Maximise your Avios, air miles and hotel points

Expedia halts the roll-out of One Key – but it is too late for UK members

Links on Head for Points may support the site by paying a commission.  See here for all partner links.

Expedia Group, which primarily comprises Expedia, Hotels.com and rental site Vrbo, has halted the roll out of its new One Key loyalty programme.

The impact on bookings at Hotels.com has been so big that the company felt it had no choice but to stop.

Unfortunately, it is too late for members in the UK. The transfer of Hotels.com Rewards to One Key was already underway when the decision was taken. The US and the UK will be the only markets with One Key for the forseeable future.

Expedia halts the roll-out of One Key

This step back should not be a surprise for HfP readers. We had been predicting a weakness in Hotels.com bookings since the change was announced.

Under Hotels.com Rewards, you received 10% of the ex-tax value of your booking back in free night credits. The only snag is that you had to book 10 nights before you could cash out your reward.

Hotels.com Rewards worked well for a lot of people:

  • people who didn’t book enough hotel nights to earn status, or a worthwhile number of points, in any hotel loyalty scheme
  • people who were not prepared to compromise on location or hotel quality and always booked the most appropriate hotel for their trip, irrespective of brand
  • people who booked rooms for other people, or booked multiple rooms per trip, because Hotels.com Rewards paid you irrespective of the name on the booking
  • people who liked redeeming their rewards for larger rooms or suites, since the credit could be used against any room category – most hotel loyalty programmes restrict redemptions to standard rooms
Expedia halts the roll-out of One Key

Compared to this, One Key is an exceptionally poor programme. You only earn 2% back in OneKeyCash on the ex-tax value of your booking unless you have Hotels.com elite status. Your return has been cut by 80% compared to Hotels.com Rewards.

The only upside is that the 2% is immediately available to use – you don’t need to wait until you have done 10 nights to cash out.

Effectively, Expedia Group gambled. I suspect that:

  • it knew that it would lose the business of heavy bookers, for whom the 10% return was a big incentive and who had no problem booking the 10 nights required to trigger a reward
  • it thought that the loss of volume would be compensated with higher margins on the remaining bookings, since their spend on rewards dropped from 10% to 2% for no-status members
  • it thought it would attract some new casual customers who were attracted by the instantly available 2% return – light bookers are better off in the new structure, since the old scheme gave you nothing until you booked 10 nights

For various reasons, Expedia Group has now decided that it made a mistake.

Part of the issue is that, outside the US and UK, there are few countries where BOTH Expedia and Hotels.com are big players. If you’re not a user of both brands, and thus benefitting from earning and redeeming across both platforms, One Key is pure downside for most bookers.

Travel site Skift listened in to the quarterly earnings call last week and reported the following:

Expedia halts the roll-out of One Key

“Most international markets have only either Brand Expedia or Hotels.com operating at scale with limited Vrbo presence,” said Expedia Group CEO Ariane Gorin in her first earnings call running the show. “So we’re going to take the time to tailor our value proposition for these markets. In addition, this should minimize further near-term disruption to Hotels.com, which was the brand most impacted by One Key’s U.S. rollout.”

[…] Hotels.com was adversely impacted by the introduction of One Key in the U.S. and UK, officials said.

Chief Financial Officer Julie Whalen said Expedia.com was the least disrupted by the introduction of One Key, and it saw a robust 20% room nights growth in the second quarter.

“[….] with Hotels.com, when we moved to One Key, we sort of downplayed an advantage that Hotels.com had. It had a really big differentiator and its loyalty program (10 nights booked meant a free night),” Gorin said. “So the good news is that both of those brands have great brand awareness, have people who love to come back to them. But I’ve just realized it’s going to take work to get them back to where we want.”

Expedia Group has not broken out how poorly Hotels.com has been performing. What we do know is that Expedia.com saw a 20% increase in hotel room night bookings in the second quarter, but the TOTAL group number of hotel bookings was only up 10%. This means that Hotels.com must be flat at best.

What analysts didn’t seem to pick up on is that the Hotels.com figures are probably worse than they look. When accounts are transferred from Hotels.com Rewards to OneKeyCash, members see their outstanding partial rewards turned into a cash credit which encourages them to book.

For example, I was five nights towards my next Hotels.com Rewards free night. When my account was turned into OneKeyCash, this turned into $98 of credit. I am heavily incentivised to make my next hotel booking on Hotels.com to spend this credit which will boost their short term numbers – but once I’ve done that, I don’t see any reason to book with Hotels.com again.

The burning question is ‘What happens now?’.

Expedia Group cannot easily run two different loyalty schemes, depending on which country you live in. At the same time, going back to separate schemes would be very difficult now that Hotels.com Rewards credits have been turned into OneKeyCash.

I suspect that we will eventually see an overhaul of the earn rate at Hotels.com, moving it closer to the 10% return it was in the past – albeit with a discount to reflect the fact that you no longer need to do 10 nights to cash out.

best hotel loyalty promotions

Hotel offers update – October 2024:

Want to earn more hotel points?  Click here to see our complete list of promotions from the major hotel chains or use the ‘Hotel Offers’ link in the menu bar at the top of the page.

Want to buy hotel points?

  • Hilton Honors is offering an 80%-100% bonus when you buy points by 27th November 2024. Click here to buy.
Category

General

Comments (156)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Lev441 says:
    13 Aug13 August 05:25

    Finally some common sense..!

    It was a crazy thing to do and no wonder bookings have flatlined.

    I used to book most UK hotel stays with them for my business but since they changed the loyalty I have moved my bookings elsewhere…

    • F says:
      13 Aug13 August 05:55

      To be fair it is the rate of bookings growth that has flatlined, not bookings per se.

  • R01 says:
    13 Aug13 August 05:31

    What a shitshow. They are going to lose a huge chunk of their sales from loyal customers – me included – and then end up giving away all of their margin gains to try and win them back. Albeit, without the unique loyalty draw of the ten night requirement. I suspect the CFO drove this through without understanding why customers used them.

    • EC says:
      13 Aug13 August 07:56

      I had switched from Booking.com to using them, but now completely switched back. It should go down as a case study for how not to treat loyal customers

    • Jenny says:
      13 Aug13 August 08:20

      I can’t believe any CFO worth their salt would have been in favour of this. The outcome was blinding obvious to me, a chartered accountant.

      • AJA says:
        13 Aug13 August 08:36

        Retired accountant here and I agree with you Jenny. Seems accountants are easy to blame.

        • Rob says:
          13 Aug13 August 08:48

          The strategy is relatively simple. As a quoted company, Expedia Group will see a huge share price crash if it is seen as ex-growth.

          They can’t squeeze suppliers any further. Commissions are already above 20%. Part of the reason most new hotels are part of chains is that the total cost of being in the chain is well below 20% and they don’t need many platform bookings to fill.

          So where next? The only choice is to move on to stuffing customers. However, unlike Facebook, Amazon etc, there is no moat here. It is very easy to go elsewhere – for a start, you always have the direct booking option.

          It’s not going to end well. It will end up like eBay, still very profitable but fundamentally moribund.

          • anuj says:
            13 Aug13 August 14:48

            it’s a problem with our economic system that growth is wanted at all costs.

        • R01 says:
          13 Aug13 August 10:09

          Agreed a good accountant wouldn’t recommend this but the article quotes the CFO as saying “But I’ve just realized it’s going to take work to get them back to where we want.”

          • Stephan says:
            13 Aug13 August 11:51

            Actually it was the CEO (Gorin) who said they’d “just realised”. Inspiring stuff!

  • Geoff says:
    13 Aug13 August 05:33

    This makes me feel better as the company I work for isn’t the only one run by idiots

    • CarpalTravel says:
      13 Aug13 August 05:57

      Often these things are decided by people who think they are cleverer than they are. I know someone who used to work at Camelot back in 2013, when they increased the price of the Lotto to £2. He said that Camelot had projected roughly a 30% drop in sales, so still worth the increase. The reality apparently was that the drop was greater than 50%, wiping out the income benefit. Presumably it is part of the reason why a couple of years later they changed the number count to 59 from 49, further reducing the likelihood of paying out.

      • davefl says:
        13 Aug13 August 23:19

        I’ve just done a survey on a rewards platform about a forthcoming new lottery game that will be £2 x 2 min stake with jackpots up in the hundreds of millions and I think 69 numbers per ticket. I basically voted no to every single option, declaring only £1 tickets were worth bothering with

      • Chrisasaurus says:
        15 Aug15 August 08:42

        Likelihood of payout is not relevant since the prize pool was fixed.

  • CarpalTravel says:
    13 Aug13 August 05:48

    Having exclusively used hotels.com user for well over 10 years, I stopped when they transferred me over. Since then they have lost out on 29 nights worth of bookings I have made, and I am a nobody. I can only imagine how many heavy bookers have started to look elsewhere.

  • BJ says:
    13 Aug13 August 05:52

    The 10% back on 10 nights was hugely overrated by HfP and many readers IMO. The rarity of 20% c@shback via various sites compared to a few years ago being far more significant than the shift to OneKey. I suspect so many got hioked on the 10% that they did not even bother looking for the same hotel cheaper via other avenues. Like the Halifax Clarity card it was always just mutton dressed as lamb unless ofcourse you were abusing your employer.

    • ayearinmx says:
      13 Aug13 August 06:06

      When you book 100+ nights for work, and can then use the free nights for yourself… You can understand how good hotels.com was for some people

      • BJ says:
        13 Aug13 August 06:18

        Hence my closing remark.

        • ayearinmx says:
          13 Aug13 August 07:49

          I guess we have different definitions for “abuse”

          @qrfan… Unfortunately I stay in places where there aren’t chains

        • Thywillbedone says:
          13 Aug13 August 12:21

          Abusing your employer like spending half the day on a travel website posting innumerable comments??

      • Qrfan says:
        13 Aug13 August 06:21

        That’s true for any hotel rewards scheme. My brother cooked up ludicrous numbers at Marriott for personal spend from his work stays. You’d likely have some very nice perks and a lot of free nights/upgrades for your personal travel if you put those 100 nights directly to a major chain.

        • NigelHamilton says:
          13 Aug13 August 07:28

          Yes but usually you have to stay yourself at the chain. What people were doing with hotels.com seems to be the people who were in charge of booking the hotels were not necessarily the ones staying there.

    • TGLoyalty says:
      13 Aug13 August 07:31

      Like the Halifax Clarity card it was always just mutton dressed as lamb unless ofcourse you were abusing your employer.

      This makes no sense … how can a a free 0% FX foreign exchange fee credit card which transacts at Mastercard rate be 1) mutton dressed as lamb 2) be used to abuse anything.

      • Lumma says:
        13 Aug13 August 07:44

        Is it that when paying expenses, most companies will pay you back in pounds the exchange rate plus a presumed foreign transaction fee, so you make profit on each purchase?

        • yonasl says:
          13 Aug13 August 08:05

          Please show me a company that stupid! At every employer I have been you show the local bill and your credit card invoice in pounds. The real scam is, when employers are paying, to use your Amex or similar (to get points even if you pay 3% fx fee) when you should be using the Halifax instead.

          • CamFlyer says:
            13 Aug13 August 08:10

            No scam there — its the employee’s credit rating atvstake, and in many cases fronting the payment (ie, providing working capital financing, even if covered by a credit card) and taking bankriptcy risk ifbthe empllyer goes into administration before the expense claim is paid. If the employer wants to regulate FX charges on employee card payments it can mandate the use of a corporate purchasing card.

          • TGLoyalty says:
            13 Aug13 August 08:48

            Not really a scam. If the charge was genuine. No employer should be worried about 3% when you’re giving it all your free time.

          • Rob says:
            13 Aug13 August 08:53

            What companies do you work for?! I’ve only worked at places where you self certify your expenses or a manager scribbles a cross on a form he hasn’t looked at. At HfP we don’t even ask for receipts, I just pay what I’m asked to pay.

          • Andrew. says:
            13 Aug13 August 09:19

            Under no circumstances should an employer be instructing an employee to use, hold or apply for a financial product to meet the needs of the business (other than you’ll need a suitable UK account for them to pay your wages).

            Technically, many retail card T&C’s now specifically forbid the use of a personal card for business purposes – it’s a bit of a grey area for expenses. My boss was recently refused a temporary limit increase on his personal card to buy last minute flights for our team – as it was clearly for business use. He was then flabbergasted when I bought the tickets using a card with triple his limit on a quarter of the salary.

      • BJ says:
        13 Aug13 August 08:27

        Clarity is mutton dressed as lamb because other cards always existed which were fee-free but dud not need the hassle of paying off by a certain date. Not suggesting any abuse in case of the card.

        • TGLoyalty says:
          13 Aug13 August 08:46

          What? It was fee free for all purchases until your statement date like all all other credit cards.

          What it allowed you you to do no others did was withdraw cash for no fee as long you paid it off immediately. Which other card allowed that 20 years ago?

          • NorthernLass says:
            13 Aug13 August 11:04

            This is not what “mutton dressed as lamb” means! I suspect you want something more like “lipstick on a pig” (though their facial features might be perfectly alluring if you’re also a piggie!)

            But – I did use hotels.com quite a lot in the past. I’ve stopped recently, not really because of the changes in the program but because booking.com seems to have so many more properties in places I want to stay which aren’t served by the usual chain suspects. I recently booked a short road trip through central Spain, all via booking.com which has a wide range of properties in lesser known locations like Ciudad Rodrigo.

          • BJ says:
            13 Aug13 August 11:12

            There are and were fee-free debit cards so what’s the point if a credit card that needs the hassle of rapid bill settlement for the same result?

          • Rob says:
            13 Aug13 August 11:15

            S75 for a start

          • Paulo says:
            13 Aug13 August 11:45

            Santander Zero Mastercard. Sadly discontinued but I’m grandfathered in.

        • BJ says:
          13 Aug13 August 11:17

          @Anna, I took a more liberal interpretation of making something appear better than it was 🙂

  • ayearinmx says:
    13 Aug13 August 06:08

    Is there any way of setting up a foreign account?

    • BJ says:
      13 Aug13 August 06:22

      Wondering if I can just change address on account, I have card at that overseas address too. Doubt it’ll work though as account has already changed to OneKey.

    • PGR says:
      13 Aug13 August 08:03

      On the surface there doesn’t seem to be anything stopping using a VPN paired with a generic foreign address, then changing your billing address as needed? Could be wrong

  • Mouse says:
    13 Aug13 August 06:11

    My (UK-based) account hasn’t transitioned yet – does this mean it will remain as is?

    • Daniel says:
      13 Aug13 August 06:54

      I was wondering the same, mine still shows the old program and balance.

      • Rob says:
        13 Aug13 August 07:27

        Same here, I read in the FAQs that they were doing the switch based on the region you have made the most bookings. Rather than where the account is held.
        I imagine they are in a right mess internally with this one!

      • Rob says:
        13 Aug13 August 07:28

        No, it will still happen.

        • Daniel says:
          13 Aug13 August 08:17

          What is strange is that my folks account shows an expiry of September 2024 even though their last activity was in December 2023. Not sure whether to risk that AwardWallet is just pulling wrong information, or to do a stay somewhere to trigger activity again….

  • Goldflyer says:
    13 Aug13 August 06:44

    Quelle surprise! Another mad decision driven by accountants who don’t understand business and the motivation that drives customer behaviour. I completely stopped booking through Hotels.com when my account was moved to One Key, and it’s now going to take a lot to get me back as a customer.

    • BA Flyer IHG Stayer says:
      13 Aug13 August 06:51

      Stop blaming accountants for this sort of decision!

      It’s as much driven by the marketing and loyalty ‘experts”.

      And those really to blame are those on the exec team / board who get paid to make these sorts of decisions looking at things in the round.

    • Scallder says:
      13 Aug13 August 07:07

      As an accountant, I’ll tell you that any decent accountant inside Expedia would have told them how stupid this idea was. Much more likely someone in marketing / loyalty team who thinks they know better…

    • TGLoyalty says:
      13 Aug13 August 07:26

      No finance person in their right mind would have advised this was a good idea.

      • Mikeact says:
        13 Aug13 August 07:42

        I cant believe how major companies like these can totally screw up …Hotels.com wasn’t perfect but suited us fine around the world. Trouble is, going forward, we have many bookings….now I guess, I’ll cancel the lot and start again.

    • jj says:
      13 Aug13 August 08:24

      Have you seen many company org charts where the CFO runs the loyalty scheme? Nope? Me neither.

      The blame for this sits firmly with the CCO.

    • AJA says:
      13 Aug13 August 08:25

      @Goldflyer what makes you think it was accountants who decided this was a good idea? You don’t need an accountant to work out that 2% paid out immediately is less than 10% paid out even after 10 nights.

      But it does take skills to work out that losing revenue resulting from changing schemes is likely to be much higher than the 80% rebate you think you’re saving.

      An accountant would have informed them that this was a bad idea and just a 10% reduction in gross revenue would make the change loss making.

      Offer 10% rebate on £100 or 2% rebate on £90. Which scheme would you choose?

      The gamble is that they thought people would still book via at hotels.com even though they had decimated the reward scheme. In reality people are smarter than that and have simply abandoned hotels.com as there’s no longer the incentive to book via them.

      They’ve damaged the brand. Just like Gerald Ratner did with his “because it’s total crap” comment.

      The question now is can they recover the lost business and how long will it take?

This article is closed to new comments. Feel free to ask your question in the HfP forums.

New to Head for Points?

Welcome!  We’re the UK’s most-read source of business travel, Avios, frequent flyer and hotel loyalty news. Let us improve how you travel. Got any questions? Ask them in our forums.

Get 25,000 Avios with the Barclaycard Avios Plus Mastercard

NEW: Sign-up bonuses boosted to 3,000 and 18,000 points

Latest Forum Posts

Get 40,000 bonus points (worth 40,000 Avios) and £300 dining credit with The Platinum Card

Check reward flight availability instantly for free!

See a whole year of reward seat availability on one page at SeatSpy.com

Get £10 when you spend £150 on your free Currensea card

Booking a luxury hotel?

Our luxury hotel booking service offers you GUARANTEED extra benefits over booking direct. Works with Four Seasons, Mandarin Oriental, The Ritz Carlton, St Regis and more. We've booked £1.7 million of rooms to date. Click for details.

SME? GET POINTS WORTH 10,500 AVIOS WITH CAPITAL ON TAP

Get 20,000 bonus points (converts to 20,000 Avios) with 'first year free' American Express Gold

The UK's biggest frequent flyer website uses cookies, which you can block via your browser settings. Continuing implies your consent to this policy. Our privacy policy is here.

Got it!