Expedia is now very kindly allowing hotels to offer their normally closed user group member-only rates publicly on Expedia. Red Lion Hotel Group (RLHG), a brand that operates in the US and Canada with 114 properties, is the first to participate in Expedia’s latest initiative.
Expedia displays Red Lion’s discounted loyalty programme rates beside their standard rates on Expedia. If users select the discounted rates, they’ll sign up to RLHG’s “Hello Rewards” loyalty programme automatically. When users book the Red Lion member rates, they’ll get points and benefits for both Red Lion’s programme and Expedia’s membership programme Expedia+ (once they sign up to Expedia+ in the booking process). The benefits for booking include a best rate guarantee as well as “a free night every seven stays, express check-in and late checkout when available, room upgrades when available and more.”
This is a startling move for several reasons. Firstly, loyalty programmes typically exist as a tool for hotels to gain direct, repeated business from guests. They offer discounts, perks, rewards and best-rate guarantees to persuade guests that they’ll get not only the best price but also the best value by booking direct. The close ties of a loyalty programme also give hotels a chance to build a stronger relationship with guests.
Offering membership, points and benefits through a third party, then, would seem to slightly miss the point of having a loyalty programme.
However, Expedia’s high volume platform and highly developed marketing strategy might compensate for that by leading to large numbers of signups, which is how Red Lion feel: their CMO Bill Linehan was quoted by Tnooz as saying that “his brand was too small to go it alone and needs Expedia to reach a range of customers.”
Secondly, what is motivating Expedia to offer this to hotels? The clear advantage is that Expedia can be certain that it has the hotel’s best price on their platform. Rate parity clauses typically demand that hotels offer the same or higher rates on their own site as they do to OTAs. However, hotels can offer better rates through closed user groups – like through a loyalty programme or offline, e.g. over the phone.