Expedia and TripAdvisor are offering to list new low pricing for loyalty members on their sites. But can they really be that kind?
Here at Hotel News Now we listen to a lot of quarterly earnings calls from C-corps and real estate investment trusts. You can find coverage from Q1 2016 here.
There’s plenty of topline news in these calls, but usually every quarter a particular topic seems to come up again and again.
Last year, Airbnb dominated the chatter on earnings calls. This year, if first quarter calls are any indicator, the conversation is circling back to online travel agencies and the fight for customer loyalty.
Last week I shared here my thoughts on the power shift happening between hotel companies and OTAs, as hotel companies win more and more rate-parity battles. Hotel companies know that now is the time to win battles and inspire loyalty. When the next downturn hits, the inevitable flight to value among travelers comes with it. So, whoever locks down loyalty now has a better chance of keeping that traveler when their wallet gets a little bit lighter.
Want to know what you’re up against? Take a look at what two of the public OTAs are saying about the topic on their Q1 earnings calls.
Most questions focused on the company’s HomeAway acquisition, but Expedia executives hinted that they would be open to help hotel companies boost their own loyalty programs.
Could there be a future when Expedia lists the new low pricing tier for hotel loyalty program members? CFO and EVP of operations Mark Okerstrom said “absolutely.”
“We’re testing links from our site on to the direct sites of some of our chain partners,” he said on the call. “We are willing to test promotions where we will try to sign up loyalty members for them.”
Okerstrom continued and said that “ongoing reductions to our contracted hotel commission rates around the world, which are aimed at expanding the breadth of our global lodging inventory and the impact of our fast-growing and successful loyalty programs continued to be the main drivers.”
CEO Dara Khosrowshahi said Expedia “is not seeing any significant effect on our volumes,” as hotel companies push hard to encourage direct bookings.
“What we are seeing is that the hoteliers who provide us with the best pricing, with the best inventory are gaining share … directly through bookings, and also through (audience share) because they’re higher up in the sort order,” he said.
TripAdvisor officials intend to grow the company’s Instant Booking platform with loyalty in mind. President and CEO Stephen Kaufer said the transaction part of Instant Booking is all about loyalty.
“Now that we’re taking the transaction, all of those folks if they weren’t already members are now becoming members … and we get to remarket to them, remind them that we exist, build more of the transaction loyalty,” he said.
An analyst asked if other loyalty programs threaten TripAdvisor, and Kaufer gave a resounding yes.
“Every program that tries to drive a customer to go straight to a booking site that’s not TripAdvisor is taking a customer that we would like to service and making them loyal somewhere else,” he said.
Kaufer also opened the door to hotel companies listing loyalty rate tiers on the site, though he said he’s convinced guests will be loyal to TripAdvisor because of the content, choice and pricing. Kaufer said the site is engaging and offers a complete journey for travelers to find destinations, book their stays and “share the experience back on TripAdvisor.”
Share of the week
Whenever we interview a hotel GM, we ask him or her to share a fun story about accommodating an odd guest request.
I wonder what most GMs might think of this particular businessman, whose crazy and silly—but all in good fun—requests of hotels where he travels for work have caused a viral hit on Reddit.
He’s asked for a pillow fort to be built in his room and for a photo of a dog dressed as a sea captain, among other oddball requests.
“Many people at the front desk have told me they thought my request was hilarious and that they had so much fun doing it,” he told United Press International. “It makes them laugh and it helps take their mind off the daily grind.”
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