get the shaft in this.

    Marriott has become such a disappointment.

  4. After Marriott explicitly promised back in April that they would continue their old policy of honoring benefits on OTA bookings (though not giving points or night credits), I specifically planned to requalify for Plat this year with the plan of making bookings next year with Chase UR points.

    Changing this policy at this time of the year is outrageous, and I’m angry.

    1. +1.

      Slice this any way you like, Marriott is making negative changes (again) where they promised the opposite. Repeatedly lying to your customer base seems shortsighted at best.

      1. Christian, the behavior puzzles me. They had no obligation to tell people they would expand this policy of allowing benefits on OTA bookings. If you’re considering a change like this, why not just keep mum on the issue until you have a clearer picture. The way this went down really damages the trust in the relationship with their customer.

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