IHG Cuts Benefits On Third Party Bookings… Again

One of the major trends we’ve seen in the hotel industry recently is hotels emphasizing that they want you to book directly with them. When you book through an online travel agency, hotels have to pay a big commission, and that’s an area where they feel they can cut costs.

That’s why hotels have been doing everything they can to encourage you to book directly with them.

For example, most of the major hotel chains now offer member only rates, the intent of which is that you get a small discount when you book directly with the hotel. Many consumers are under the impression that you get the best deal through online travel agencies, though now hotels are emphasizing that they have the best rates for their rooms.

IHG-Your-Rate

IHG Rewards Club has just sent out an email to members, explaining their latest change to get members to book direct. This initiative doesn’t come in the form of adding benefits for those who book direct, but rather taking away benefits for those who don’t. IHG Rewards Club has announced that as of January 1, 2017, members must book directly through IHG in order to take advantage of IHG Rewards Club benefits. Here’s the wording of the email:

We’ve made a change. Effective 1 January 2017, members must book directly through IHG® (IHG.com, IHG® App, IHG® brand sites, corporate travel sites, Central Reservations, or Hotel direct) and not through other travel booking sites in order to take full advantage of the benefits that come with an IHG® Rewards Club membership. Why? We want to give you the best travel experience—from start to finish—every time. And we can only do that when you book with us directly.

InterContinental-Tampa

I interpret this as meaning that you can’t receive benefits when booking through wholesale online travel agencies. I suspect programs like Citi Prestige Fourth Night Free, Amex Fine Hotels & Resorts, Virtuoso, etc., won’t see a change in benefits.

In late 2014 IHG Rewards Club changed their program terms to indicate that you could no longer earn points on bookings made through online travel agencies. Furthermore, IHG properties don’t technically have to honor elite benefits on third party bookings, though many still do.

So my guess is that in practice we’re not seeing much of a change here, since technically you already don’t get points or elite benefits on third party bookings. Instead I’d guess that this is more of a marketing technique by IHG than anything else, where they’re trying to do everything they can to get you to book direct.

Lastly, can I just point out how loyalty program marketing drives me nuts? Here’s IHG’s explanation for why they’re taking away benefits from members:

Why? We want to give you the best travel experience—from start to finish—every time. And we can only do that when you book with us directly.

Yep, they’re doing it for you!

What do you make of this IHG change? Am I missing something, or are they mostly just reinforcing the existing rules here?

Comments

  1. I wasn’t aware that IHG offered any elite benefits (no free breakfast, no confirmed suite upgrades, no best room available) other than just extra points to even its highest echelon of frequent guests. We were supposed to see enhanced Spire benefits and Kimpton integration in 2016 but that appears to not be in the cards.

  2. Thank God! I am gonna keep booking direct to receive my welcome doritos bag and bottle of water!! I love the perks of loyalty!

  3. We almost always get an upgrade with Intercontinental and Crowne Plaza properties. At a favorite CP in Europe, where there are only regular rooms and suites, they always give us the suite. Places like the IC in Hong Kong, which has many levels of rooms, we get a one level upgrade. So no Harbor View, but still a better room, even when staying on points/certificates. Our status is only based on having the cc, so really no reason to complain. 😉

  4. I worked for IHG worldwide reservations for many years. When using a third party website for booking your not guaranteed any particular room types. If you need to make any changes to your booking it was almost next to impossible if the reservation was made online, usually you would have to go back through the third party websites. Good luck! I know from the reservations end of it that it’s very frustrating not only to the guest but for the agent. As all we wanted to do was help. Because the reservation was restricted by the website it was a vicious cycle. And why wouldn’t you want your “FREE” points to earn free nights or merchandise? When you need something specific it’s always best to go through the hotel booking system. Besides that you are helping the people who work there, and that helps our economy. In most cases you can get that exact same rate as you saw on the website just ask.

  5. It’s been about 6 years since I last had a hotel client, but IIRC the OTAs were getting ~5-15% of the room rate depending on the hotel’s agreement. As far as the hotel sites giving the best price — that’s crap and they know it. If they did, the OTAs wouldn’t have any reason to exist. Maybe they’ll give an equivalent price now, but that’s only because they’re saving the 5-15% the OTA would have pocketed.

    My guess is that the OTAs have gotten about as much as they’re going to get from the airlines, which they never got much to begin with, so now are trying to get more out of the hotels. The hotels are responding with this, not wanting to piss off the OTAs entirely, but wanting to keep more of the profits.

    With non-flagged hotels, our office often calls the hotel direct to negotiate rates and usually gets a minimum of 15% off, sometimes more. I’ve not seen as much wiggle-room with the major chains unless you’re booking a substantial number of nights (ie: 15 rooms for 7 nights or 10 rooms for 20 nights), then the discounts come fast & furious.

  6. Our company policy requires we book via company’s online travel agency (Concur/ Direct Travel) if we are to be reimbursed basically. So if they are hard and firm on this new policy it will basically result in me not using IHG properties for any work travel, which accounts for 90% of my hotel stays.

  7. I just checked for a specific night in January at a IHG hotel in Amsterdam. IHG price 138 euros, Expedia $64. I do not see how they can claim best price or say that they are doing it for us. And what benefit can possibly make up for that price discrepancy?

  8. I agree with John. It’s really a joke. Booking a lot of times have better deals. Its sad. The 600 points is better than water. But I’m a young looking 36 year old Black male and have struggled several times to get a upgrade. Crowne Plaza has been easier to deal with but I had to write in complaints holiday inn several times. Most times getting response after returned from trip.

  9. @Christopher – you should still be ok with Concur, because the policy exempts corporate travel.

    As far as IHG benefits go, they have the separate Intercontinental Ambassador program, outside of IHG Rewards Club that gives perks at Intercontinental properties, including late check out, guaranteed one-class room upgrade, plus a 2-for-1 weekend night stay annually. Otherwise, with Gold IHG status, I typically get a room upgrade at other properties also. In practice, you can always guarantee yourself a room upgrade to the Club floor to get a free breakfast out of it.

  10. If anyone else is wondering, I contacted IHG and confirmed that they will still allow purchases through business partners like Concur/ Amex to receive the normal benefits and points with no problems. I was pretty frustrated when I first read the email. I would of jumped ship if they didn’t let keep gaining status or points.

  11. I get Starwood Gold from >$30k spend on the SPG AmEx, but I rarely book through any hotel site directly. The 10th night free benefit from Hotels.com is a pretty good deal. I’d prefer to stay at botique brands and get a free night every now and then rather than sticking to the larger chains and getting a free bottle of water when i check in.

  12. @Blake Bailey,

    My husband and I are Caucasian and in our 30’s and we get the same treatment, although I totally agree it feels like discrimination but sadly I think this is just IHG’s M.O! What’s more insulting is when they tell you that your upgrade is to a deluxe room and when you inquire as to the difference between that and the room you’ve booked it’s something like “Oh this room has more towels and an extra roll of toilet paper” like please!!! I’m not an idiot I know they are just lying to make it seem as if they value my Spire status!

  13. @Blake
    I highly doubt that it has anything to do with your ethnicity. I’m of Asian descent and get the same treatment as my Caucasian friends around my age in terms of upgrades/services. IHG Spire can be pretty mediocre at times; but again, I don’t really have to go out of my way just to stay at an IHG property.

  14. I, as a caucasian based in Europe also have found that upgrade policies at IHG very very strange. Sometimes I have had really attractive upgrades, other times, at the same hotel, I have been put into distressed rooms which, if it were my first visit, would have ensured that I never visited that hotel again. I have also been lied to when told I have an upgrade, when I clearly did not have one.

    I am not saying that there may not also be racial factors in the experiences of others but the entire process is so intransparent that its very difficult to be sure in individual cases although I fear it is overall probably true.

    I have been at platinum level for almnost 10 years but my frustration with the “fraudulent” (T&Cs seemingly changed at will of the employees) campaigns, the sometimes insultingly high prices, location problems and poor quality of many HI hotels taken together with the newly introduced requirement of my firm to book through a corporate travel portal means that I will probably drop out of the IHG program in the next two years.

    I will use OTAs for all my private travel and will no longer be driven by a fake status and loyalty program. Freedom!

  15. I’m the same as Christopher, 90% of my travel is booked via a third party for business travel. If they strictly enforce this then there really isn’t any point in staying at one of the many substandard IHG properties (of which, there are many) that I currently hold me my nose and use in order to amass points.

    This has already had the effect of making me look for conveniently situated Hilton hotels and their tariffs (of which there are many and surprisingly cheaper than IHG).

    This is a massive own goal.

  16. i have a few stays coming up in johansburg and cape town in december’16, which are booked by a travel agency (not online travel agency) – will i still have to forego my IHG points? Do regular travel agencies are acceptable for point earning?

  17. The big misconception here is that corporate travelers will not get their benefits.

    If you are booking a negotiated rate through your companies travel desk, you will still earn all your benefits as an IHG Rewards Club member – these are classified different to OTA bookings. However, if your company use a travel desk that books rack or wholesale rates, then this will most likely feed through an Online Travel Agent (Egencia, owned by Expedia etc.).

    IHG are trying to push guests to book direct to cut the commission bill footed by individual hotels. Some OTA’s have commission rates of up-to 50%. There should also be an improvement in customer service as bookings made direct can be managed by all of IHGs Central Reservations offices, hotels and guest relations teams. Contractual restrictions imposed by Online Travel Agents require all modification, cancellation and amendment through their own systems, and at hotel level, employees are powerless to make changes.

  18. This process is severely flawed. Im a 30 yr Priority Club member who extensively travels on business and has no control over the bookings made by my clients. What difference does it make who uses direct or third party? Empty rooms are not profitable and its me that looks forward to spending my rewards earned in addition of sacrificing home life. Go back to the drawing board or end this stupidity now!

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