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Hoteliers sue Choice and Wyndham over hotel loyalty programs
Are hotel companies illegally taking loyalty fees from hotels, where guests who don't know they've been enrolled in a hotel's loyalty program are staying? That's the question under discussion after franchisees filed class-action lawsuits against two major hotel brands.The suits, filed in U.S. District Court in Orlando last month, allege that Wyndham Worldwide Inc. and Choice Hotels International Inc. have "inflated the ranks of their loyalty programs and are collecting fees from hotels when those guests stay at franchise properties," according to a story in the Orlando Sentinel. The story goes on to say lawyers for the hoteliers have asked for more than $260 million in damages from Wyndham, and more than $225 million from Choice.
Here's the issue:
Franchisees say the hotel companies are 'auto-enrolling' guests who book online into hotel loyalty programs, unless the guest opts out at the time of booking. Then, the hotel is matching personal data (emails addresses, home addresses, etc.) to the guest to reward points (not hotel membership numbers), which franchisees say results in hotels collecting program fees of up to 5 percent of gross room sales generated by guests "who may or may not have stayed at their property because of the loyalty program, and who may not have known they were entitled to benefits."
"The real purpose of a rewards program is that you build customer loyalty," David Wood, an attorney for the franchisees, told the Sentinel. "In that event, the hotel franchisee would benefit. But under proactive matching, that doesn't happen."
Wood also goes on to say that charging the extra fee for the loyalty programs is against the franchise contracts of both companies and is a violation of Florida's Deceptive and Unfair Trade Practices Act.
Readers: What do you think? If it costs you nothing, do you care if the hotel auto-enrolls you into their loyalty program?
"The real purpose of a rewards program is that you build customer loyalty," David Wood, an attorney for the franchisees, told the Sentinel. "In that event, the hotel franchisee would benefit. But under proactive matching, that doesn't happen."
Wood also goes on to say that charging the extra fee for the loyalty programs is against the franchise contracts of both companies and is a violation of Florida's Deceptive and Unfair Trade Practices Act.
Readers: What do you think? If it costs you nothing, do you care if the hotel auto-enrolls you into their loyalty program?
Reader Comments (Page 1 of 1)
Alan Jan 15th 2011 8:15PM
I am a member of both programs, and am happy to take advantage of the benefits from them. Both companies have some very good properties available.
Judi Jan 15th 2011 8:31PM
I have always wondered how Choice Privileges would offer a stay 2 nights get one night free program when all you ever got was points that would never have totaled a 1 night stay anywhere. You would be lucky to get let's say 1,000 points in the promotion but the minimum motels in the program offered 8,000 points for a 1 night stay - so you never got the one night free. I have been with this program for a lot of years but never once got a "free night"
WILLIAM SOWLES Jan 15th 2011 9:19PM
Hilton's Honors is the best in the business!
regina Jan 15th 2011 10:30PM
I belong to wyndham rewards...still don't kwow how many points are needed for a "free" night...it"s a battle to get credit for stays....taking many follow-ups and weeks...I think they're just trying to discourage people...but since I'm a "guest" 2-4 nights a month and have been told by motel manager that he is charged $5.00 a night for my rewards I'm not giving up!!!
strongwoman Jan 15th 2011 10:30PM
I hate Wyndham hotel they charged me 1000 dollars after leaving conffetti in a room, nothing damaged just some extra vacuming, they were jerks. The room was old and the sheets were actually stained when I got there.
Ken Jan 15th 2011 10:32PM
I have been enrolled with Choice Priveleges for several years.Have earned over 12 stays during this time. The rewards program works well!
Would be a benefit to anyone who does hotel stays. You also have to be savy to the hotel ratings. The more points used the better the hotel.
David Jan 16th 2011 12:26AM
Have been a member of both and now belong to Hilton Honors. It is the best by far!
John S Jan 16th 2011 12:40AM
If they are charging the Franchise, it raises the cost, and they have to charge more per room. I'm beginning to wonder if these business schools have a class in scamming.
hey gr8! Jan 16th 2011 4:04AM
um, first i am a member of hilton as well HOWEVER the best reward programs are those attached to airlines or regular credit cards where points can be used for anything.
This brings me to my next point. I am kind of dumbfounded reading all the complaints. Do/did any of you go through hotels.com? a bit of fyi, they now have their own reward program that entitles you to rewards at more than just two. You have to book thru them, of course, but they rock. better than travelocity, they do continuous follow-up from the onset of the initil call until after you get home... check them out and if your current reward program isnt working for you; get out of it!
handsome Jan 16th 2011 5:30AM
Traveling as a tour manager I am a member of multiple programs. My favorite being the Choice Hotels program. But, I don't think it's fair to the properties to be charged the fee to a hotel if the guest is really not a member. I also feel that it is pretty unfair that their program only pays the property $18.00 when a member redeems there points for a stay, regardless of whether it takes 3,000 or 20,000 points from the members account. It's not fair to the member as well. Also with the choice program, as previously mentioned. Good luck finding a property that they rate at 3,000 points to stay at for an equilivancy of the stay 2 nights get one free. Over all though, I've earned over 30 nights on the program and have always been happy with the properties.