Cynthia Frebet, Author at ��Vlog.

Travelers Prefer Hotels, But The Door Is Open To Other Options

Cynthia Frebet — Mon, 14 Jan 2019 09:00:00 +0000

The recently released 2019 U.S. Travel Trends Report from ��Vlogand Mastercard reveals recent trends in the accommodation preferences of American travelers.

According to the report, hotels continue to be the preferred choice of accommodation when traveling. 74% of those surveyed said they preferred staying in hotels because everything is taken care of. However, survey takers also expressed an openness to alternative accommodations, such as renting a room through Airbnb. 44% said these types of accommodations allowed them to afford travel and 39% said that such arrangements made them “feel like a local.”

The survey revealed generational differences in preferences. The younger generations expressed more openness to using sharing economy services. 62% of Generation Z respondents said they were open to these services, as did 56% of Millennials. Less than half of Gen X survey takers felt the same (47%) and only 30% of Boomers would consider an alternative accommodation.

These responses show that nearly half of all travelers overall may choose between hotels and other types of accommodations on a trip-by-trip basis. Renting a room from the sharing economy may appeal to travelers when traveling to certain locales, when traveling in groups, or while on a budget. Other times, the central location of a hotel along with the amenities provided are preferred.

As alternative accommodations have grown steadily in popularity, OTAs have expanded their offerings to compete with Airbnb and others. Booking.com claims to have 5.5 million such listings on their site, matching the number on Airbnb. Expedia, which now owns HomeAway, has nearly 2 million listings. Continued growth is expected and the ��Vlogreport predicts that OTAs will shift their offerings to include more discounts, rewards, and reviews in order to make travel more affordable and locally driven (for more on this topic see our previous article – Getting Into Each Other’s Business: Airbnb, OTAs & Hotels).

For the consumer, OTAs expanded offerings make it convenient and easy to book either hotels or alternative accommodation in one place. They can also offer an added layer of trust and security not always available through other channels. OTAs that use the merchant model of payment in combination with virtual card numbers (VCNs) can provide travelers with a secure method of payment while protecting their data as well. In this model, the consumer pays the OTA directly, rather than passing along their personal card information or bank details to an unknown property owner.

The OTA then uses secure, one-time-use VCNs to pay the property owner, with the ability to set controls that limit when and how much can be charged. The virtual payments solution is a win-win for both customers and providers—helping to protect both parties against fraud and misuse.

Payments fraud in the travel industry is a growing concern. Fraudsters have heavily targeted both hotels and the sharing economy, making travel consumers wary. Travel companies that can both provide a wealth of accommodations options along with a safe and secure method of payment can gain the trust, and loyalty, of travelers (for more see: Data Breaches at Major Hotel Chains Hit the Travel Industry).

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Getting Into Each Other’s Business: Airbnb, OTAs & Hotels

Cynthia Frebet — Mon, 15 Oct 2018 18:55:00 +0000

Hotels and OTAs are offering short-term rentals and Airbnb is listing hotel rooms. Why? This spring, Airbnb’s managing director for Europe, Middle East and Africa, Jeroen Merchiers, told a Skift Forum Europe audience, “The concept of home sharing and staying in a flat instead of hotel room is . It’s not just millennials anymore—it’s pretty much everybody.”

Phocuswright shared research early last year that found “the private accommodation segment has .” Douglas Quinby, vice president of research, said, “The segment’s shift online, the expansion of the concept to include private homes in urban markets, the entrance of OTAs, and numerous innovative startups have all contributed to powering a period of tremendous growth,”

Airbnb attracting new customers

It may have begun as a “,” but Airbnb is now a $30 billion company. Announcing its new Airbnb Plus and Beyond by Airbnb tiers at the start of the year, Airbnb proved it’s looking to gain customers who likely before.

Airbnb Plus homes are inspected in person by Airbnb staff and they come with a support team. Olivia Solon explains, “Beyond by Airbnb is a standalone site based on the company’s acquisition of Luxury Retreats in 2017. It will offer , including optional concierge services.”

These new tiers come on the heels of Airbnb Experiences, launched in late 2016, for tours and activities as well as Airbnb’s entry into restaurant reservations. Another way Airbnb is competing with OTAs and hotels is with its new Superguest loyalty program, which offers discounts, flight upgrades, lounge access and airport pickups.

OTAs gaining ground

Earlier this year, Susan O’Driscoll, writing for Netaffinity.com, said “ of the global home-sharing market, compared with 12 percent for Expedia and 9 percent for Priceline (Booking.com).”

OTAs, such as Expedia and Booking Holdings, are taking advantage of the growing demand for short-term rentals by working hard to increase their inventory. This is great news for individual owners or managers who don’t have the budget to attract as many potential renters as an OTA does. Also, when properties are listed with an OTA, travelers can trust that the transactions are secure.

In 2015, Expedia gained 2 million rental units in 190 countries when it acquired HomeAway Inc. Two years later that investment brought in $224 million in revenue, over 2016. At the end of 2017, Booking.com’s foray into the short-term rental market saw a 53% year-over-year increase. The company recently “announced that it had 5 million ‘alternative accommodation’ listings on its platform—a number which ’s amount of apartments and homes available for rent.”

Hotels take on home sharing

How can hotels differentiate themselves from Airbnb, HomeAway, VRBO and others? Hospitality.net lists three areas that “the hotel industry as a whole should be playing up” – . They explain that hotels “have an advantage with central locations and easy access to transportation.” Perhaps the biggest advantage for hotels is service. As Kyle Killion writes, “The staff that sometimes is seen as a cost center is really one of the most valuable distinguishing factors in favor of hotels.”

Even so, Marriott, Accor Hotels and Hyatt have jumped into the home sharing/short-term rental arena. Accor Hotels bought three companies, now all under the OneFineStay brand, and Hyatt’s Unbound Collection includes Oasis, which it invested in in 2017.

Marriott’s pilot with Hostmaker is a little different. They’re offering 200 London homes that have been “.” The accommodations offer “one or more bedrooms, full kitchens, and laundry facilities, and adhere to Marriott’s exacting standards regarding safety, design, security, and service.” Guests can also enjoy other services, “such as 24/7 dedicated phone support and an in-person check-in/welcome experience. “

Booking options make a difference

Hotel rooms and short-term rentals do have their differences. Guests don’t walk into the front door of a home sharing location and . But, since short-term rentals are predominantly booked online through an OTA or a company like HomeAway, VRBO or Airbnb, this accommodation “category is .”

Making it easy for travelers to book is critical. Lodgify.com reports, “almost is instantly bookable, along with over 60% of rentals listed on Tripping.com.” And HomeAway notes that travelers often make last-minute plans and don’t have time for back-and-forth communications with hosts, adding “as marketplaces begin to consolidate inventory, travelers will view instantly bookable hotels alongside private accommodations. Removing the barriers for a traveler to book is mandatory if vacation rentals are going to compete.”

There are other considerations that travelers will need to take into account when considering the many options in accommodations. For instance, what role do home sharing hosts play? Do they add to a more authentic experience? If the guest never meets them is that the same as “?”

As the competition between hotels, OTAs and home sharing companies grow, it’s expected the lines between them will blur further and aspects of each will appeal to one traveler versus another. And those differences are likely to get plenty of attention. Will home sharing service fees play a role or will they offer discounts? Will the support teams put in place by hotels be as much a part of the experience as private accommodation hosts? Will guests who book hotel rooms via Airbnb be able to pay at the hotel?

An opinion piece for hospitality.net nicely sums up the current state of accommodation: “As an industry we need to remember that travel is about the people. Airbnb succeeded by bringing the human element back into travel, not from just ‘staying like a local’ but by providing a space for people to stay together. The traditional hotel mindset of one-size fits all one king, two queen hotel room needs to change” And it certainly is.

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Authentic, Experiential… All-Inclusive?

Cynthia Frebet — Mon, 20 Aug 2018 09:00:00 +0000

All-inclusive vacations have come a long way from the long buffet lines and less-than-stellar accommodations of twenty years ago. The all-inclusives of today provide everything from great food to romantic getaways to family friendly fun – with the ease and convenience of having everything at one price, and usually one place. The hottest trend in the category, though, goes in a surprising new direction – by getting travelers off the resort.

While certain brands, particularly Sandals, have long offered excursions into local areas for an additional fee, the new trend is building experiences right into the price. For example, the in Riviera Maya Mexico offers select local tours in the all-inclusive rate that focus on destinations where locals are more likely to be found than tourists. , also in Mexico, offers access to its eight eco-parks as well as immersive experiences into local Mayan culture – at no additional cost to the guest.

These examples prove that the industry is finally acknowledging that travelers have more complex needs than they’re often given credit for. While all-inclusives typically cater to the “fun in the sun” crowd, and experiential travel companies focus on high-octane adventures, many travelers are actually craving something in the middle. In fact, this new model fits the needs of nearly every major travel segment, from millennials to boomers to solo travelers. Here’s how:

that polled millennials from the UK, US, and China confirms what is commonly known. At least 81% from each geography said they were “looking for an adventure” while they traveled and were “looking for a unique travel experience.” They don’t want cookie cutter experiences. At the same time, it’s well known that to make their travel decisions and are . Any company that can combine adventure and convenience is likely to attract members of this financially significant cohort.

Gen X’ers, on the other hand, will find different benefits to these new types of all-inclusives. Gen X’ers are likely to be traveling with their families, and they also likely to spend more on travel than other generations. A recent survey showed that 62% of Gen X’ers were interested in going to an all-inclusive resort with their family in the future. Resorts with unique experiences built in will provide the additional draw of giving the whole family a trip to remember, while providing essential conveniences for traveling with children, such as on-site dining.

Baby boomers, perhaps are full of the most surprises. shows that boomers are beginning to shift away from traditional relaxation vacations and more toward those with some adventure aspects. Some 38% are still seeking relaxation, though, so a resort that offers both could be very appealing. All-inclusives also meet the mark on providing peace of mind about the total cost of the holiday.

And finally, experiential all-inclusives fill a need for travelers who want to be more adventurous but don’t yet have the confidence to go it completely alone. Solo travelers, particularly women, may find such resorts a good starting place for getting their feet wet in more adventurous pursuits.

As the travel market continues to evolve, one thing is clear: travelers don’t always fit into one mold or another. Travelers have complex needs and often want to balance both relaxation and adventure. The growing popularity of experiential travel, along with the parallel growth in all-inclusive holidays, perhaps provides a glimpse not into two unique sets of travelers, but into different aspects of travel that the majority are seeking – and now finding.

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Tours & Activities And OTAs: Partnerships With Benefits

Cynthia Frebet — Mon, 02 Jul 2018 09:00:00 +0000

The flurry of recent acquisitions and investments has made it clear – the tours and activities sector is now even more attractive to OTAs. Some of the largest players, including Booking.com, Expedia, TripAdvisor, Ctrip and Airbnb, have either purchased companies or expanded their tour and activities offerings.

A 2017 states, “For tours and activities (T&A) to come of age, it first needs to move out of the stone age and into the digital world.” Last fall, ��Vlogtook a look at this sector and the need for and challenges to moving these bookings online. Much has happened since then.

FareHarbor, which includes nearly 5,000 tour and activity providers in the US, drew the attention of Booking Holding. In a recent piece by Dan Peltier on r, CMO Pepijn Rijvers said, “If you look at this experiences space, from a technology standpoint this is a very immature segment still.” Adding, “We think with this technology from FareHarbor we have a really well-functioning platform.”

the company is interested in “more actively upselling customers who had already booked a flight or hotel on Expedia with an activity” and is “looking at making offers to guests while they are in a destination, via Expedia’s mobile app.” He also recently announced, “In the first quarter of 2018 .”

Late last year, Ctrip signed a strategic partnership agreement with Big Bus Tours, “the world’s largest operator of open-top sightseeing tours.” In a Ctrip press release the company stated they will work on “product diversification to ensure customers are able to have more access to tours options” and a “” in the 19 cities (on four continents) that Big Bus Tours serves.

“Strong internal growth dynamics, in part driven by consumers shifting to experiences”
Accelerated move to online booking (majority still offline)
Sector changes are “happening at a time of consolidation for the largest, hyper-competitive global travel brands”

Moving tour and activity bookings online won’t happen without some challenges, but the opportunity is sizable. Phocuswright estimated growth of “.”

In its , Skift finds that while these travelers represent 20% of the US population they “account for 51 percent of US travel-related spending.” When it comes to choosing how to spend their money, , which is an 8% increase over the previous year. In addition, 75% of affluent travelers have “participated in at least one organized tour or activity.”

Low online T&A penetration has potential for companies who are able to successfully aggregate inventory from suppliers while observing local market circumstances. A 2018 ��Vlogwhitepaper, finds opportunities for both travel companies and suppliers, noting travelers want to book online in advance and last minute. “This is driving suppliers to adopt technology to allow for online distribution which presents an opportunity for travel companies. 71% of suppliers expect the online reseller channel to grow.”

And the tour and activities as well. Writing for this group on Trekksoft.com, Nicole Kow suggests, “Both Viator [TripAdvisor Experiences] and Expedia…have developed their online marketing and booking capabilities to maximize conversions…both companies offer a lot of visibility and reach, promising to put you in front of thousands of eyeballs each month.”

Noting that commission rates replace marketing costs when working with OTAs, Kow adds, “the chances of you attracting the same volume of browsers as these marketplaces do is slim at best. It takes time, energy and expertise, something that Viator and Expedia have perfected over the years.”

We can expect to see much more tours and activity action in the short term. There likely will be more mergers and acquisitions and OTAs will continue to expand their product offerings. Seth Borko, senior research analyst for Skift Research sees a pattern in which OTAs “hope that this to their platforms. More travel products bring greater consumer demand onto their platforms, which in turn attracts new suppliers and gives the OTAs greater pricing power. Greater supply at a lower price brings even more consumers to the platform, and the cycle repeats itself.”

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Accommodation Attitudes Of US Travelers Evolving

Cynthia Frebet — Mon, 28 May 2018 15:15:00 +0000

��Vlogand Mastercard recently partnered on a survey of US travelers, identifying attitudes and preferences across a range of travel topics. The 2018 Travel Trends Report confirmed travelers’ accommodation selections are changing, and it found some interesting differences between the generations.

“The evolution of the sharing economy, particularly within accommodations, has made it possible for segments like Gen Z and Millennials to travel more frequently without relying on Mom and Dad to foot the bill,” states the report. “The success of companies like Airbnb and HomeAway hasn’t dissuaded travelers from traditional lodging options as much as it has whet younger generations’ appetite to travel.”

More travelers opting to rent room than bunk in guest room

Traditional hotels will continue to be the top choice in 2018, according to the survey’s findings. As a share of accommodations, stays in all types of hotels/other rented lodging was 70.9% last year and respondents estimate that will increase to 79.4% in 2018 versus 29.1% for “stay with family/friends” in 2017 and 20.6% in 2018. Overall, the report predicts an increase in apartment/home rentals, resort destinations and luxury hotels.

In our earlier post, From Gen Z to Boomers: Reasons For Travel More Similar Than You May Think, we noted that visiting family and friends was a strong motivator to travel, but the report also found that travelers likely don’t want to stay with the people they’re visiting. Across all generations surveyed, that accommodation option dropped significantly.

Seventy percent of respondents agreed that they “prefer to stay in a hotel because everything is taken care of for me.” The other survey statements that had high levels of agreement were:

Staying in a hotel makes me feel like a tourist (54%)
Open to using alternative accommodation services, like Airbnb, to rent a single room from a host (49%)
Using alternative accommodation services allows me to afford travel (41%)
Using alternative accommodation services makes me feel like a local (37%)

Both subtle & major difference between generations

The ��Vlogand Mastercard 2018 Travel Trend survey results point to changing preferences in the younger generation with only slight adjustments in older generations.

In 2017, the category of hotels/other rented lodging with the highest share (15.8%) for Gen Z was “economy hotel.” That group expects “luxury hotel” to be their top choice this year (18.1%). Millennials also used economy hotels the most (15%) last year and will be staying at those properties again this year (15.3%). Both of these groups predict increases in their use of all hotel types and apartment/home rentals.

Gen X and Boomers cited luxury hotel as their top choice last year, 23.8% and 21.1%, respectively, with little change in share for 2018. They each will increase their use of apartment/home rentals. Gen-Xers see a slight decrease in a couple hotel categories and Boomers will make minor adjustments in their choices this year.

In terms of preferences, all generations agree they choose hotel stays for ease and convenience (everything is taken care of). Gen Z had the highest rate (78%) and the lowest was Millennials at 65%. Expedia’s recent report finds connectivity is part of Gen Z’s expectations when choosing a hotel, “Wi-Fi is an absolute necessity” for one-third of them, and “they are often willing to select hotels based on free Internet access.”

Peter C. Yesawich, vice chairman, emeritus of MMGY Global wrote about the company’s that “consumer preferences for both the type and brand of lodging accommodations continue to evolve.” He notes, “Preference for all-suite lodging is highest among Gen-Xers, Boutique lodging is preferred by more affluent millennials. Millennials also express greatest preference for bed-and-breakfasts and greater interest in ‘shared economy’ accommodations.”

Private accommodations a growing choice

While alternative accommodation services show an increase with all generations, the highest is Millennials (3.6%) and the lowest is for Gen X (1.4%). For all respondents, the overall share of apartment/home rentals will increase by 2.7%.

Taking a look at some of the attitudes that influence the decision to choose an apartment/home rental, it’s not surprising where the generations fall.

Gen Z and Millennials are the most open to using the service (both 57%)
Millennials feel by using alternative accommodation services they can afford travel (56%)
Millennials also find that alternative accommodation makes them feel like a local (50%)

Interestingly, those who most feel that alternative accommodation won’t be as advertised were Gen X (32%). They also had the highest concerns about safety (26%), though all generations were fairly close on this issue.

A part of an international survey, Accenture found that for all travelers “price is the top driver of consideration and choice” when selecting to stay in private accommodations, but for US guests it’s the unique experience. They also found that the US “has the highest number of leisure travelers exclusively choosing private condos (23%) and private houses (19%).” Research by Skift found that one-third of what their defines as “avid travelers” used Airbnb during a leisure trip at least one time.

In a late-2017 post about this research, : The continuing rise in popularity of alternative lodging companies, exemplified by Airbnb, means that today’s travelers have more choices than ever when it comes to selecting their travel accommodations.”

Mainstream travel companies are also moving into the alternative accommodation space. Booking Holdings is leading the way; in April 2018, it was disclosed that now has more than 5 million listings of homes, apartments and other unique lodgings – a figure that puts it ahead of Airbnb, .

Younger travelers age, increase their income and have families, which may influence their future accommodation choices. Older travelers are increasingly considering and booking alternative accommodation services. Travelers may have more choices than ever before, but the new options don’t appear to be impacting the traditional ones. Probably more likely they’re impacting stays on relatives’ sofa beds.

Download the full 2018 Travel Trends Report.

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Extreme weather and changing travel patterns require flexibility

Cynthia Frebet — Mon, 09 Apr 2018 09:00:00 +0000

Climate and weather are key factors when deciding where to visit, what to do while you’re there, how much you’ll enjoy the trip, and sometimes, how safe you’ll be. When booking a trip, tourists plan for a destination’s general climate, but during their trip they’ll be affected by the specific weather at that time, which may be very different.

As temperatures increase around the world, some destinations will be wetter and others drier. And that means extreme weather is expected to increase. Susanne Becken, PhD, professor of sustainable tourism at Griffith University notes, “Tourist destinations will benefit from understanding potential climatic changes in their area and how they might impact their operations.”

The new normal

Some destinations have always had , and that’s part of their appeal, like the US’ Death Valley and Svalbard, Norway. But, unexpected extreme weather, such as major hurricanes and snowstorms, is a different story.

A few years ago, the Insight Department of VisitScotland produced a paper, ” It reported that “the seeming plethora of extreme weather events in recent years, and the linking of this pattern to climate change, has led to them being described as ‘the new normal’.”

The impact of extreme weather on travel is one of , and in a piece earlier this year, Dan Peltier took a look at the topic, writing: “Recent storms like Irma and Maria brought entire islands including Barbuda and Puerto Rico to their knees, and for many western travel companies, the harsh realities of climate change suddenly felt much closer to home and brought new lessons on how to communicate with travelers during a storm.”

Shifting flow of tourism

VisitScotland (which acknowledges people don’t visit Scotland for the weather!) addresses a misconception that our changing climate means areas will get a bit warmer. “If the researchers are correct about the jet stream becoming more erratic, the UK, being situated underneath its path, is , including heavy rainfall and droughts as well as extremes of temperature, including cold spells. The idea that the UK will simply shift gradually to a warmer climate is misguided.”

And, yes, some destinations may benefit from increased warm weather, but as Mike Hower writes in The Dirt on Tourism and Climate Change, “Even tourism businesses that benefit from warm weather could suffer from a warming planet. While businesses in the tropics might enjoy longer beach seasons, warmer temperatures in the mid-latitudes could reduce tourists’ motivation to travel there, opting instead for nearby destinations.”

A post by Victoria Tourism Excellence in Australia a few years ago noted, “climate change is likely to pose a profound challenge in some Victorian tourism destinations, while providing opportunities in others,” including an overall extension of peak and shoulder seasons, but a shorter snow sport season. Plus, “the potential impacts on ecosystems could affect the natural beauty of certain destinations with distinctive landscapes, and increased risks of bushfires, drought and other natural disasters could threaten the future viability of many tourist destinations and businesses.”

Changes in climate and weather have also created “last chance tourism.” Travelers want to see things that are vanishing because of climate change, including the Great Barrier Reef and . In 2014, Tom Bastek wrote for , “Some condemn the tourism saying that the trip to Greenland added to the CO2 that is contributing to the ice melt and others will say that it is good for people to see the damage that is being done so that they can go home and tell others.”

In addition to changing patterns and flows, extreme weather and climate change are expected to lead tourists to increasingly “, such as the likelihood of a cyclone, how far their bungalow is from the beach, is their hotel in a flood zone, and so forth.”

Seeing real impact

Researchers in the UK surveyed travelers in 2015 to find out how extreme weather influenced their travel plans. Of the 2,000 Londoners and Glaswegians who responded, 740 (nearly 40%) reported a total of more than and natural events over the previous three years.

Another survey conducted by found that almost 70% of events held in 2012 “were adversely impacted by the weather. Most of these experienced reduced attendance. Other impacts included increased infrastructure costs, increased build and break-down/site reinstatement costs, increased financial risk and delays.”

When extreme weather changes travelers’ plans and keeps them from visiting a destination, the economic effects ripple through the area. For example, the drought in the western US has reduced snowfall in the Lake Tahoe area of California and Nevada, affecting the area’s $1.3 billion sports and recreation industry. Limited snow has been directly tied to “record-low attendance at ski resorts, which in turn harmed restaurants, hotels and other businesses accustomed to servicing customers drawn by snow sports.”

And extreme weather can have a lasting impact on a destination after the event itself. Fifteen years ago, a European heat wave that was responsible for tens of thousands of deaths created a significant shift in traditional tourist flows for several years.

Be ready to adapt

According to the United Nations World Tourism Organization, “For tourism, climate change is not a remote event, but a phenomenon ‎that already affects the ‎sector.” Interestingly the affects aren’t expected to create a net loss in demand for tourism, but will likely lead to increases in demand for alternative destinations.

Destinations need to plan for not only the long-term major impact of climate change, but also the more immediate (and likely more frequent) impact of extreme weather. Travelers will look for companies that offer flexibility and travel companies will benefit from working with partners, like WEX, who can help them quickly adapt to new patterns and the changing flow of tourists from one part of the world to another.

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Travel Loyalty Programs: Looking Beyond The Points

Cynthia Frebet — Mon, 05 Mar 2018 09:00:00 +0000

Major hotel brands have been aggressively pushing their travel loyalty programs over the past few years. And, at the same time, Online Travel Agencies (OTAs) have rolled out new or improved rewards programs. Is all this effort impacting the number of “loyal” travelers? Do these programs still matter?

Brandie Wright, , reports, “Half of US leisure travelers now belong to a hotel loyalty program, up 10% from 2014. This membership rate is higher than both the air and OTA segments.” The company also found that many travelers belong to more than one program—OTAs are the top choice for those with one membership and hotels are number one for those with two or more memberships.

Personalized Rewards

But, there’s much more going on with loyalty programs. In an interesting tnooz.com article in late-2017, digital analyst and consultant Simone Puorto references a J.D. Power study that found when loyalty points can be used for more than hotel stays, for things like shopping and special event tickets.

In that same piece the author writes about an “important shift in loyalty programs” that he describes as “the drop of the one-size-fits-all-approach in favor of reward personalization: business travelers prefer to accumulate points to redeem them during their vacations, while tourists prefer immediate gratifications and on-site recognition, such as complimentary upgrades, welcome drinks or gift cards.”

Melia Hotels International offers members an online store to earn and redeem points with a wide range of retailers, including Amazon, where Hilton Honors members also can shop with their points. Choice Hotels members can redeem points for digital gift cards and Marriott allows members to redeem points instantly during their stay.

Lower Rates Frequently Favored Over Loyalty Programs

Updated hotel loyalty programs may have increased membership, but the consensus seems to be that they aren’t harming OTAs. Weighing in on hotel programs and OTAs, the Trefis.com team explains why OTAs shouldn’t worry. “Hotels remain more dependent on the OTAs than they’d like to be. The size and scale of the OTAs, their significantly bigger hotel networks, superior marketing, and technological strength are some of the reasons why customers prefer OTAs to direct booking.”

According to Mark Ross-Smith, editor at TravelDataDaily.com, “OTAs already have a strong reputation for having the lowest rates – and despite what major hotels are trying to tell the world – it can still be cheaper to book through an OTA under the right circumstances. However as hotels move to compete on the battle ground which OTAs are known for (best pricing), this opens a new, larger and lucrative to move in on the hotel’s traditional turf – loyalty programs.”

Leading OTAs Developing Loyalty Programs

OTAs have certainly moved more deeply into the loyalty program arena. Expedia and Orbitz give travelers options to redeem points immediately and both offer branded credit cards. Orbitz Rewards Visa customers earn up to 10% back in rewards and receive “Orbucks” for non-Orbitz purchases. Depending on your membership level with either Expedia or Orbitz, you may earn free breakfast, reduced resort fees, reimbursement for checked bags, spa discounts, free drinks or flexible check-in.

Hotels.com has a straightforward rewards program—stay 10 nights, get 1 free. And Booking.com’s Genius program gives travelers a 10% discount after 5 stays in 2 years. Properties need to be part of the Genius program and the perks and freebies vary by property.

Writing for Skift in 2017, Dave Montali notes “OTA reward programs offer than traditional brand-based memberships might,” and adds that being loyal to your traditional loyalty program can be a challenge when you have to deal with “hurdles such as extensive blackout dates.”

Another voice touting the strength of OTAs in this loyalty battle is Ross-Smith who acknowledges OTAs “may be feeling the pinch over the book direct campaigns,” but he sees an —data. They have volumes of data on their customers, the hotel rooms and flights they book and how and when they book. “Plotting this business intelligence out could show an interesting loyalty composite score not available to airlines or hotels. This data architecture would then allow for more accurate insight on spend and loss probability of new business, market trends and segmented consumer traits.”

Big name OTAs may be introducing loyalty programs to compete with hotels and drive repeat bookings, but private accommodation sharing leader Airbnb has no plans to follow suit. Airbnb co-Founder, Nathan Blecharczyk, told attendees of the 2017 that the company had considered one. However, as , the company has no trouble attracting repeat bookings – Airbnb’s desktop repeat booking rate for the first half of 2016 was almost 5 times that of leading OTAs and 3 times that of top hotel brands.

While Airbnb might not need to worry about winning repeat bookings, loyalty programs are an important tool for OTAs and suppliers in achieving repeat bookings. Such loyalty programs have evolved over decades and the current iterations reflect a more responsive and consumer-friendly model, which probably means loyalty programs are here to stay.

For more like this see ‘OTAs vs. Direct Booking: Rivals or Competitive Teammates?’.

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Cynthia Frebet, Author at ����Vlog.