Beginning July 20, Choice Hotels will officially enter the direct booking wars by offering its own exclusive rates for members of its loyalty program, Choice Privileges. The rates will be available only on ChoiceHotels.com and the Choice mobile app.
A spokesperson for Choice Hotels said, “We are evaluating making this available to travel agents in the future” and that the rates will only be available online, and not by phone.
Choice Hotels says the member rates will be up to 7 percent lower than the best available rate found on other distribution channels such as online travel agencies like Booking.com and Expedia. Choice is also offering a lowest-price guarantee, promising to match a guest’s price and give them a $50 Visa gift card if they found a lower price online at other sites. The rate doesn’t include any additional perks, per se, but it does include any benefits that already come with membership in the Choice Privileges program.
The decision to roll out these member rates was announced in May, and the rates were prompted by the company’s desire for more profitability, and less reliance on online travel agency distribution.
During Choice Hotels’ first-quarter 2016 earnings call, then-CFO David White said, “You’re going to continue to see us try to drive business to our channels simply because they’re dramatically more profitable than an OTA trying to suck 15 percent to 20 percent out of the deal. And so we’re not anti-OTA, but we are not at all happy with some of their practices and we’ve never been happy with their pricing. We think it’s overrated for what they provide.”
White resigned from his post as CFO in early June to pursue other professional opportunities.
Skift recently spoke with Choice COO and president Pat Pacious about the new rates, and Pacious said he believes this trend will only continue to grow among the major hotel companies.
“The online distribution space continues to be a very fluid space,” Pacious said. “A lot of the hotel chains, including us, have gone to a book direct rate for our loyalty members. Brands are taking back a little bit of the distribution, and we also want to have the best rates on our websites. A lot is going to go on in that space.”
Since last summer, Choice’s main U.S. brand competitors, all of whom are its partners in the hotel booking site, Room Key, have also embarked on their own campaigns urging consumers to book direct, to varying degrees. The most vocal of the bunch is, arguably, Hilton, which has invested heavily in a major advertising campaign, telling guests to “Stop Clicking Around.”
It’s not clear yet whether Choice will follow Hilton’s lead by launching a similar consumer marketing campaign.
To make this new member rate more appealing, Pacious also said Choice has invested heavily into revamping its loyalty program, which currently has 27 million members. The new enhancements mirror similar the instant, smaller rewards and more retail-driven approaches to loyalty that are part of the member programs at Wyndham and Red Lion Hotels.
“Back in January, we launched a new program,” said Pacious. “Points don’t expire. We’ve increased the value of our points. We offer instant rewards now. Consumers today want instant gratification. When you stay with us, we’ll give you an Amazon or Starbucks gift card, etc. It’s all about providing features that guests who are traveling with us want and they want immediately. That’s responding to what the consumer expectations are. They want instant gratification.”