Hotel chains spend a lot of money on marketing to get you to book a hotel room using its website or app and have resorted to the “carrot and stick” approach to achieve that goal. On the one hand, they’ve gone out of their way to market “Member Exclusive Rates” only available to loyalty program members. They also offer “Best Rate Guarantees” that claim if you find a cheaper rate after booking with them, they’ll match it and lower the rate even further. At the same time, the hotel chains penalize you for booking anywhere except with them. Some of these “penalties” are they don’t recognize your loyalty status or let you earn points in their program if you book anywhere else. They’ll also only give perks like free Wi-Fi if you book directly with them.
When I say you need to book directly with the hotel, I mean you use the hotel’s website, the hotel chain’s website, the smartphone app for the hotel chain, or call the hotel to make a reservation.
When I mention using an “external” website, that’s everything else. Websites like Expedia, Travelocity, Orbitz, Hotels.com, Priceline, Hotels Tonight, Hotwire and Booking.com or a credit card portal like Capital One Travel are just some of them. If you’re completing the booking anywhere but with the hotel, it’s an external website.
Hotel search engines like Trivago, Kayak and TripAdvisor show you prices directly from the hotel as well as from external sites, so it’s best to use something like that to see who has the lowest price.
So, should you only book your hotel rooms directly with the hotel even if an external site is less expensive?
This is one of the situations where Your Mileage May Vary.
It’s totally worth a few extra dollars to book direct for a frequent traveler who’s trying to get enough stay credits at a hotel chain to achieve status. After all, they’ll get stay credits and earn points, which will help them reach the status level requirements (usually a certain number of nights stayed or a total number of stays over the year). If you already have status, you’ll also get additional perks at the hotel like upgraded rooms and/or free breakfasts, but only if you book directly with the hotel. Those of you in this category most likely didn’t even get this far into the article or if you did, you answered with a definitive, “Yes, of course it’s worth it.” I’d tend to agree with you.
For an infrequent traveler like me, it’s a different equation. I’ve already said how I love not having to be loyal to a hotel chain (or airline). It lets me book with whatever hotel chain or independent hotel fits my needs without having to worry about not reaching a certain number of stays at any hotel throughout the year. However, I do have status with some hotel chains simply by having certain credit cards. If I don’t book direct, I won’t get any of those benefits and I also won’t get any points (or extra points from promotions) for that stay. How much do I need to save to give up those perks? Well…
What do I have to gain (or lose) by not booking direct?
Access to Member Exclusive Rates
I’ve checked out these “Member Exclusive” rates compared to other rates I’ve found. They’re less than the hotel’s usually listed rate, but I can’t remember a time when the AAA/AARP discount rate wasn’t even lower. AAA/AARP rates almost always can be canceled up until 1-2 days before the stay (depending on the hotel) and only require you to pay at the hotel, not in advance.
Best Rate Guarantees
This is the part where the hotel chains tell you, “If you find a lower rate anywhere else, we’ll beat it!” Sound familiar? Sort of like a car dealership or mattress store ad on the radio, right? When you hear those ads, do you really believe it will be that easy to get them to match the price? Of course not. So why should it be any different with hotels?
Actually, when these guarantees first started, hotel chains were good about honoring the guarantee. At least it meant you were looking at the hotel site and comparing prices and that’s what they wanted. It also seemed, at that time, there was more chance the hotel’s listed rate WOULD actually be the same or lower as prices listed on external websites.
As early as 2014, websites started to write about how hotels were “devaluing,” or as the hotels called it “clarifying,” the Best Rate Guarantee programs. Most times this consisted of adding extra hoops to jump through, additional requirements to fulfill and more restrictions, exceptions and other stuff that made filing a successful claim less likely.
Most of the chains (Hyatt, Marriott and IHG) require you to book a room with them first and then put in your claim for a lower rate within a time frame (usually 24-48 hours after the booking). Hilton allows you to put in a claim without a reservation. The chains also require the lower rate you have found to “EXACTLY” match the room you booked on the hotel’s website including the room type, currency, number of beds, number of guests, view and sometimes even the restrictions including cancellation policies and fees. Any website that requires you to log in or download their app to see lower rates are also excluded.
I just don’t find it worthwhile to argue and chase the hotels down to make them honor the guarantee they really don’t stick by. If they wanted me to book directly by making a promise, then honor it and don’t find every way to weasel out of it.
Perks due to loyalty status with hotels
Few of my hotel statuses are top tier (where the really good perks like suite upgrades and free breakfasts start to happen). The list of perks I’ll miss out on reads like this:
- Free Internet
- Priority Check-In
- Upgrade to “preferred” room
- Free bottle of water (daily or once per stay depending on the hotel)
- Late check-out (maybe, depends on hotel)
Here’s the other thing. If you put your loyalty number on your reservation by calling or emailing the hotel, they’ll still know you have status with the chain. They may, but have no obligation to, give you some or all of the benefits you’re entitled to, even if booking through an external website. That’s all up to the discretion of the hotel management (But a quick search of the interwebs will let you know if a hotel tends to do this or not).
Points in the hotel loyalty program
This potentially can cost you plenty of points and be a reason to book directly with the hotel. If you’re eligible for a hotel promotion that will give you bonus points, you need to book directly with the hotel. The loyalty point programs are run by corporate and they most definitely will NOT give you ANY points or promotions for stays not booked directly through them.
Missing out on enough points for a free night isn’t worth saving a few bucks by booking through an external site.
Money
Cash is king. Collecting points and getting perks is nice but there’s a point where saving money is just too tempting to resist. If a price is much lower on an external website, I have to weigh those savings against all the things I am giving up. Some of those are easy to give up. I can tether my iPad to my phone, so not having Wi-Fi in the room isn’t a deal-breaker (thanks, T-Mobile). I can buy a bottle of water myself and an upgraded room is nice but I really don’t need to have it.
More Money
On top of possibly having a lower rate, external websites will often post codes for additional discounts and pay rebates for using their sites. I’ll check what the best offers are on Cashbackmonitor.com. If you’re interested in getting cash back instead of miles or points,
Earning Points with the External Websites
Many of the external travel websites also have their own loyalty programs. While most of them aren’t that great and tend to devalue the points you earn quite frequently, the program from Hotels.com has many fans because it’s easy to use and understand. When you book 10 nights with Hotels.com, you get a credit for a “free night.”
- You choose how you collect 10 nights. Whether it’s a single stay or multiple trips, 10 nights add up fast
- Collect nights in over 297,000 properties around the world
- The value of your free night is the average price of the 10 nights you collect
If you don’t travel much or have no need to collect points, this program is a straightforward way to collect 10% off ALL of your hotel stays.
Final Thoughts
I’ve been so caught up in collecting points and miles that I fell hook, line and sinker for the “Book Direct” pitch. Prices usually were the same on the hotel websites and earning the points and getting the perks were worth a dollar here or there. I’ve recently noticed that when booking stays, external websites are showing rates much lower than the hotel. I’m going to investigate to see if this trend continues and may begin to book my stays wherever I can get the best deal.
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6 comments
This is a good read. One thing worth noting is that a hotel booked through AMEX Fine Hotels & Resorts allows loyalty members to earn points as well as entitle them to the benefits of their current status level. While it likely won’t be cheaper than booking through a third party website like Expedia, Travelocity, etc., it will add other perks like a guaranteed 4PM room checkout and breakfast for two each day. I always check the rates for Vegas hotels before heading there. Although I only used it once when booking at MGM’s Delano property, I really came out ahead with all the benefits (so it never hurts to look and compare). In addition, I was able to earn my Hyatt points and receive all the benefits of my status level with the MGM (MGM and Hyatt have reciprocal agreements that allow for shared point earning opportunities).
Note that this will only work with Fine Hotels & Resorts. A booking made with AMEX’s Hotel Collection Is not guaranteed to earn hotel points or allow a member benefits of their status level (although people have reported that they received them even after booking this way.
Although I’ve found direct booking to be an excellent strategy when it comes to earning points and receiving benefits when I travel, I have several friends who are “brand agnostic” and swear by third party booking websites so it’s most important to do what works best for you!
If the hotel’s web site has a ‘lowest price guarantee’ why would anyone book anywhere else? The post seems counter intuitive. For all the major hotel chains, the lowest price is ALWAYS the web site plus you get loyalty points. I used to work at Expedia and can confirm this. I can objectively say booking chain hotel rooms or flights on Expedia, Priceline is always a bad idea unless the cash back portals are offering a compelling cashback rate.
I’m with you on the bottom line: YMMV.
Sure, there are cases where third party is substantially cheaper and your BRG claim is denied.
But I feel the majority of times it’s better to book direct. Many chains have promos almost year-round (Hilton, Hyatt…) I estimate I get around 10% of the room rate back through points on average. Plus, your elite status (be it only a lowish Gold by virtue of a CC) usually ensures you don’t get the room closest to the trash cans or the one next to the kitchen.
It’s just simple economics that booking direct is cheaper most times. Hotels save substantially if the customer books direct. OTA fees can be as high as 15-20% of the room rate. Instead, a direct booking costs the hotel a mere ~3% or so in fees (to the chain). You’re cutting out the middle man.
I stop being loyal to hotels and airlines about 5 years ago. I can’t justify paying more just for some added elite benefit. Benefits today aren’t what they use to be. Good luck getting cleared in to first class today. I prefer to save thousands and book what fits my needs.
Hotel chains (Marriott! ) won’t enforce the elite benefits you have earned. They don’t honor best rate guarantees. They are slowly making loyalty pointless. Stay where you want. Buy what you need.
I’m missing one angle of valuation. Just like with the local book store and butcher, when I appreciate a hotel, I mostly don’t mind paying a bit extra, if any. If it’s correct the ho(s)tel looses + 10% in fees for a booking via the platform… when you scale this, you may be talking economics in another sense then yours: employment, survive or drown, an owner with a comfortable margin or having to turn around every penny…
Notnsire of this is relevant for the big chains, but fornthe smaller chains and independent hotels, definitely so.