Wyndham Waives Phone Fees

Wyndham Hotels & Resorts' announcement this month that it was waiving charges for in-room local and long distance telephone calls for members of its frequency program has cast a spotlight on a source of hotel revenue that has become a significant irritation to travel buyers in recent years.

To take advantage of the newly free services—which also include complimentary high-speed Internet access, copying and faxing—travelers already must be members of the ByRequest program or sign up before Sept. 30. New members also are required to stay at a Wyndham property at least once before that date to be eligible.

"We surveyed our customers and are confident this will be a success, especially with business travelers," said Fred Kleisner, Wyndham CEO.

The company estimated that a typical business traveler accrues $40 in phone and related charges during a two-day stay.

Since the Wyndham announcement, no other hotel company has moved to match or even comment publicly on the offer, which is surprising since frequency programs are among the most highly competitive aspects of hotel marketing. "At this time, we just don't feel this is a strong enough benefit for members," said Krista Gresham, director for consumer loyalty programs at Radisson Hotels & Resorts. Radisson's program is called Gold Rewards. "Based on our consumer research, Radisson would rather offer extra points and upgrades."

Hotel room phone and related charges have become a major sore point for buyers, who feel these charges are unfairly high, according to Bjorn Hanson, head of the hospitality and leisure practice at PricewaterhouseCoopers. "The lack of disclosure is an additional cause of irritation. That is, that the extent of the charges often isn't clear until the traveler checks out, when there usually isn't time to contest the bill," Hanson said.

For buyers, frequency programs generally are a double-edge sword. On the one hand, travelers who are members of frequency programs of chains in the company's hotel program are more likely to comply with policy. By contrast, travelers who are members of frequency programs of chains not in the program are more apt to seek ways to stay outside of policy.

The Wyndham program differs from Radisson Gold Rewards as well as Marriott Rewards, Starwood Preferred Guest and Hilton Honors by emphasizing enhanced service as opposed to points and miles, which are good for free hotel stays and airline flights. Since telephone charges, regardless of how exorbitant, typically are reimbursed by the company, it remains to be seen whether travelers will be more interested in obtaining points and miles, which they usually are allowed to keep for their own use.

"For any hotel company setting up a frequency program, the question is, 'How do we create added value for our best customers?' " said associate professor at the Harrah College of Hotel Administration at the University of Nevada, Las Vegas, Stowe Shoemaker, who specializes in loyalty marketing. "Wyndham has chosen to do it by waiving phone charges, the added value being the time saved having to expense phone charges as well as the cost savings."