Hotel chains use loyalty rewards in hopes to get you to return to their chain. Hotel chains want to lower prices for customers who book directly with them. The Internet can affect pricing and information about prices, as travelers are used to booking travel online. This price transparency generates a price competition for the chains. Hotels need to sell rooms whether through online booking sites for a contracted lower price, or through direct chain bookings. The lower online, contracted price can be used by the chain if selling directly to a member of the chain’s loyalty program.
Suppose your B&B, from the Unit 1 discussion, was so successful you decided to expand operations and buy a hotel. As a new hotel owner:
- Would you prefer your customers book online, directly through the hotel chain, or both? How does your personal booking preference impact how you want your customers to book a room?
- How would other B&Bs, Airbnb, andRoomKey.com impact the price that you would charge? What can you do to help offset this pricing competition?