While many hotel companies are doing all they can to cajole customers to book direct with them, Red Lion Hotels Corporation is doing the opposite.
Nearly a decade after Expedia Inc. and the Washington-headquartered lodging brand announced their inaugural partnership in 2008, the two have officially announced a newly enhanced partnership by which Expedia.com and Hotels.com will offer RLHC’s Hello Rewards’ member-only rates to existing program members as well as those who opt to sign-up for Hello Rewards via either website. While both Expedia.com and Hotels.com will continue to offer RLHC’s standard rates at the hotel company’s 114 upscale, midscale and economy properties in the U.S. and Canada, travelers who choose the Hello Rewards rate receive the benefits of the hotel program as well as Expedia+ and Hotels.com Rewards loyalty points.
As far as sharing more guest contact details—such as email addresses—with RLHC: “When a guest enrolls in the Hello Rewards program through Expedia.com or Hotels.com and gives us their information, we will pass that information along to RLHC,” said Melissa Mayer, SVP, global partner group,Expedia. “Through this enhanced partnership, RLHC is working with us as a customer acquisition channel and hopefully, they can convert these guests into their own guests.”
The Cost of Doing Business
When asked if RLHC would incur additional costs in terms of Expedia’s commission as a result of this new partnership, Maher said: “They would not. In this particular case with Red Lion, we have really just treated this as a strategic initiative that we’re testing with them and a way to enhance our overall partnership.” The related cost structure notwithstanding, Expedia's stake in the expanded partnership gives the travel tech company a new platform for showcasing the extent to which it can bring value to its hospitality partners.
“One of our key goals is to provide as much value as possible to our hotel partners and that’s why we launched this initiative with RLHC,” Maher explained. “It absolutely provides them with value and also enhances our overall partnership, giving RLHC another type of customer and helping them to meet one of their core business objectives and to grow their customer base in general.”
A New Breed of Loyalty Members
The two distribution channels represent a potentially meaningful jump in Hello Rewards members because, as Maher explained, most consumers who book Hello Rewards rates via the OTAs will not be existing program members, particularly as the sites cater largely to brand agnostic, leisure travelers. “One of the reasons why hotels work with us is because we drive incremental consumers to them and we also bring them a lot of package business that they can’t get on their own,” Maher said. “That’s where our value lies and if partners are not working with us, they don’t have access to these customers. If they’re not offering OTAs competitive rates, they’re leaving these customers behind.”
But through this expanded partnership, RLHC is upping its game as far as capturing these two customer segments. Expedia expects the new program will drive more package bookings for the lodging company because the new program will also help to give the brand greater visibility on the two sites. Maher described Expedia’s algorithm as taking “a lot of different components into account, including competitive rates and inventory and photos, and what we’ve seen so far is that with RLHC hotels, they’re offering very competitive rates and inventory as well as great photos, so overall their quality score is higher.”
Tech Development That Meets Demand
RLHC was unavailable for comment, but according to Maher, the program came about after the hotel brand communicated the importance of growing its loyalty member base. Expedia then spent nearly two months developing the technology that would allow consumers to both enroll in Hello Rewards and to book program’s member rates through the two OTA websites. “We’re really focused on utilizing our technology to help our partners and our consumers have an even better experience and we were able to get this live pretty quickly as that’s part of our ‘test and learn philosophy,” said Maher. “We like to test fast and learn quickly and this is a great example of that philosophy.”
The specific technology developed for this program can also be altered to suit other lodging brands’ loyalty program, as Expedia is currently talking to other hotel chains to offer members-only loyalty rates through its sites. “We realize that each program is slightly different so we want to make sure that partners with additional brands in their portfolio can message correctly on our site,” Maher said. She added that as Expedia works to strategically expand its business with major hotel brands, the company is also planning to soon launch additional pilot programs. “We’re creating initiatives and building tools to help with our partners’ needs,” she said.
Not the Norm
RLHC's move could be categorized as maverick. Consider Hilton Worldwide, which back in February launched its "Stop Clicking Around" campaign, aimed at convincing Hilton HHonors members to book directly with them, thereby bypassing online travel agencies altogether to get the best rate.
Not only considered good for customers, it, too, was meant as a strategy to avoid paying the oftentimes exorbitant commissions that third-party sites charge.
"Our customers don't need to worry about sorting through a dizzying array of websites, enduring hundreds of clicks and wasting hours of time. They can be assured that booking a room directly with us at any of our hotels doesn't require extensive searching and price checking to find the best prices online," said Geraldine Calpin, chief marketing officer at Hilton Worldwide, said at the time.
Other hotel companies have followed suit. A month later, in March, Marriott International introduced "Marriott Rewards Members Rates", a new rate exclusively designed to reward loyalty members who book directly on Marriott.com, its app, call centers or through select corporate travel professionals to automatically receive benefits.
Then, in May, Choice Hotels International came out with its own direct-bookings push in the form of members-only rates. The discounted rates is accessible on bookings made through ChoiceHotels.com and the company's mobile app. The option is going to be made available later this summer to all Choice Privileges members, but only on direct bookings.
Hyatt offers a similar program that it, too, announced this spring. The company is offering a new exclusive discount for members of the Hyatt Gold Passport program, which rewards guest with up to a 10-percent discount on bookings made through Hyatt.com or the Hyatt mobile app.
In addition to the discount, guests using Hyatt Gold Passport can get loyalty points, online check-in options, express checkout, mobile reservation management and direct interactions with the hotel via social media. Directly interacting with hotels will be expanded later this year when the company launches a service to facilitate on-demand requests through an app or text messaging.
“We want to build strong, long-term relationships with our guests and drive deeper engagement, so we are rewarding Hyatt Gold Passport members with an exclusive discount only available when you book with us,” said Ellen Lee, SVP, global digital for Hyatt. “Hyatt.com guarantees the best price, and its hassle-free experience means you manage your reservations on your terms.”