Orbitz, the online travel booking site, is launching a new rewards program that it hopes will make travelers come to it as quickly for a hotel room as they might when reserving a flight.
The program allows members to earn loyalty currency, or "orbucks,'' as soon as they book a flight, hotel or travel package that they can redeem to lower the cost of a hotel stay.
And unlike many loyalty programs, redemptions can be immediate when booking a flight. A traveler who books a flight can use the loyalty currency that's earned to bring down the price of a hotel room they're booking for the same trip.
"I think historically people thought Orbitz is where I book my air,'' says Chris Orton, president of Orbitz.com. Now, travelers can see that "the same place I book my air, is a great place to book my hotel . ... The program is designed to give them an incentive.''
When reserving a hotel room, customers earn orbucks equaling 3% of the cost, while booking a flight or travel package will earn orbucks equal to 1% of the price. There's an extra bonus for booking a hotel room on Orbitz's mobile app, with travelers able to earn loyalty currency equal to 5% of the price.
That means, for instance, that if a traveler books a two night hotel stay that costs $200, they'll earn $6 in orbucks, which is equivalent to $6 off the price of another hotel stay. They'll earn $10 in orbucks if they book the stay through Orbitz's mobile app.
Some other online travel booking sites also have loyalty programs. For instance, Travelocity has a program linked to its Travelocity Rewards American Express Card that allows card holders to earn a point for each dollar spent, and to get three points for every dollar spent with Travelocity. But customers need a minimum of 5,000 points to start redeeming them, with that amount adding up to a $50 credit.
Meanwhile, Expedia reward program members can rack up points by booking everything from a flight to a helicopter ride through their site. The minimum amount for redemption is 3,500 points, and points can be used for both hotels and flights.
Orbitz says that it will allow travelers to combine deals, using their loyalty credits, along with any discount codes or other promotions to chip away at the price of a hotel room. And, through Nov. 30, if a program member pays to check their first bag, Orbitz will reimburse them with $25 in orbucks.
Maggie Rauch, a travel analyst with PhoCusWright, says that Orbitz has lagged behind its online peers in hotel bookings, which has left it with "a competitive disadvantage,'' particularly since myriad mergers in the airline industry have left fewer carriers to choose from and airlines have gotten better at encouraging fliers to book directly through their specific sites.
"It's easy for a consumer to say I can go to the sites of these three airlines and do my travel research that way,'' she says. " But with a hotel there are so many options, people are more likely to go through an intermediary. ... There's a better opportunity in hotels right now.''
Giving extra orbucks to those who book a hotel through Orbitz's mobile app could also pay off over time, Rauch says.
"It's more long-term,'' she says of the strategy. "As people are booking more and more through mobile, they're hoping when they do, that they'll do it with Orbitz.''
Still, while a frequent flier program may encourage some travelers to stick with a particular airline, loyalty programs are less of a lure for online travel booking sites, Rauch says. Pricing, ease and selection tend to matter more to their customers.
"We haven't seen loyalty programs be a big driver in choosing to book with one site vs. another,'' she says. With the new rewards program, Orbitz is "doing some interesting things, like the launch promotion with the free bag. ... They're definitely going into it pretty aggressively. But it's hard to say whether it will have the desired effect.''
But Adam Hill, a physician based in New York City who was part of the new Orbitz program's pilot phase, says he's been pleased.
Previously, he'd go from site to site, looking for the best deal, and he found them to all be about the same. "I didn't have loyalty to any one of them,'' he said. But after becoming part of its new program, he's been going to Orbitz for pretty much all his trips.
Hill appreciates being able to combine his credits with promotion codes and other discounts, a feature he says is unusual for a loyalty program. Stacking deals recently allowed him to shave 40% off the cost of a hotel he's headed to in New Orleans. "My hotel is going to be a lot cheaper,'' he said. "If I can buy through (Orbitz), I will.''
By Charisse Jones, USA Today