Hyatt Makes an Unpopular Change to Its Best Rate Guarantee, and Why Hotel Best Rate Promises Don’t Mean Much Anyway

Yesterday Mommy Points pointed out that Hyatt had introduced a new process for their ‘Best Rate Guarantee‘.

Hotels see a really significant commission expense for bookings that are made through third party channels, especially the online travel agencies like Expedia and Orbitz. The major chains have managed to push down those commissions somewhat over the past few years. They may no longer be over 20% in most cases. But they’re still a significant business expense.

So they’ve taken many tactics to reduce those costs. One thing they do is try to push their own frequent customers to book through their own websites and call centers.

  • Marriott and Hyatt will recognize status, but won’t allow members to earn credit towards their status with these stays.
  • Hotel chains like Hilton and Starwood have a policy against even recognizing elite status on stays booked through these channels, in addition to not awarding credit towards future status.

Another thing that they do is encourage customers to book through their own channels by promising them the best rates for doing so.

Only they don’t actually ‘promise’ the best rates. All they do is promise a process by which if a customer discovers, under certain circumstances, that they aren’t getting the best price that they might be able to have the better price matched or beaten and might be able to get some compensation as well that varies by chain.

Hotel chains do try to get their hotels to load the best rates through their own channels. But hotels do continue to market better rates through third party booking sites. One frequent way this happens is when those sites run short term sales, and solicit individual hotels to participate in exchange for priority placement. This may happen on third party sites especially targeted at non-U.S. markets, thinking that this won’t draw much US attention and thus won’t trigger many ‘best rate guarantee’ claims.

Back to Hyatt’s change in process.

They offer to match and then take an additional 20% off of your room rate if you find a better price somewhere else.

You used to call up Hyatt and they would verify your claim while you’re on the phone. These calls could take 10 minutes or even 20-30 minutes (based on reports I’ve read).

Now they’re only taking claims via online form.

On the one hand I far prefer an online process. Unless the rate discrepancy was huge I wouldn’t spend time making the call for a best rate guarantee. I will definitely use an online process more. (It’s not just the time factor being worth the dollars, I also dread the phone but have fortunately gotten over that when it comes to talking to airline award desks.)

Many members are not at all happy about this change, though.

No doubt Hyatt sees this as a cost savings (those long phone conversations can be costly), as well as a consumer convenience.

But instead of verifying rates real-time on the phone with you, they say they’ll get back with you within 24 hours. And sometime during that 24 hour period the better rate you’ve found may have changed. If Hyatt can’t verify the rate on its own (even though they require you to submit a screen shot), you won’t have a successful claim.

(There are lots of other reasons why they’ll reject a claim. You need to be booking the same room type, for the same number of people, and with the same benefits — plenty of chains have rejected claims because the lower rate you’ve found elsewhere includes breakfast or parking while the higher rate on their website does not — hence they aren’t the same, even though the cheaper rate is better.)

Sometimes rates can be tough to find, or an employee on the other end of the claim may not be following the correct procedure to pull it up. That’s part of why phone conversations too so long in the first place.

If they can’t find the rate, they’ll reject the claim. Even if the rate is still there. And you’ll have some back and forth, during which time the rate could disappear.

Personally I’ll benefit from this change, but many will not.

The truly consumer-friendly solution would be to offer the online option but still allow for a telephone submission of a best rate guarantee claim.

Remember though that hotel chains don’t want to approve claims, really. They want to offer a credible process so that they can have a best rate guarantee, and market that they have one, as a way to convince customers that they’ll get the best deals booking directly — saving the hotels that commission which would otherwise be paid out to the online booking sites.


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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Comments

  1. Submitted a rate guarantee the other day with Omni Hotels for a property in MX. I found a rate on HotelClub.com which was far below (like half) of their online rate. In their best rate guarantee, they offer to beat the other rate by 25%. They denied it (as I’ve found is often the case with these so-called guarantees) on this basis:

    “Thank you for contacting Omni Corporate Guest Relations! I have received your request for a Best Rate Guarantee. Unfortunately, I am going to have to deny your request. This is based on the Terms and Conditions Policy. The 3rd party reservation through HotelClub.com is not a public domain. It is a club you are required to join.”

    Nowhere on HotelClub.com does it say you have to join to get the rate in question. It so happens, that they automatically sign you up for their so-called “club” after you book, but whatever. Omni uses this to weasel out of their commitment. I find more often than not, these guarantees are a scam and the hotels will find any way possible to weasel out of honoring their guarantees.

  2. I tried making a claim with Best Western but by the time they got around to checking the better rate, it had gone up. Complete waste of my time.

  3. I think the hotels should block those sites like hotels, orbitz, priceline, Kayak, and all that Silicon Valley junk. If the hotels have a booking engine on their own site, the idea that “others use other sites” is just ridiculous. If there is one booking machine, the hotel website, people will go there and book it.

    Why Hilton doesn’t hire Shatner and pay him triple is beyond where no man has gone before.

  4. BRG did not work with SPG, either.

    An info submitted took over 18 hours for SPG to review it, on a deal that was valid until midnight, thus SPG claimed they could not honor it.

    I do not trust SPG’s promise when I really need to secure a best price offer. Pure waste of customer’s time and good faith.

  5. I assume this is a cost saving measure. I’m OK as long as response is less than 24 hrs. It took me around 30 mins on the phone last time I did one with Hyatt. The Marriott process works OK they always respond within 24hrs, sometimes as little as 2 hrs, but as you pointed out sometimes the rate is gone then. One thing I have found is rates on some sites fluctuate over the course of the day, I assume they are targeting people in different time zones with different rates?

  6. You make an interesting point that the objective of the hotel chains is to appear to have a best rate guarantee, rather than to actually have one. I have claimed against the Starwood one on two separate occasions over the last five years and on both occasions was approved in a fairly timely fashion. But a recent – and totally legitimate – claim to Hilton was denied based on the fact that I had supposedly booked on an opaque site. I hadn’t; my comparison was at Booking.com, which showed the full details of the hotel and price before booking – hardly an opaque site. I tried arguing, but to no effect. Clearly Hilton has no intention of honoring its best rate guarantee, if it can redefine an opaque site to suit itself (and to effectively cover any site other than Hilton, thereby rendering the BRG null and void).

  7. Hilton always honour elite benefits on third party stays, they just don’t award points or stay credit.

  8. Gary:

    I think you might need to issue a correction here. I Just did a BRG via the telephone with no issues calling the regular BRG phone number. Also, people on the FT thread have not mentioned this and posts today reflect the phone number is still working.

  9. I talked to the rep. If the reservation is for today or tomorrow, you can still use the phone line. All other claims will need to be used via online form.

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