Why Hyatt's direct-booking push is irking travel agents

(Hyatt Gold)

Online travel agencies have had an iron grip on online bookings for some time, leaving hotels to find new ways to lure travelers to their sites. Hospitality giant Hyatt Hotels Corporation is the latest to draw on its loyalty program to guide deal seekers to book directly.

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. The discount was made available this week at Hyatt properties in the U.S., Canada and Australia.  

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.”

On one hand, the ability to offer direct discounts to guests on bookings plays to the biggest strengths held by the brands through loyalty programs. As a study conducted by Maritz Motivation Solutions found earlier this month, guests love loyalty programs and actively participate in the programs that provide immediate and frequent rewards. And there is nothing more immediate than a discount.

Additionally, the study found that the primary reason gusts participate in loyalty programs is to reap a financial reward. Any time a traveler is able to save on a stay they are able to justify participating in a loyalty program. Even more important, the reward here is quantifiable.

Last, if Hyatt is able to use this program to draw more guests to its loyalty program, that means it will have access to more member data and have a greater opportunity to cater stays directly to the individual, something loyalty programs have been promising to build on for some time.

The other half of the story is that once again major hotel brands are following trends one after another. Last month, Marriott announced a similar rate-based scheme to attract direct bookings through its loyalty programs, and before that Hilton did the same thing. It's crowding an already overstuffed app space as travelers look to find the best deal and hotels scratch their heads for ways to undercut OTAs.

Even worse, while these discounted rates may encourage direct bookings for the major brands they are excluding the global distribution systems used by travel agents. The American Society of Travel Agents released a statement calling the direct booking campaigns pushed by the major brands "misleading."

“Hyatt tells us that while this new promotion is commissionable to agents, the agent can only obtain it by booking directly through a Hyatt channel and not through their GDS,” ASTA’s statement said. “This move makes comparative shopping harder for agent and consumer alike, and adds to an agent’s workload by disrupting the standard booking process.”

Furthermore, while the ability for agents to book these rates through agents is offered it isn't explicitly stated.

One thing hotels often forget is that OTAs bring them bookings, and a large number of them. While operators want to funnel as many guests as they can directly to their website, this year's wave of initiatives could be seen as them turning their back on those who fill their beds.

“While the good news for the travel agency community is that major hotel chains are making these discounted rates (or free Wi-Fi, depending on the promotion) available through some agents, this fact is nearly invisible to the consumer,” the ASTA's statement said.