Old Sep 24, 11, 9:26 pm
Join Date: Jan 2007
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Posts: 2,212
I think no one can really prevent 3rd party site from selling at discount no matter what hotels sell them. 3rd party get like 25-35% commission on the rate, so, why not give you 5-10% and get your business? That's why we see coupons on 3rd party sites all the time on all properties. The point of BRG is to direct bookings from 3rd party to their website because seeing BRG promise 99% of people will never double check. So, it's just another marketing tool that has it's cost - free nights for FTers So, if they pick up 3-4 customers per 1 night given under BRG, they are OK. Of course, it benefits all hotels, but only some of the hotels pay for BRG.
Originally Posted by 3544quebec View Post
Hotel companies want all bookings to go through them to maximise their revenue and minimise commission being syphoned off by third parties. That I am sure is why many stopped giving loyalty points and elite benefits to guests who didn't book through the company channels.
They almost certainly have conditions in their contracts with their hotels that the hotel will make the lowest public rate available for booking via the company website and there would be a penalty if the hotel does not do this.
The whole point of BRGs is not about rewarding customers its about punishing non-complying hotels. The only logic behind IHG making their BRG more beneficial to us is that its industry standard BRG of a discount of 10% off any better rate we find was not achieving its goal -ie wiping out instances of hotels providing lower rates to 3rd party sites. So it gives us a bigger carrot to notify it of hotels that are non-compliant with their management contract, so IHG can whack them over the head with this bigger stick.
IHG must have been seeing that there was no increase in the % of bookings coming through its portals despite the 10% discount BRG and surmised that the lower rate was not sufficient deterrent to the hotels to provide lower rates elsewhere.
Of course for this new deterrent to work IHG have to have a management contract that does allow them to penalise the hotels in this way and have to be prepared to put up with some short-term flack from the hotels. But they will only get this flack if the penalty is hurting the hotels and if it hurts the hotels and IHG sticks with it then the hotels will fall into line. Otherwise they will keep losing revenue. When the penalty of giving away all these free nights outweighs the benefit the hotels feel they get from offering lower rates on 3rd party websites they will stop doing it and IHG will have achieved its aim (and we the consumers in the long term will be worse off, with less choice and less competition regretting that we were the instruments that IHG used to destroy this competition for the paltry recompense of a few free nights )

All the problems that people are reporting are problems of implementation of the policy. IHG won't achieve its aim by allowing hotels free choice as to whether they will participate or not although some individual hotel contracts might allow individual hotels to not participate. The BRG desk may even actively look for reasons to deny the claim but behind the scenes I'm sure each claim we make (accepted or rejected) results in a compliance team contacting the hotel and asking why they are selling rooms on cheaphotels.com for less than the rate on priorityclub.com. As I said before this is not motivated by wanting to reward us but by wanting to increase hotel group revenue - if they can do that with us acting as police but only paying one in 5 of us, they would much prefer to do it that way.

The only way that this is not going to work or be withdrawn is if the feedback they are getting from the hotels makes them seriously believe that they are going to drive a significant number of hotels to consider branding with another hotel group.

Its up to us to hold them to the Ts&Cs that they publish.

All of the above of course is solely opinion with no inside knowledge of what is going on
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