The Critical Points: It's Time for a Reckoning of the Hotel Best Rate Guarantee Policy
Quick summary
Each month in his column "The Critical Points," TPG Senior Points and Miles Contributor Richard Kerr presents his opinion on a loyalty program, card product or recent news that he believes is overlooked, unsung or the result of groupthink taking mass opinion in a direction with which he doesn't agree. His goal is not necessarily to convince you to agree with his position, but rather to induce critical thought for each of the topics and positions he covers.
If you head to the website of any major hotel chain, somewhere on the reservations page you'll see one form or another of a statement, claim or advertisement guaranteeing the cheapest rates for a room. Depending on the chain, that guarantee is backed up by either offering bonus points, matching the lower rate, exceeding the lower rate and/or giving you hotel credit if you're able to find a lower price elsewhere for the specific room you're looking to book.
However, along with these best rate guarantees, you'll also find a hyperlink to the full terms and conditions of each program. In Marriott's case, it is 1,451 words of qualifying language. Hyatt has 1,532 words, IHG's is 1,390 words and Hilton has 1,031 words of language that are enforced by hotel agents in a manner to make sure that it's a rare occurrence when a claim is actually approved.
It is time for hotel chains to either simplify and honor these guarantees, or remove them entirely from their sites. A best rate guarantee policy is meant to reaffirm consumer confidence in the prices they find. Instead, these programs have become opaque, gimmicky false advertisements that manipulate customers into believing they're getting the best deal.
How Difficult Have Claims Become?
When you book directly with a property instead of using an online travel agency such as Expedia or Hotels.com, the property skips paying commissions to that third party agency, which means it can split some of that savings with the customer in the form of hotel points, elite stay credit and elite benefits. It's a win-win scenario for the hotel and consumer alike, except when you try to invoke one of these best rate guarantee policies.
When I began submitting these claims in 2011, I probably had 80%-90% of my requests approved. In fact, it actually got to the point that if I wasn't using points for a free night, I was able to always book cash nights and improve the rate with best rate guarantees. It also didn't take much effort. A simple Kayak or Google search of the property led me to an online travel agency, where within 10 minutes I could find a cheaper price.
I wasn't abusing the program. I wasn't dancing around technicalities to force the hotel's hand. I wasn't utilizing odd overseas online travel agencies (a former common strategy for best rate guarantees). I just literally Googled the property and quickly found cheaper rates.
Flash forward to 2018, and it appears that hotel chains often can't compete with the prices at many online travel agencies. But rather than remove their best rate guarantees or lower their prices to match these agencies, chains devalued best rate guarantee incentives, made the submission process more difficult and routinely invoke erroneous reasons for denial. It's now a rare occasion that a best rate guarantee is honored, with less than 5% of my submissions approved. Experienced travelers typically no longer bother with submissions.
The Ugly
In preparation for this week's column, I submitted a total of 10 Best Rate Guarantee claims across Hyatt, Hilton, IHG and Marriott. I believe these were all truly valid claims and within the terms and conditions laid out for each program. That means the best publicly available rate I found (which did not require a promo or coupon code) matched:
- Dates of stay
- Number of guests
- Room type
- Cancellation policy
- Any included items (breakfast, lounge, parking, etc.)
From my 10 claims, only one was approved (thank you, Marriott). The reasons for denial included:
- Hyatt — "I am excited to hear of your desire to stay with us and your interest in our Best Rate Guarantee program. After researching, I was unable to validate your submission based on the third party website, www.Amoma.com, requiring membership to complete the booking process."
- Hyatt — "After researching, we were unable to validate your submission per the Best Rate Guarantee Terms and Conditions regarding membership sites. In order for a claim to be considered, the competing rate must be publicly available and without the requirement of an account or membership. In this instance, the requested site amoma.com, will allow the public to shop their site but they do require an account/membership in order to actually book with them. (They will automatically enroll guests during the booking process.) This booking practice makes the site invalid for our program."
- IHG — "After researching, I was unable to validate your submission based on the Third party site being a "Deal of the Day" special offer, which does not apply to the Best Rate Guarantee program."
- Hilton — "I have reviewed the rate published on the claimed website www.hotels.com and the rate is the same/higher than the rate of 164.00 with a free cancellation by 07/27 on your reservation confirmed through Hilton. The rate of 173.19 had a free cancellation by 07/25."
Let's go through these denials one-by-one. First, Amoma.com does not require a membership to book — you only have to enter your email address on the booking screen. The second Amoma denial is rather interesting, as it implies that any website which creates an account for you during booking makes that site invalid. The vast majority of online travel agencies do this, meaning you could never get a best rate guarantee approved with Hyatt.
Booking.com was used for the third claim, and if you head over there, you'll see that almost every property you try and book says "Great Value Today" (not "Deal of the Day" as stated in the denial from IHG). This doesn't violate any of the terms and conditions laid out in the program. And in the final denial, the Hilton agent didn't even compare the rates I submitted — he or she compared completely different rates with different cancellation policies.
Other reasons for denial not listed above included a $1 deposit being required, exact room types not able to be confirmed, same room type but on a high floor versus a low floor (which is not even delineated on IHG.com) and currency values causing the price difference (even though both sites were displayed in USD currency).
Even when you think you have a bulletproof submission, these agents can come up with some idiosyncrasy I couldn't even fathom in advance to deny the claim, or they simply don't process the claim correctly. And once your claim is denied, there's no recourse except to resubmit and hope you get a different agent to read the submission.
The Fix
Look, we all agree that the business world in 2018 requires fine print and footnotes — not having any specific terms for best rate guarantees would leave the programs ripe for abuse. But there must be an even playing field.
It makes sense to exclude claims from auction sites, member-only sites (where rates are subsidized by annual membership dues) and opaque booking sites like Hotwire.com where you don't know in advance which property you're booking. But legitimate claim denials upset customers and cause resentment toward your brand.
So with that in mind, here are my suggestions for how hotels can fix the best rate guarantee and make it meaningful again:
- Be transparent with your customers by creating a new policy that builds brand recognition and appreciation. Large companies today are so rarely transparent that such a move would be a welcome gesture and build loyalty. Create a simple claim process that requires just six criteria:♦ Publicly available rate not requiring a log-in or promo code
♦ Same dates
♦ Same room type
♦ Same number of guests
♦ Same cancellation policy
♦ Same package inclusions (breakfast, parking, etc.)If a claim meets these six criteria, it gets approved, because the customer is getting the exact same experience for cheaper via another booking method. Approve the claim without red tape and reward a customer who put time and effort into researching how to stay at your property. - Incentivize best rate guarantee agents not to deny claims (as rumored by IHG insiders), but to provide feedback to your chain on what booking patterns and competing sites are routinely offering your customers for the same experience. Utilize that information to enhance your own booking experience and price points.
- Put the programs into the hands of individual properties. Management at the property level should have intimate knowledge about their local market, price points and how customers are booking rooms. This should make it easy for a property to recognize legitimate claims, and provide individual properties great data on how their hotel is being marketed. A property could also decide how much they want the potential business by either approving a claim or giving the potential customer a counteroffer.
- As a complete alternative to the above steps, remove the program completely. I'd rather see a hotel chain state that its best rate guarantee program was unsustainable due to the competitive advantages of online travel agencies instead of regularly giving false hope to customers.
Bottom Line
A guarantee that isn't honored is a marketing gimmick. Gimmicks may work for a short amount of time, but they always come to light in the end. In 2018, the occasional-to-well traveled individual thinks of best rate guarantees as a gimmick and knows that the likelihood of a claim being approved is slim.
And to the rare traveler, best rate guarantees are unknown — he or she will head to an online travel agency anyway to price and shop. This leaves the best rate guarantee policies as they stand without an audience and without purpose, except to frustrate those who submit claims.