Could this new hotel search engine steal business from OTAs?
Roomkey.com is unlocking a new idea in online travel. Launched as a beta test this January, the online search engine provides a one-stop solution to search, compare and book a room directly through a hotel website.
Developed by John F. Davis III, formerly CEO of Birch-Street Systems, the company has partnered with major hotel groups, including Choice Hotels International, Hilton Worldwide, Hyatt Hotels Corporation, InterContinental Hotels Group, Marriott International, Wyndham Hotel group and Best Western International. And, that’s only the beginning.
The concept was conceived in 2010 after Davis discovered online travel agencies (OTAs) were displaying false information and accepting commission rates as high as 30 per cent.
Now, with Room Key, guests can connect directly to the hotel site instead of booking through the OTA, giving hoteliers the advantage. “[The hotels] would rather have guests book directly through their own systems, so they know who’s coming and what their guest history is,” explains Davis. “We put the guest directly in the hotel reservation system.”
Consumer confidence is also a major selling point. Research shows that by the time a guest reaches a brand.com site, 90 per cent of the time they leave to search deals elsewhere, searching up to 15 different sites before booking their hotel. Room Key was designed to discourage consumers from leaving the site by offering other available hotels prices, even competitive prices in the area. And, a partnership with TripAdvisor means there will be hotel reviews on the site, too.
Earning guest loyalty points is also a big seller for the consumer. “Nobody does that but the brand.com. We are the only third-party site where you can actually earn your points,” Davis says.
Larry Mogelonsky, founder of LMA Communications Inc., a Toronto-based agency, isn’t so sure the website will be a success. “It’s great conceptually, and I do believe the goals of Room Key are correct, the objective is correct, but the execution is unattainable given the massive lead by the OTAs and their high dollar advertising spend,” says Mogelonsky. He explains the site targets consumers who read travel magazines and pick a destination based on its rating. It appeals to a low percentage of the population, says the LMA founder, the other 99 per cent who use OTA sites want to book a flight, hotel and car rental at the same place. Mogelonsky believes marketing is another concern for the start-up, as OTAs have a 10-year advantage on Room Key and a hefty marketing budget.
Either way, Room Key execs are keen to sign up more hotels. Davis says the goal is to build awareness and grow with more hotels, including independent properties and boutiques. “Today, we’ve got about 30,000 hotels on the site, and I want 50,000 to 60,000 by the summer. Then I think it will peak at about 80,000 worldwide,” he says.
Website inefficiencies can be costly, and problems with pricing, site functionality and product description are some of the top reasons for lost travel purchases online, according to QuBit, a London, England-based web technology and research firm, which analyzed data from 8,000 travellers. “In a market where travel buyers are becoming more price constrained and picky in their choice of supplier, travel retailers simply can’t afford to be losing sales to basic mistakes,” said Graham Cooker, CEO of QuBit.
Mastering Mobility (Mobile Website for Hotels)