Originally Posted by
BrightlyBob
Context is everything. Whilst what you say is true, that element of the contract indemnifying Marriott for LNF claims only applies to “dynamic packages” utilising “unpublished rates” where the contract stipulates that the package must be sold as a whole (ie flights and hotel; hotel and tours; hotel and car hire) where the price of the hotel room portion must “at no time be visible, apparent or known” to the end-customer.So yes, in that restricted unpacked “package holiday” situation the TA could end up on the hook for LNF claims but I’ve never made a claim by stripping down a package, I doubt many here have. This doesn’t prove that OTAs are on the hook for the costs of all successful LNF/BRG claims, very, very far from it...
And how do you think OTAs get ahold of hotel room nights to sell? Do you think they just spontaneously show up on OTAs’ websites out of thin air? Or maybe you suppose the OTAs’ fairy godmother comes about every now and then and just drops a few hotel room nights under the OTA’s pillow? The only Marriott-authorized way for an OTA to sell rooms-only to an end consumer is through commissionable rates. These rates are at BAR and paid directly to the property (prepaid or postpaid), which then pays the OTA a commission on that sale. However, because commissionable rates aren’t very competitive OTAs use wholesale rates to sell directly to end consumer against Marriott’s policy. That’s where most, if not all, BRGable rates come from. They were never “packaged” to begin with. That’s why, as you naively put it, you never stripped down a package. Of course you haven’t! It would be extremely asinine to actually believe that that contractual provision is aimed at preventing end consumers from unbundling the tour packages they bought from very policy-compliant OTAs. What happens is this: the OTA buys from Marriott (or from a Marriott-approved wholesaler) a heavily discounted rate (some say up to 60%) on the condition that it must bundle that room stay into a packaged tour and to never sell it as room-only directly to end consumers. And what does the OTA do? It sells that rate directly to the end consumer as room-only. Why does the OTA do that? Mainly for three reasons: better margins than selling on a commission; ability to have a competitive advantage in the online market and, mainly, because in order to have access to those discounted wholesale rates, wholesalers have to meet minimum sales quotas or Marriott claws back part of the discount. So OTAs will try to meet that quota by not packaging the rates and selling them directly to the end consumer. Marriott is fully aware of that and usually will not enforce its policies. More often than not properties will just take the hit and eat up a BRG rate (they’re not so frequent anyway) as collection of compensation can be time consuming and may create ill-will with an otherwise amicable OTA. But you can bet that if the revenue lost on a BRG rate is significant the OTA is going to pay up. I once had BRG claim approved for a multiple room 15-night stay at a LC resort for less than half the published rates for those same nights. On that stay alone the hotel had a $7k loss of revenue (they calculate that by deducting the BRG approved rate from the rate you booked to file the BRG; that’s why you always have to book the lowest available rate to submit a claim). I know for a fact that the resort collected this rate difference from the OTA and that the OTA never again carried that resort in its inventory.