Just like Orbitz was launched by the major airlines as their own comptitive response to online travel agency sites like Expedia (though ironically Expedia now owns Orbitz, and Orbitz may have started out as a stalking horse to try to blackmail Expedia into turning over an ownerhip stake to the airlines), several hotel chains got together to start an online booking site of their own — Room Key.
Room Key is a metasearch site that displays hotel rates for their founding hotel chains and commercial partners. When you select a hotel, you’re directed to the hotel’s website to complete the booking. As a result:
- You still earn points and status credit for your stay
- You don’t get treated as an online travel agency customer
My View at the Key Bridge Marriott in a Room Booked via Getaroom.com
On Thursday, Room Key’s communications firm reached out to let me know that they now had access to these member-only rates. Now I see they out this morning with a public push. (Oddly today’s push came with an embargo, Thursday’s did not, oops!)
This is a really important development in the hotel booking space.
- Online travel sites are useful as one-stop shops to compare options for consumers who don’t know up front which hotel they want to book. Their technology is at least marginally better than that of the major chains. They compete to show consumers what they want as quickly as possible. So they provide a better booking experience.
- Telling consumers that they’re going to pay more for that better booking experience is only one piece of the puzzle. The other important piece is to give consumers the booking experience to help them find the right hotel for them, at the right price.
For hotel chains to shift consumers to book direct, they need to:
- show consumers the product that best meets their needs
- Offer consumers the best price on that product
- Give them the best user experience
Room Key is a start, and comparing rates inclusive of ‘members only’ rates is a start. But they have a long way to go.
Direct Rates Aren’t Always Lower, and OTAs Aren’t Out to Get You
Room Key’s marketing doesn’t quite match reality. They’re aggressively attacking the major online travel agencies like Expedia, Orbitz, and Hotels.com — with part truth, part fiction.
Online travel agency sites do often offer better rates than booking direct — either because of a package rate offered through the online booking site and not through the chain’s own channels (which are not coincidentally usually not eligible for best rate guarantees) or because the online booking site will still be selling base level rooms when the hotel chain’s channel has closed off that room type and is only selling more expensive premium rooms.
And it’s not really fair to say that the online travel booking sites are displaying whichever hotel offers them the most commission, rather than the hotel that best matches your preferences. It’s true that Expedia now lets hotels bid to improve their search placement. So Expedia seems to have edged away from doing its best to find customers the best deal, to a model where they’re selling customer eyeballs to advertisers (hotels).
This bidding still happens at the margin, and even Expedia (while other online travel sites more explicitly) are trying to match hotel to consumer search preferences because consumers search many sites when booking a trip and if the booking site doesn’t do a good job of matching consumer preferences they lose the sale to someone else (even in a world where Expedia and Priceline own so many of the sites). They want a sale because it’s better than losing the high margin sale.
Room Key Doesn’t Always Give You the Best Rates — Or All Hotel Choices
So how does Room Key do? I took a look at a stay in Arlington Virginia for later this week.
The site was founded as a joint venture between Choice Hotels, Hilton, Hyatt, Marriott, IHG, and Wyndham. So the first thing I notice is: where are all the Starwood hotels in my search results? There aren’t any. Presumably that will change with Marriott’s acquisition of Starwood.
Room Key is showing you hotel sites’ own rates, but it’s not always showing the cheapest room type and price is still sometimes being beaten by online travel agency sites.
Room Key has the Ritz-Carlton Pentagon City for $464.
Kayak.com reveals that pretty much everyone else has it for less:
Room Key has the Hyatt Arlington for $349.
It turns out they’re showing the price for 2 queen beds, but there’s a one bed room that’s cheaper. Not everyone may want the smaller room, but as a Gold Passport Diamond eember I’ll book it and be 99% confident I won’t be assigned to it. So I do better going to Hyatt.com rather than booking through Room Key.
And of course there I’ll find the AAA rate for even less.
A Step Forward, But Not Yet a Giant Leap
‘Book direct’ initiatives miss the point. Even if you’re going to get a lower rate booking at Hilton’s website or Marriott’s you don’t necessarily know you want to stay at a Hilton or a Marriott.
So metasearch matters, and metasearch inclusive of these rates matters. In that sense, Room Key has made a step forward in offering consumers an option that helps them do what the chains want them to do — book direct.
However since they’re still getting beaten by OTA rates, and best rate guarantees are too weasely (and for luxury hotels especially you’re really better off not booking direct), Room Key isn’t your one-stop booking shop.
That’s mostly because the reality doesn’t match the hotel chain marketing that they really offer the best rates directly, but also because Room Key is privileging its founders when they ironically criticize OTAs for privileging hotels paying higher commission, and because the site isn’t displaying pricing for all room options that are bookable direct.
I’m just grateful I don’t get Room Key popunder ads every time I search Hyatt.com anymore!