Hotel giants insist booking direct is the superior option

Hotel front desk
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Hilton and Marriott maintain that direct booking continues to be the best deal for members of their loyalty programs.

The hotel companies responded to a Piper Jaffray study that found travelers often have a better chance finding lower hotel prices on OTAs and travel search sites than on the hotels' own websites.

According to the study, OTAs/travel search sites offered the lowest price 21% of the time, while hotels' own websites offered it just 13% of the time. In about two-thirds of the cases, room pricing was the same across distribution channels.

"While we can't speak to the validity of this report, direct booking continues to be the best way that Marriott loyalty members are guaranteed the lowest rate with benefits and services at one of our hotels," Marriott said in a statement.

Hilton chief commercial officer Chris Silcock said, "We are confident that Hilton Honors members who book direct not only get a better price, every day at every hotel, but also a better and more personalized experience, with unique features like choose-your-room and digital check-in, digital key, Hilton Honors points and free WiFi."

Hilton and Marriott also have made direct-booking perks available to customers booking through travel agents but not the OTAs.

The hotel trade group American Hotel & Lodging Association had more pointed comments about the Piper Jaffray study, calling it "flawed from start to finish."

Maryam Cope, the AH&LA's vice president of government affairs, said, "We remain concerned about certain deceptive marketing practices by certain OTAs that can lead to false choices, false discounts and a false sense of urgency throughout the booking process."

In the past two years, Hilton, Marriott, Hyatt and IHG have touted their websites as sources for the lowest available rates. The Piper Jaffray study, if accurate, contradicts those claims. However, the survey covered only 86 hotels. Piper Jaffray attempted to cull results from 100 hotels, one each within Marriott, Hilton, IHG and Wyndham Hotel Group in the world's 25 largest cities.

In the end, the survey covered only 86 hotels because those companies, the world's four largest, did not have properties in all 25 of the largest cities.

Phocuswright senior vice president of research Douglas Quinby called the Piper Jaffray report "directionally accurate" while offering a caveat that the sample size of just 86 hotels could make the results inconclusive.

That said, Quinby added that hotel companies might be missing an opportunity by focusing much of their marketing efforts on touting best pricing. That's because younger travelers might be willing to give up a few percentage points on pricing through an OTA to have the opportunity to more rapidly earn and redeem loyalty points for future stays by booking direct.

Meanwhile, older, more frequent travelers value hotel-centric perks, such as more rapid check-in and more personalized service, enough to offset the chance to get a slightly lower rate from an OTA.

"By focusing on the lowest common denominator [pricing], the hotels are really devaluing the base level of their [loyalty] programs," Quinby said. "The real question is whether they're shooting themselves in the foot with this approach."


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