The travel industry is experiencing upheaval, particularly in the group booking sector for hotels and resorts. A significant shift has been observed as hotel loyalty programs start offering competitive rates at all-inclusive resorts that can undermine traditional negotiated group rates. This phenomenon has raised alarm bells among travel advisors and industry associations, as it threatens their ability to provide clients with the best options while preserving their own business interests.
The Destination Wedding & Honeymoon Specialists Association (DWHSA) recently highlighted the struggles faced by travel advisors following a survey, which revealed that an astounding 95% of its members have lost group guests to loyalty program bookings in the past year. This analysis will delve into the various implications of this trend, exploring the challenges travel advisors face and what potential solutions may exist.
For many travel advisors, the emergence of hotel loyalty programs offering exclusive deals represents a double-edged sword. Cheryl Bailey, a travel advisor from Austin, Texas, illustrated this predicament vividly. During a peak booking period, a wedding party of 31 found themselves captivated by on-site promotions that offered rates far lower than what could be secured through contracted group bookings. The pressure intensified as guests were eager to capitalize on the significant savings, forcing advisors like Bailey to make tough decisions.
The complications escalate from there. As travel advisors strive to manage client expectations and preserve their commissions, they face logistical nightmares. The speed at which guests are drawn away by these direct bookings can be astounding, often leaving advisors scrambling to react swiftly. In Bailey’s case, despite navigating substantial obstacles to save the group booking, the couple ultimately decided to abandon their original arrangement, leading to a myriad of setbacks and lost benefits.
The issues surrounding loyalty programs go beyond mere pricing discrepancies. Travel advisors are now grappling with perplexing policies that vary significantly between group contracts and direct consumer bookings. Michael Goines of MD Luxury Travel pointed out the challenges presented by minimum stay requirements, which often conflict with guest desires for shorter vacations. Additionally, variances in deposit terms and cancellation policies exacerbate the burden on advisors, limiting their ability to offer attractive deals while competing with direct consumer bookings.
There’s a growing trend where clients opt for direct bookings to take advantage of enticing perks such as free transfers or excursions that may not be available through group contracts. As Shelli Nornes, president, and CEO of Romance Travel Group, indicated, slight differences in cancellation policies can tip the scale in favor of direct bookings. This has raised questions about the sustainability of traditional group arrangements as clients appear more inclined to act in their own interests, often without fully understanding the implications for their travel advisor.
In response to these challenges, the DWHSA has initiated a dialogue with industry stakeholders. A pressing item on their agenda is facilitating a “Group Booking Summit” aimed at fostering collaboration between travel advisors and resort executives. While there appears to be a hesitation among larger hotel chains to engage, mid-sized all-inclusive brands have shown a willingness to explore solutions.
Named brands such as AIC Hotel Group have recognized the issues faced by travel advisors, proposing a price-match policy that aims to level the playing field when promotional rates emerge. Nonetheless, it begs the question of whether such measures are sufficient to address the underlying complexities that have arisen from loyalty program practices.
As the landscape continues to evolve, travel advisors must adapt to remain competitive. Training programs focused on management strategies for group bookings may serve to equip less experienced advisors with the necessary skills to navigate this complex terrain. By embracing a proactive approach, advisors stand a higher chance of overcoming the challenges imposed by loyalty programs and ensuring they continue to provide value to their clients.
Ultimately, the success of the travel advisory sector hinges on its ability to innovate and adapt in a rapidly shifting environment. As the DWHSA continues its efforts to address these challenges, the path forward will need to include open communication, collaboration, and creative problem-solving among all stakeholders involved.
The rise of hotel loyalty programs signifies a transformational phase in the travel industry. By acknowledging these changes and working collectively, travel advisors and resorts can create a more equitable and rewarding market for all parties involved.