Do you prefer to book your travel directly through a provider or with a third-party agent? Do you book online, or would you rather talk to a real person? Whatever your preferences may be, airlines and hotels are becoming more adamant that you book through them directly, preferably through their websites. They’ve begun to offer incentives for direct bookings and penalties for off-line reservations. We’ve taken a look at several of these new policies to determine whether you will benefit by changing your booking habits. Though the policies aren’t a real deterrent for now, they indicate future trends that you may want to watch out for.
We asked travel industry expert Ed Perkins why travel providers want to lure customers back to booking directly through them. “They have two reasons,” Perkins says. “One, to cut out the payments they now make to those third-party sources, and two, to strengthen ‘brand loyalty’ among consumers.”
In a tough financial climate, airlines and hotels want to cut out as many unnecessary payments as possible, and would prefer to avoid the commissions they pay to third-party sites for selling their inventory. And, as loyal customers bring in more revenue with repeat bookings, travel providers want consumers to make their reservations based on brands they like, rather than always going for the lowest price.
As for online versus off-line bookings, “it’s almost totally a matter of money,” says Perkins. Direct Internet booking saves the airlines money by lowering labor costs because fewer sales representatives are needed.
Travel providers have gone for both positive and negative reinforcement to convince you to book directly through their websites. Whether you react more strongly to incentives for booking online or penalties for using telephone sales representatives, you may want to rethink the way you book travel.
The two main categories of positive incentives are price guarantees and mileage bonuses. Play the system right, and you can get the lowest price available, plus extra miles on your next booking.
Price guarantees were started by the hotel industry last year, but a few airlines have followed suit. You can find these guarantees from several hotel chains including Hilton, Hyatt, Ramada, InterContinental, and Choice, as well as Northwest and Alaska Airlines. Continental recently had a price-guarantee promotion for a limited time only.
Although each promotion is slightly different, the basic concept is the same. You must first book your hotel stay or flight through the provider’s website (some hotels include their own telephone reservations system as well). You then have approximately 24 hours to find a lower fare on a third-party site and report it to the airline or hotel. The new fare must be for a flight or stay with all of the same travel details as the original. If the airline or hotel representative can verify that a lower rate is still available, you will be refunded the difference.
A best-rate guarantee may seem beneficial, but in the end, the savings may not be worth the hassle. Do a little pre-booking research and you can book the lowest fare from whichever agent is offering it, rather than filing claims later and possibly finding you are ineligible for the discount. That is why certain providers have chosen to offer extra incentives. If you are deemed eligible for the refund, Northwest will give you a $50 voucher for future travel, Hilton will give you a $50 American Express Gift Cheque, Hyatt will take an additional 20 percent off your stay, and Ramada will give you your first night free, in addition to adjusting your rate to the lowest available.
Airlines also try to lure customers to their online reservations systems with bonus mile offers for online booking. All six major airlines, plus Alaska and America West, offer 500 to 1,000 miles for booking online, while Southwest offers an extra credit and JetBlue offers double points. Plus, Alaska, Delta, and Northwest offer up to 1,000 miles for booking award tickets online; these tickets normally don’t earn miles at all.
In addition to luring you with offers of free miles and free money, airlines have also taken the reverse approach and are trying to dissuade travelers from booking offline by penalizing the customers who do so. These penalties mostly take the form of extra fees for consumers who make reservations through a phone agent or at a ticket counter.
American, Continental, Northwest, United, and US Airways now charge an extra $5 for booking over the phone and $10 for booking at a ticket counter. Although Northwest—the first airline to assess these fees—originally charged $7.50 for reservations made through travel agents using a global distribution system (GDS), the carrier dropped those fees due to harsh criticism from within the industry.
What may have a greater impact on your booking decision is another recent change from Continental. The airline has cut the number of elite-qualifying miles you earn from discount economy tickets by half—unless you book online at continental.com. There, your discounted tickets will earn full miles. This policy won’t hurt anyone who is not trying to attain or retain elite status on Continental; however, frequent flyers who routinely purchase inexpensive tickets will need to fly twice as much to reach elite status if they don’t book online. That’s a huge incentive for Continental elite flyers to book online, and a major affront to flyers who prefer to book through human beings.
Take a look at all of the incentives and disincentives, and you’ll see that airlines and hotels seem to be better at giving travelers reasons to book online than they are at penalizing them for booking off-line. But even the extra perks come with caveats that make them somewhat difficult to attain.
To get the most out of these offers, you should do your research in advance. If you find two identical itineraries and the lower price is on a third-party site, you might do better to book your flight or stay directly through the travel provider’s website instead. You’ll receive the lower fare plus the extra cash or free night, not to mention extra bonus miles.
Just read all the fine print to make sure the lower fare meets all the restrictions and call in the lower price quickly. If the provider’s agent can’t find the low fare, you won’t receive the refund, even if you have proof that you found it just a few hours earlier. You do take the risk that an eligible low fare could sell out before it’s confirmed by the hotel or airline, so don’t book any fare you’re uncomfortable paying should it turn out you can’t get the low-fare guarantee. And if you don’t want to put up with the hassle, just book through a third-party site or agent; a $50 voucher and 1,000 miles don’t seem like too much to give up for a quick and easy booking.
If you feel more comfortable booking off-line, then you should continue to do so. The five- to 10-dollar charge for booking with a phone agent or at a ticket counter is a tiny amount compared to the hundreds of dollars you may be spending on plane tickets. So if you feel more comfortable talking to a real person, you only have a relatively small price tp pay for peace of mind. Besides, you’ll have to pay $5 or more if you book through a third-party site, such as Orbitz or Expedia, and travel agents charge for their services as well. And, if you happen to be technologically challenged or not used to researching fares, a trained phone representative may be able to save you more than a few dollars on your fare than if you blunder your way through the process yourself.
On the other hand, if you’d like to take advantage of these incentives but are concerned about booking online, never fear. Several providers—American is the most recent example—have been improving and enhancing their online booking engines to give you more tools, choices, and ease in finding and reserving fares online. As the online user experience improves, airlines know that customers will feel more confident about booking online, and you’ll find that booking a flight can be quicker and easier than ever before.
But whether you change your booking habits or not, keep an eye on the travel industry to see what else providers come up with to lure you back to their websites. Phone reservations may be cheap now, but fees could go up or telephone sales could disappear altogether. Or perhaps the travel providers may just give you an incentive that’s too good to refuse.