Disgruntled Low-end Hotel Franchisees Tilt at the TripRewards Windmill

Some franchised hotel properties see a lot of value in their chain’s loyalty program. And others do not. (Hat tip to boazs.)

In particular, several owners of Baymont Inn properties are displeased at chain parent Cendant’s move to include them in TripRewards, and impose the associated costs.

TripRewards – This customer-loyalty program was designed to encourage repeat clientele by awarding guests points for each stay at a Wyndham property, thus benefiting the individual properties. But TripRewards has achieved neither of these goals, according to Patel, who said the methods that Wyndham uses to assess points are unfair to the owners because they generate profits for the company at the expense of the individual properties. “Wyndham has TripRewards structured so that when a guest checks into the hotel, they don’t have to show their membership card or even mention that they are a member,” he said. “Of course, if the guest doesn’t present us their card, then we have no clue if they are enrolled in the program. So at night, Wyndham tries to match each guest up with a membership number, and if they are a close match, then Wyndham assesses the hotel a 5-percent fee.”

The chain apparently believes that if a program member books a program property, it’s on purpose, they’re driving revenue to the hotel and it should be entitled to be compensated for that. Naturally the hotels themselves value the revenue – whom whatever source it’s derived – and what to pay as little as possible to acquire it.

Their complaints aren’t just limited to TripRewards, though. They don’t like having to offer a consistent set of amenities and implement quality standards, or be responsive to customer complaints (all rather important to developing a brand).

Shortly after Cendent Hotel Group picked up Baymont, the company changed its corporate name to Wyndham Worldwide and rolled out new or updated programs, including a new reservations system and a customer-loyalty program; new policies targeting quality assurance and customer complaints about franchised properties; new contracts with third-party travel-booking Web sites; new agreements with franchisees that carry higher fees; and a requirement that franchisees add more amenities to their hotel rooms, at their expense.

They resent being billed for new software (understandable, they didn’t ask for their affiliated brand to be acquired) and being fined for customer complaints

Franchised properties may receive only 10 guest complaints per 10,000 guests; once that threshold is breached, Wyndham assesses the hotel a penalty fee ranging from $60 to $120.

Bizarrely, the group representing these Baymont franchisees claims that customer complaints are because the chain fines hotels that if only they weren’t being fined they’d put more money into their properties. Which somehow didn’t prevent the complaints in the first place, and since the other gripes are about having to spend more money on their properties it seems particularly preposterous.

Now, on the whole I haven’t been a fan of Cendant in the travel space, period. But I suspect as a hotel guest, and given my own priors, I rather value what they’re trying to do here. But the fact that they need to — and that it’s resisted by some franchisees — just underscores the reason that I tend not to stay in Baymont-type properties in the first place.

Finally, some interesting stats on the TripRewards program:

it is worth noting that loyalty programs are a competitive necessity in today’s lodging market. The vast majority of the 6,000 franchised hotels that participate in the TripRewards program have embraced it. One measure of success is the program’s popularity with guests. The TripRewards program is attracting an average of 280,000 new members each month, and more than 7 million people have enrolled since its inception four years ago.”

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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