Hotels.com adds a booking fee for reward nights

Sure, it is only $5. And it is a relatively easy fee to avoid. I just wish Hotels.com was less sketchy about why it was changing its loyalty program.

The company announced a $5 fee for rewards bookings, effective 27 November 2019. The fee applies for each night booked, not per booking. And the justification given by the company is rather specious.

From 11/27/2019, there’ll be a redemption fee of $5 for every reward night redeemed; however no redemption fee will apply if reward nights are redeemed using the Hotels.com app.

We’re making this change to cover some of the costs of running the program, so more than 43 million Hotels.com Rewards members can continue to benefit from the program.

So, every time you collect 10 nights, you’ll get 1 reward night. You pay the redemption fee, as well as the usual taxes and fees. Also, remember, you won’t have to pay a redemption fee when you redeem on the Hotels.com app.

The fact that the fee is waived for bookings made through the app is telling. It isn’t like the app is cheaper to maintain than the website. Or that bookings made through the app are cheaper to process than through the website. The company just really, really, really wants you to use the app. It has tried the carrot approach in the past with special deals and discounts offered only via that channel. But that’s not enough, so here comes the stick. Failure to use the app earns program members a $5 penalty.

Does this really skew the value of the program? Probably not enough to drive customers away. And pushing more consumers into the app helps reduce competition and drives the stickiness that programs love from their marketing efforts.

Creating barriers to redemption also raises the risk of customers looking elsewhere to make bookings. Especially when the rates are generally consistent across all of the Expedia brands (including hotels.com), moves like this could push consumers to one of the other verticals or to a competitor. Oopsie.