Agents and agency groups were up in arms with Marriott International last week, claiming that the hotelier’s plan to offer free WiFi to Marriott Rewards customers who book directly amounted to a disincentive to use a travel counselor.
Industry analyst Henry Harteveldt said the move appeared to have been aimed at moving customers away from online travel agencies (OTAs), which tend to deliver low-margin bargain hunters.
“This is Marriott’s attempt to woo the brand-agnostic traveler away from an online travel company to one of Marriott’s channels,” Harteveldt said. “They’re not targeting someone working with a traditional agency.”
That reasoning came as little consolation for travel agencies that deliver higher-margin customers yet found themselves being collateral damage.
“In terms of the general direction, it’s frightening,” said Alex Sharpe, president and CEO of Signature Travel Network.
John Wolf, a spokesman for Marriott, said last week that the company created the policy to serve Rewards members who book directly, “especially our Generation X and Y members.” Wolf said those customers were confused by the fact that they got free WiFi in some hotels but not in others.
“It is not intended to disadvantage any specific channel or partner,” Wolf said. “We continue to believe that a healthy mix of business from direct and indirect channels — OTAs and traditional agencies — is the optimal strategy for Marriott.”
But top industry players warned that the move is a risky one.
"Virtually every company today wants to have a direct and cost-efficient relationship with its prospects and customers," said Jack Mannix, an industry consultant, who formerly was head of the Ensemble Travel Group, the Travel Institute and ran AAA’s national travel strategy and supplier relations. “But, as some other companies within the industry have found, alienating one of your key distribution channels can be perilous.”
Harteveldt outlined the fine line Marriott was walking with its WiFi policy. Free Internet is a benefit normally given to Marriott Rewards elite members, Harteveldt said, so the hotelier did not want to dilute that by broadening the offer to the agency community at large, especially since it has a competing interest in giving its individual hotels a chance to make money on WiFi.
Marriott’s new policy applies to full-service brands Marriott, JW Marriott, Ritz-Carlton, Renaissance, Gaylord and Autograph Collection. Edition and Marriott’s select-service properties already provide free WiFi.
Platinum and Gold Elite members will continue to receive free enhanced WiFi, a service that enables users to download large files faster and view streaming media such as movies. Marriott Rewards has 47 million members.
While travel agency executives were unhappy about the new policy, some expressed hope that a solution could be worked out by Jan. 15, when the new policy is scheduled to go into effect.
“The good news is … we’ve got 60 days,” said Sharpe, adding that his members book millions of dollars of corporate business with Marriott. He said Signature has reached out to Marriott, asking to discuss the matter.
“It’s great to offer free WiFi to returning guests,” Sharpe said. “I just want to be able to book it.”
Suzanne Hall, senior director of preferred supplier relationships for the Ensemble Travel Group, said Ensemble, too, had been in touch with Marriott executives.
“We feel this is not supportive of the agency channel,” she said, but she added that she was optimistic Marriott would find a solution.
As an example of an existing workaround, she said, some Marriott hotels in the Ensemble Hotel & Resort Collection offer free WiFi, but she stressed that it is up to the individual hotel.
Lisa Maloney, global project manager of hotel solutions for Carlson Wagonlit Travel (CWT), said that free Internet is one of the most negotiated hotel benefits for the company’s corporate clients. “We attempt to negotiate it 100% of the time,” she said.
That doesn’t mean all clients get it 100% of time, because many factors come into play, such as size and strategy. But because free Internet is such a common benefit, she did not see Marriott’s policy as having a major impact on CWT’s clients.
Tom Ogg, co-founder of the Travel Professional Community site, said that agents participating in discussions about the new policy pointed out that resort fees usually include Internet anyway. Even so, agencies were concerned about the implication of a policy that gives any customer an incentive to book directly with a supplier.
“We condemn Marriott’s strategy and do not work with the brand,” said Albert Herrera, Virtuoso’s senior vice president of global product. “Our relationship is with Ritz-Carlton, and Virtuoso members benefit from being STARS and as such are covered.” Herrera’s reference was to the Ritz-Carlton program and online portal for premier travel agencies.
Stuart Godwin, president of the Leisure Travel Alliance, called the policy a disservice to consumers who book with agents, as well as to agents who “with Marriott’s encouragement, helped build and feed the Marriott brand.”
Nicole Mazza, chief marketing officer for Travelsavers, said, “I think it sends an incorrect message to consumers that travel professionals may not be necessary, when the reality is that their expertise is invaluable. It is a fact that travel professionals are the most economical distribution for a brand and deliver higher [average daily rates].”
John Werner, president and COO of the MAST Travel Network, said that Marriott did not have a preferred agreement with MAST but that many MAST members book Marriott properties with several wholesalers and tour companies.
“This will have an impact on our sales goals with these suppliers,” he said, because some clients might opt to book directly with Marriott in order to get free Internet.
ASTA weighed in on the matter, as well.
“The policy discriminates against consumers who use travel agencies and is not likely to be well received by them,” ASTA CEO Zane Kerby wrote in a letter to Marriott shortly after the company announced the policy.
“Marriott’s plan to offer free WiFi as an inducement to travelers who book direct with a Marriott brand or through Marriott.com will disadvantage loyal travelers who use the travel agency distribution channel.”
Whatever Marriott’s reasoning for the new incentive, other hoteliers are not following its lead.
“None of the competitors have jumped on the bandwagon,” said Jim Smith, a travel and tourism distribution and marketing expert who served as president of GEM, which became Vacation.com.
Hilton Worldwide is “continually examining where we can improve our on-property experience no matter how our guests book stays with us,” said Blake Rouhani, senior manager of public relations for Hilton Worldwide and Hilton HHonors.
Hilton offers free Internet to Hilton HHonors Gold and Diamond members at hotels with no resort charge and recently introduced a tiered Internet pricing system that enables guests to buy additional bandwidth.
Hyatt offers free WiFi to all guests at many of its brands, including Park Hyatt, Andaz, Hyatt Place and Hyatt House. Hyatt Gold Passport elite members get free Internet access at all Hyatts, though Stephanie Sheppard, public relations manager for Hyatt Gold Passport, said, “We are continuing to evaluate our offerings.”
The timing of Marriott’s announcement coincided with its negotiation season with at least some agency groups.
Travel Leaders Group, whose brands include the Travel Leaders Associates franchise, Tzell Travel Group, Protravel International, Vacation.com and others, said last week that it could not comment on the story because it is in “discussions” with Marriott.
Many agents and agencies said they were baffled by the new policy.
“It’s hard to understand,” Sharpe said. “Their campaign is ‘We love travel agents.’”
Marriott’s Wolf said that Marriott puts “great value on its travel agency partnerships. We are always communicating with them and will always listen carefully and respond thoughtfully to their inquiries and concerns.”