Best Rate Guarantee - Starwood and Kimpton Hotels

On Monday this week I came across two hotels with significant rate differences on their hotel websites compared to rates returned through a Travelocity search for downtown San Francisco hotels for July stays.

Hotel Triton, a Kimpton Hotel, San Francisco - $189 best available rate on Kimpton site ($161 AAA rate);
$99 to $104 on Travelocity and Expedia. This rate was gone as of today. Kimpton Hotels has a Best Rate Guarantee to match any lower rate for a comparable room found on a third-party site with a phone call to Kimpton.

Westin St. Francis, San Francisco –
$179 best available for standard double room on Starwood websites (Standard room at St. Francis is quite small room size with no view);
$136.58 Travelocity. Rate still there today.

Starwood has a Best Rate Guarantee offering a 10% discount on the lower rate found on a third-party travel site or the lower rate and 2,000 Starpoints.


Market Share Battle between Online Travel Agencies and Hotel Corporate-Branded Websites

After the 9-11 travel downturn there was tremendous discounting in hotel rates around the US and in many parts of the world. Priceline.com had a huge inventory of rooms that were going at fire sale rates. I stayed for weeks in Europe at major hotels like Marriott in major cities like Paris, Frankfurt, Amsterdam, and Singapore for rates averaging under $70 per night.

The hotel industry struggled with raising rates in 2002 and 2003. A fundamental shift occurred in hotel loyalty programs that differentiated them from airline frequent flyer programs during this period. Hotels began requiring hotel bookings to be made through the hotel’s own websites as a condition for earning frequent guest hotel points and elite membership qualifying stay credit, and hotel stay benefits like upgrades, or complimentary lounge access for elites.

An online reservation for a Hilton Hotel only earns HHonors credit and privileges when booked through any Hilton hotel family reservations website. Third party online travel agencies like Expedia, Travelocity, and Orbitz will not generate hotel loyalty program benefits for the hotel guest even if the guest is a high level hotel loyalty program member. This means a Hilton Diamond elite member should not receive upgrades or complimentary breakfast or lounge access when making a reservation through a third party site. (In actual practice the treatment of an elite member can be better for guests with past stays at a hotel as an elite frequent guest member. I have received full suite upgrades at some Hilton hotels on Priceline stays where the hotel staff knew me by name and prior stay history as Hilton HHonors diamond elite.)

Currently, a hotel guest loyalty program member can only expect hotel loyalty program benefits when reservations are made through a hotel corporate-branded website. Using Starwood Hotels as an example, the corporate-branded websites are listed as:

“Starwood-branded websites include Sheraton.com, Westin.com, StRegis.com, Whotels.com, LeMeridien.com, FourPoints.com, LuxuryCollection.com, Alofthotels.com, Elementhotels.com, SPG.com, and Starwoodhotels.com (collectively, "Starwood-branded Websites").”

Hotel reservations booked online are at a ratio of about 60% rooms booked through the hotel corporate-branded websites and about 40% through third-party online agencies like Expedia and others.


HOTEL WEBSITES' BEST RATE GUARANTEE (BRG)

The Best Rate Guarantee (BRG) is an interesting marketing concept for hotel corporations to control their own booking and guest reservation data.

Third-party online travel agencies like Expedia, Travelocity, and Orbitz have a large share of the hotel reservations market. Hotel guests who are not hotel loyalty program members are primarily looking for low rates. An online travel agency provides an immediate search return for rates at dozens of hotels, perhaps hundreds of hotels for a location and date and makes a small profit on each booking with a fee.

A search for San Francisco hotels on Travelocity returns 295 hotels in the “Greater San Francisco Area”. From the point of view of the hotel operator or for a hotel corporation like Hyatt, a potential guest having 295 hotel choices means the few Hyatt corporate-branded hotels are just a small fraction of the overall search returns. Too many choices means potential guests are lured away by offers and rates from one of the other 285+ non-Hyatt hotels. The metasearch travel site Kayak.com searches 342 hotels for San Francisco.

The corporate-pledged “Best Rate Guarantee” tells a potential guest that the absolute lowest rate is to be found on the corporate-branded hotel website. If you want to find the best Hyatt rate for San Francisco, then you need not worry about missing a better rate on Expedia, Orbitz, Travelocity, or any other third party online travel agency. The best rate guarantee assures you the best rates will be found through Hyatt’s own websites.

Loyalty Traveler research supports the claim that the best hotel rates are almost always found through the hotel chain corporate-branded websites.

Finding two major corporate hotels in downtown San Francisco at the same time with lower rates on Travelocity than the hotel corporate websites was a surprise.

All the major hotel corporations have Best Rate Guarantees for hotel bookings through their corporate-branded websites. The hotel corporations have different policies for their own version of the Best Rate Guarantee.

I wrote about Best Rate Guarantees in this post from March 2008 after successfully claiming a Hyatt Best Rate Guarantee. The interesting feature of that claim was the lower rate was pulled immediately from Expedia. In the case of the Westin St. Francis, the lower hotel rate is still on Travelocity almost 72 hours after I filed a successful BRG claim with Starwood for a rate $42 less than the Starwood sites and an additional 2,000 Starpoints.

There is another Blogspot website called The Best Rate Guarantee Blog dedicated to BRG claims for Wyndham-brand hotels. A good concept that will likely create havoc with BRG claims if it spreads to other major hotel chains. I looked over the tutorial for making BRG claims. The BRG blog favors Kayak.com for hotel rate searches.

One word of caution is not to rely too heavily on a single search engine like Kayak.com, although its metasearch function for checking Orbitz.com, Travelocity.com, Hotels.com, and Expedia.com is a time-saving feature. I regularly find significantly lower special offer rates through hotel corporate-brand websites than available on Kayak.com. The challenge to the consumer and a primary writing topic for the Loyalty Traveler is navigating the hotel corporate-branded websites for special offer links to rate discounts. Even a simple rate like a AAA group rate that may be 20% lower will not show up on a Kayak.com search. And remember that Best Rate Guarantee does not apply to special group rates like AAA members or senior rates which are the most common lower rates for hotel rooms.

The Westin St. Francis $138 hotel rate was not visible on Kayak.com unless you also did a search of Travelocity in a separate window. Orbitz.com, Expedia.com, and Kayak.com had the same $179 rate on the Starwood Hotels websites. I read a research report a couple of years ago from the Cornell Center for Hospitality Research concluding Travelocity was the most likely site to have the lowest hotel rates among major online travel agencies (I will have to search out the report link and of course the data may not bear the same results favoring Travelocity.com if the study were repeated today). In this case the Travelocity lowest rate factor came into play for the Westin St. Francis rate.

Another benefit of the Starwood Best Rate Guarantee provided for 2,000 bonus Starpoints or a 10% discount of the lower rate found on a third-party website.

I took the 2,000 Starpoints.

PointMaven.com has a table showing the Best Rate Guarantee terms and links for different hotel programs.