Hotel loyalty programs are offering deals at all-inclusive resorts that undercut negotiated group rates, causing headaches for travel advisors, according to the Destination Wedding & Honeymoon Specialists Association (DWHSA).
The DWHSA said a recent survey found that 95% of members have lost group guests to loyalty program bookings in the past year.
The trend has left travel advisors scrambling to recoup bookings and manage client expectations, while trying to preserve their commissions. In some cases, advisors are paying out of pocket to combat policies unfriendly to the trade, the DWHSA said.
During a media call this week, travel advisors told their stories.
A disruptive Thanksgiving offer
Two days before Thanksgiving last year, Cheryl Bailey, owner of Yellow Umbrella Events in Austin, Texas, woke up to dozens of emails from travelers in her 31-room group booking for a wedding at a resort in Mexico’s Riviera Maya. They all wanted to cancel.
They were lured by the resort’s Thanksgiving sale offering room rates 40% to 60% lower than rates in her group contract. And the travelers wanted to act immediately to take advantage of the limited-time sale.
Bailey contacted Classic Vacations, her wholesale partner. Classic contacted the resort, which said they’d get her answers in a week or two. Considering the time limitations of the sale, Bailey knew that wouldn’t work. She contacted the client and suggested they cancel the group. The couple getting married would lose perks (room comps and a cocktail party) and their deposit, plus get hit with a cancellation fee on their room. But the savings was still too large to ignore.
“If it were my wedding, I would have canceled that group in a heartbeat,” Bailey said.
The couple opted to cancel while letting their guests book individually. Bailey and her team got to work rebooking all 31 rooms, and Classic had to step in again when the bookings set off red flags at the resort, which stopped the reservations.
Ultimately, the couple was happy with Bailey and her team but upset with the resort, she said. They booked their wedding ceremony at an off-property venue. While Bailey rebooked the rooms at significantly lower rates, she managed to sell room upgrades to most group members, largely preserving her commission.
Better deals, better terms for consumers
In the last year, Michael Goines, owner of MD Luxury Travel in Greensboro, N.C., has seen two critical issues. One is with the minimum length of stay. If his group contract requires a four-night stay, in some cases guests are finding three-night stays at the resort on their own. Goines has asked partners if he could be allowed to sell three-night stays, but to no avail.
And, depending on the property, deposit terms have been different for group contracts and consumer-direct bookings.
Shelli Nornes, president and CEO of Romance Travel Group in Mankato, Minn., has seen a lot of clients opt to book direct for perks like transfers or excursions. Lenient room cancellation policies — some resorts are letting direct customers cancel up to 24 hours before scheduled arrival — are also a problem for advisors.
Further, guests often can’t earn loyalty points on a travel agency’s group rates, putting advisors at a disadvantage.
“We can’t compete with that,” Nornes said.
Kim Goldstein, president of Journeys Inc. in Raleigh, N.C., also brought up a direct consumer’s superior cancellation policies, which could save them from having to buy travel insurance.
Shrinking value in group rates
The DWHSA says that post-Covid, all-inclusive resort policies have created difficulties for travel advisors and clients. Pain points include drastically shortened deposit deadlines and unusually early dates for final payment.
Most concerning to the DWHSA, however, is the undercutting of group rates. According to the trade group, hotel chains have become more aggressive in the pursuit of last-minute bookings through their loyalty programs.
“The entire rationale for being part of a group has been turned upside down,” the organization declared in a white paper, saying that the traditional advantage of blocking rooms for better rates no longer holds true.
A powwow with all-inclusive resorts
The DWHSA has scheduled a “Group Booking Summit” for Feb. 26 in Miami, where top-performing advisors will meet with resort executives to discuss potential solutions. The organization said it has already begun one-on-one meetings with 16 all-inclusive brands and is reaching out to 23 smaller operators to address these concerns.
Hawks said midsize all-inclusive brands have been more receptive than the large companies. He mentioned AIC Hotel Group as a company open to dialogue. AIC manages sales and marketing for luxury all-inclusives in Mexico and the Caribbean under brands like Hard Rock and Unico.
“We recognize the challenges travel advisors face when group rates are higher than individual rates, especially when last-minute bookings offer more flexibility,” said Ash Tembe, vice president of North America sales at AIC Hotel Group. “To address this, we have a price-match policy that ensures if FIT rates drop due to promotions, we’ll match those rates for group bookings.”
Playa Hotels & Resorts, which owns and/or manages 24 resorts in Mexico, Jamaica and the Dominican Republic, also acknowledged the complexity of the situation, while emphasizing that its group rates reflect enhanced offerings and experiences not available to individual travelers.
Playa’s portfolio includes properties operating under brands like Hyatt Zilara, Hyatt Ziva, Hilton All-Inclusive and Marriott’s Luxury Collection, among others.
“We highly value our partnerships with travel advisors and the important role they play in connecting us with group clientele,” said Dean Sullivan, Playa’s senior vice president of commercial marketing. “While pricing strategies can vary across the industry, we strive to offer competitive group rates that reflect the added value, amenities and personalized services provided for these bookings.”
DWHSA executive director John Hawks said conversations with all-inclusives are intended to address concerns on both sides. Resorts have complained that when travel advisors don’t fill all of their allotted rooms, the resorts have just three or four months to sell what’s left over, leading to discounting, Hawks said.
To address this issue, DWHSA members, including Nornes and Goldstein, are working on a training program designed to help less experienced advisors better manage room blocks and other aspects of group bookings.
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