While hoteliers have long been trying to wrangle power back
from online travel agencies, Hilton Worldwide in February introduced loyalty
member discounts and perks for booking direct. The move sparked an onslaught of
similar initiatives from other industry players. "We want [our customers]
to get the best value that they can get, get the best experience,"
Nassetta said then. "And we obviously want to lower our distribution costs
for both ourselves and our owners."
Hilton's campaign harkened back to 2014, when industry
players introduced free Wi-Fi to loyalty members who booked direct. Yet,
Nassetta apparently took note of the backlash that followed from travel agents
who felt the decision was anti-business travel. This time, when it launched the
Stop Clicking Around direct booking campaign, Hilton made it clear that
third-party bookings from corporate partners would be allowed. In turn, Hilton
received praise from the American Society of Travel Agents. However, not all
who followed in Hilton's footsteps were as clear with their messaging, and with
every announcement from players like Hyatt Hotels and Choice Hotels
International, came the same question: Would the rates be available to
third-party bookers through the global distribution system and online booking
tools?
The direct booking campaigns' impact on online travel
agencies remains to be seen, and kinks still need to be worked out in terms of
the rates showing up in the GDS and online booking tools. Hilton's loyalty
membership grew 60 percent year over year for the first three quarters, and its
bookings through Web-direct channels increased 28 percent year over year during
the third quarter.
In another experiment, in 2015, the company piloted a $50
penalty for canceling any time after booking, but Hilton abandoned the
initiative because "guests hated it," Nassetta said. Then, in
September 2016, Hilton began piloting restrictive rates that have guests
trading freedom to cancel for deeper discounts. Hilton's willingness to
experiment with rate structures could make it an industry game changer yet
again.