Jul232009

Popularity of Chain-Affiliated Hotels Waning?

Popularity of Chain-Affiliated Hotels Waning?

A national travel survey 2009 National Travel Monitor by Ypartnership/Yankelovich states travelers have increased preference for independent hotels by 6% over the past year. The chain-affiliated hotels do not need to fret too much as 4 out of 5 leisure travelers still prefer brand name hotels, but the survey indicates a growing preference for the individual character and pricing of independent hotels.

 

Leisure travelers also state a growing preference for limited-service hotels, i.e. hotels without restaurants, over full-service hotels since the 2008 survey conducted by this group. Room rates play a large role in the growing popularity of the limited-service hotel. Also, the perception of better value is a leisure traveler concern.

 

Still the leisure traveler preference for full-service hotels has only dropped from 66% in 2008 to 60% in 2009 while limited-service hotels have grown in popularity from 34% in 2008 to 40% in 2009.

 

As Loyalty Traveler I find the interesting data point in this survey to be a preference for chain-affiliated hotels at 80%, yet brand name is cited as a “very influential” factor in choosing a hotel for just 44% of respondents.

 

Does this mean travelers want a chain-affiliated hotel for consistency in lodging, but do not care which brand?

 

This indicates to me that leisure travelers are not taking advantage of the full array of benefits from hotel loyalty programs. Readers of my blog know there is real value in working a loyalty program for complimentary upgrades and free nights. I meet so many people who spend 20 to 30 nights in chain-affiliated hotels every year, but rather than being loyal to one major hotel chain and gaining elite status, the desire to get the lowest rate splits their loyalty among the chains.

 

The result of scattered hotel loyalty is small amounts of points in a variety of hotel programs and no elite status. The trade-off of several  hundred dollars saved over the course of the year is often at the expense of a couple of thousand dollars in potential benefits missed due to no hotel loyalty elite status.

 

A $200 savings for a 5-night vacation at a Marriott resort may be a savings for one trip, but it is not the best value if the traveler could have had a $200 per night complimentary upgrade at the Hilton resort across town based on Hilton Diamond elite status.

 

Many leisure travelers have enough hotel activity during the year to reach a high elite status, particularly with Starwood Preferred Guest or Hyatt Gold Passport (hey, Hyatt is giving away top elite status for free right now with complimentary upgrade certificates).

 

Year after year, I watch fellow travelers going after the best rates without consideration of the potential added value they would receive if they just focused on a single major hotel chain. And they spend thousands of dollars on hotels over the course of the year and could easily put out a few hundred dollars more to maintain high elite status.

 

I’ve had friends come and see my hotel room and they wonder why I didn’t tell them about the great hotel deal. “I would have stayed here for that price!”

 

Complimentary room upgrades don’t come with two or three hotel stays a year with a major hotel chain. Demonstrating loyalty means a commitment to spend thousands of dollars over the course of 15 to 30 hotel stays during the calendar year. In my case I feel the loyalty is returned by the benefits I receive from the hotel loyalty program.

 

Complimentary upgrades are based on showing hotel loyalty to the affiliated hotel chain. It is a win-win relationship. The hotel chain has my loyalty and I frequently receive value-added benefits for my hotel spending.

 

Room rate, location, and value are cited as the most important factors by leisure travelers when booking a hotel room.

 

Room rate is quite important for most travelers. The basic practice of setting room rates based on the hotel’s market segment competition means most major brand upper upscale hotels in the same area will have a similar price. The room rate variations are typically due to events and functions that will push rates higher for one hotel over another. With no special events creating higher hotel demand, then room rates are typically within a 10% range above or below an average of the hotels in a particular market segment in a specific location.

 

When location is most important and room rates among chains within a specific location tend to balance out, then value is left as the primary variable. Hotel frequent guest programs provide the added value in complimentary breakfasts, room upgrades, and future hotel room rebates in the form of points and free nights.

 

Frequent guest elite status in a major hotel chain’s loyalty program improves the value variable. Rather than downgrading your hotel market segment, try upgrading your hotel loyalty.

 

 

Hilton HHonors Reception Desk, Hilton Singapore

Hilton HHonors Reception Desk, Hilton Singapore

 

 

 

 

 

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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