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E Wholesalers&
Lowest Rate Guarantee
E Wholesalers&
Lowest Rate Guarantee
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E WholesalersE Wholesalers
675+ Choice Hotels participating Manual process, heavily discounted rates Room allocations, direct bill (30 to 60 days) Training retail customers to buy discount Using “scare tactics” to drive rates down Established large price-sensitive customer base Opportunity to sell discount “when needed”
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E Wholesaler StrategiesE Wholesaler Strategies
Communication to Choice Hotels & Staff Education on E Wholesale model Limit inventory, limit discount to 20% Avoid long term contracts, add black out dates Add clause to increase rates during peak times Get paid on time Frequency points are not required
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E Wholesaler StrategiesE Wholesaler Strategies
Implementing strategies to minimize threats and capitalize opportunities. Using Choice leverage: Negotiating with major e wholesalers to limit
discounts, mark-ups, terms Automating process, building interfaces between e
wholesalers and Choice CRS Allow hotels to maintain consistent pricing, reduce
costs, yield manage, payment upfront, measure Beta testing begun with Lodging.com, Travelocity,
and TravelWeb Driving traffic to Choicehotels.com
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Lowest Rate GuaranteeLowest Rate Guarantee
Best Rate Guarantee – not “lowest.” Two main objectives: Improve Choice’s ability to build customer loyalty
Drive customers from 3rd party sites to Choice brand sites
Generate repeat bookings on Choicehotels.com Reduce franchisee costs and reliance on e wholesalers and
weaken e wholesalers market opportunity
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Lowest Rate GuaranteeLowest Rate Guarantee
LRG implemented by Six Continents, Cendant, Hilton, Starwood Proposing Choice program similar terms and
conditions Exception - no penalty fee to hotels BRG promises if customers find lower rate
“online” hotel will match lower rate plus 10% discount
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Best Rate GuaranteeBest Rate Guarantee
Dist. Channel Guest’s Rate Hotel’s Yield
E-wholesaler $65 (30% mark-up) $50.00 (sold at $50)
Match e-whlsrs. rate Choicehotels.com $65.00 $65.00
Customer requests $58.50 $58.50 Best Rate Guarantee
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Best Rate GuaranteeBest Rate Guarantee
Choice Proposed BRG Terms & Conditions: Choicehotels.com guarantees to have lowest publicly
available rate on Internet (Neg. rates, group, etc., not included).
Guarantee applicable to all 8 brands, domestic only Phase II to include international hotels
Competing rate must be lower than rate booked on Choicehotels.com, must be publicly available, viewable and bookable on another web site for same hotel, room type, dates and number of guests
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Best Rate GuaranteeBest Rate Guarantee
Choice Proposed BRG Terms & Conditions: Does not include rates found on Opaque sites,
I.e., Priceline and hotwire Guest must first book on Choicehotels.com, have
confirmed reservation Guest must inform Choice of lower rate within
24 hours by completing online redemption form
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Best Rate GuaranteeBest Rate Guarantee Choice Proposed BRG Terms & Conditions:
If confirmed, Choice will honor lower rate, plus give an additional 10% discount
Hotels/franchisees will be required to honor lower rate, plus the additional 10% discount, no additional penalty
Hotels to manage Internet User Rate on Choicehotels.com Offer subject to change For participating hotels only (exploring legal
ramifications)
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Best Rate GuaranteeBest Rate Guarantee
Choice Proposed BRG Advantages: Potential of completing more transactions on
Choicehotels.com – lowest cost Increased franchisee profitability, ADR’s Improvement of reservation measurement Builds customer/brand loyalty Staying competitive Reducing E wholesaler threats
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Best Rate GuaranteeBest Rate Guarantee
Choice Proposed BRG Disadvantages: Cost (increase corporate cost to administer) Franchisees train staff on how it works Est. avg. hotels handling non-compliance of
BRG’s to be less than 5 per year Franchisee administration of some guest
confusion or non-compliance with program
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Best Rate GuaranteeBest Rate Guarantee
Choice Proposed BRG Timeline : Approvals Program implementation, touch point education
and communication plan, 60 days FSD’s and NSD’s refrain from soliciting hotels
Until automated interface, negotiations, etc., completed.
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Best Rate GuaranteeBest Rate Guarantee
Proposed Recommendation :Recommend Choice Hotels International
pursue proposed Best Rate Guarantee for all US Hotels as outlined at the November 2002 Meeting.