Roomkey.com - Keys to the Castle for Hoteliers?

Roomkey.com, a new hotel metasearch site created by six of the largest hotel chains launched this morning.

With industry vet John Davis at the helm and backing from Choice, Hilton, Hyatt, IHG, Marriott and Wyndham, it somewhat resembles the industry's efforts to drive down costs and create consumer choice several years ago when a similar group created Travelweb.com - same CEO, slightly different group of hotel brands (noticeably absent from the group this time around is Starwood Hotels and Resorts Worldwide.) Travelweb was sold to Priceline.com and formed the basis of their non-opaque hotel product in North America.

Different this time around is metasearch. Roomkey is a pure meta play with room results returned in a nice, clean tile format:


Prior to the launch, the group purchased hotelicopter which had built a nice technology platform and user interface (as well as the awesome flying hotel ad that you may remember)

Clearly, and as expected, the call to action is a link to book at the sponsor's branded websites.

Roomkey (thus far) is a tool for comparing prices between hotels, not prices from different channels for the same hotel a la Kayak. Kayak pulls together disparate prices from various sources:


Multi-channel search, which Kayak never really delivered on the air side, is actually quite strong for hotels - and apparently, still an important issue judging from the sample above in which several of the founding members appear to be undercutting their own websites in various channels which Kayak is able to find and display.

Inventory today appears to be limited to the founding chains but we are sure that will grow, at least in critical markets such as New York and Las Vegas.

Hotel descriptive content on the beta site is decent with the usual photos and descriptions, although some brands (who shall remain nameless here) still seem to be returning content in ALL CAPITAL LETTERS. Given it is a beta, there are some photos with slightly strange descriptions: "NYCGH_P015 Exterior" but this will no doubt be cleaned up in due course.

That said, a great feature is the clear link to the hotels' property page where the rich content (and booking opportunity) lives.



Oddly, star ratings are included in the search results but it isn't clear how those stars are determined. In the past, the sometimes seemingly arbitrary OTA star ratings have been a source of frustration for hotels and brands alike. Roomkey promises to add user reviews shortly which should provide another, often more reliable way for guests to gauge hotels.

The hotel chains are not resting on their laurels after their past distribution wars with online travel agents (OTAs) and other distribution channels. Once fully built out with a mobile site, more inventory, reviews, Roomkey could be a potent weapon for consumers who want to be able to compare locations, features, rates across multiple chains and brands. With Google rapidly moving into the travel (and hotel) space and OTAs continuing to gain share, Roomkey will be another arrow in the chain's quivers to drive branded website growth and control distribution.

Glassdoor: Employee Satisfaction (or lack thereof) in the Travel Industry

Glassdoor.com, a cool website where "anyone can find and anonymously share an inside look at jobs and companies" has provided an interesting peek at job satisfaction inside the travel industry.

Travel is probably an industry Glassdoor knows something about given the site's founders which include such industry notables as Bob Hohman (Hotwire, Expedia) Tim Besse (Expedia) Ryan Aylward (EzRez, Hotwire) along with a few others who serve on the board who've spent a bit of time in travel: Rich Barton, Erik Blachford and Stephen Kaufer.

And what has Glassdoor, which garners its information from current and former employees, come up with? Might as well start with the OTAs since Glassdoor practically grew up in the OTA world:

The chart above details the approval ratings of the companies themselves and their CEOs as reported by the employees who came to Glassdoor and left feedback. (Hugh Jones isn't rated because of a limited number of responses - probably because he is still new in the role.) Looks like Hotwire is a pretty good place to work - we'll leave it to you to decide if that is because all of these guys left to start Glassdoor or not. (Just kidding, Ryan et al)

Glassdoor's info gets more interesting looking at hoteliers:
The highest rated CEO, Issy Sharp, has just announced that he is stepping down - a real shame according to this report. Bill Marriott and Hyatt's Hoplamazian are just a hair behind Sharp, however.

Not surprisingly, airlines show by far the greatest variability from one to another:

Things appear pretty bleak over at American and American Eagle - with labor strife a way of life at AA, clearly Something isn't Special in the Air. Even US Airways pulls better rankings. Southwest and JetBlue, as usual, prove that they are run more like hoteliers than airlines with ratings like these. (oh, they make money like hoteliers, too)

But the big takeaway? Continental and United - look a the difference in internal company ratings. Glassdoor doesn't have a rating for Jeff, but boy do they have one for Glenn. This is going to be one interesting merger, don't you think?

Chase Feels the Hyatt Touch: GoldPassport Gets a Co-Branded Credit Card

Hyatt and Chase today announced a new co-branded credit card which will allow members of Hyatt's Gold Passport loyalty program to earn points with every dollar spent. Hyatt has been the key holdout among the large chains in issuing a co-branded credit card - Starwood, Marriott, Hilon and IHG have issued similar cards for many years.

Many feel that Hyatt has held out on this potentially lucrative revenue stream (banks buy the points that they offer consumers based on spend) because of the relatively small size of the Hyatt chain (which limited points burning options) and a desire not to dilute the earnings of members who have earned their points by staying in hotels - Hyatt's main business.

However, with the continued growth of Hyatt into new segments and the recent IPO, that thinking has clearly evolved. Also of note is that the card is a Visa - Hyatt has long partnered with Mastercard on Gold Passport earnings promotions.

Expedia Billboard Effect: Cornell agrees that it is real

Expedia and other OTAs have long touted what has become known in the industry as "the billboard effect" whereby they have claimed that positioning on their sites generates not only bookings through the OTA but also a halo effect on the hotels' own sites by generating brand awareness. Non-loyal consumers start many of their searches at an OTA to gain a perspective on the options available, relative costs and positioning of the hotels in a given market against one another. Then, they often check other sites to compare pricing - usually including the website of the hotel they are interested in.

Personally, I saw strong evidence of the billboard effect while I was at Starwood and Expedia has long claimed that for every booking generated on Expedia, another booking is generated on the hotel's own website.

In a new whitepaper, Cornell assistant professor Chris Anderson has measured the billboard effect with a several branded and unbranded hotels. The results are striking, particularly for the independent hotel in the test.

For the study, Prof. Anderson worked with Expedia and JHM Hotels, an ownership group with hotels under the Starwood, Marriott, Hyatt and Hilton flags to cycle specific hotels on and off of Expedia over a three month period. That is, the hotel was listed at the top of the search results when the hotel was participating on Expedia and and removed altogether from search results listings when the hotel was dark on Expedia. By the conclusion of the study, each hotel was listed on Expedia for 40 days and dark for 40 days.

The results are below:

According to the study, the hotels saw a boost in reservations ranging from 7.5% to as much as 26% for the inde hotel when they were listed on Expedia vs. when they were dark.

Prof. Anderson suggests that the branded hotels may not have seen as large of a boost because when consumers go the brand websites they are presented with other "in-chain" hotels, e.g they are searching for a Marriott but upon arriving at marriott.com they are presented not only with the Marriott they saw on Expedia but also a Courtyard where they may actually end up booking.

We'd like to see an expanded test at some point with some slightly different parameters. For example, what happens if the hotel isn't listed at the top of the search results on Expedia? Could the brand numbers be further refined if the test was conducted in markets without sister hotels nearby? What would the results look like for resort hotels? How did the booking curves differ? And the cancellation rates? Could leveraging the billboard effect actually be cheaper than buying google key words? And of, course, what do the bottom line ROIs look like after all distribution costs are taken into account. Those questions may be ripe for another study - any of you OTAs or chains reading ready to sign up? Lets talk....

New Logo for Starwood Hotels and Resorts?

We've noticed a new Starwood Hotels and Resorts creeping into various uses. Just this morning, we saw an email from United cross promoting Starwood with a new logo in use. Yesterday, we caught site of this new logo in an industry magazine.

Here is the old logo:


And here is the new logo that we've noticed:
Certainly a lot cleaner and more modern design than the bold typeface in the prior design. And "Worldwide" is missing - a simplification for sure.

Interestingly, this logo is not featured on the Starwoodhotels.com website or the Starwood Preferred Guest (spg.com) website.

Will we see more of the Starwood brand now that there is a new logo? In the past, unlike the Hilton Family or the Marriott "umbrella brand," Starwood has been relatively quiet in using the overall brand outside of the travel trade and the loyalty program, SPG. Maybe now that Starwood has so many brands they are ready to make a broader push with the Starwood name?

Sunstone Hotels to Bank: Take this W and Shove it

Today's WSJ is reporting that Sunstone will simply turn over the W San Diego to the hotel's mortgage holder rather than continue paying the mortgage.

Sunstone, a REIT, owes $65M on the W which it purchased in 2007 for $96M. That translates to over $250,000 in debt per key for the 258 room hotel. Not surprisingly, Sunstone says the hotel is now worth less than the $65M mortgage so, like so many residential mortgage holders, they are simply walking away from the hotel and giving it back to the bank.

The WSJ reported that the hotel ran a 69% occupancy rate in 2008 and generated revenue per availiable room of ~$153 - not enough to cover the debt service.

The hotel has always been location challenged in that it is not within walking distance of the historic Gas Lamp Quarter where most of the restaurants and night life are in downtown San Diego. The opening of the 1190- room Hilton San Diego Bayfront has also not helped the W nor the overall San Diego market from a rate/occ perspective. In addition, Starwood added two hotels to its San Diego roster - The U.S. Grant Hotel (a Luxury Collection Hotel which has been recently renovated) and the Westin Gas Lamp Quater - a 450 room hotel. By adding additional assets that compete for the same pool of Starwood Preferred Guest members as well as groups and meetings, Starwood may have further compounded the W's troubles.

Of note, the management of the hotel as a W will probably not change anytime soon - management contracts usually live beyond ownership.

American's Complaint Against Imhof Joining Delta - Now Viewable Here

Here is the actual complaint American had lodged against Charles Imhof, former MD-Passenger Sales at AA.

While not nearly as soap-opera worthy as the Starwood/Hilton complaint but we really have to wonder about the basic judgement skills of a senior executive with AA. Sending highly confidential files clearly marked as such to a personal email address days before resigning to take a similar role at a chief competitor? Downloading sensitive documents onto a stick? Negotiating an employment agreement from his AA.com email address? ReAAlly?

Read the complaint and make your own decision.

Round I: Starwood vs. Hilton, Round II: AA vs. DL

Crains NY is reporting that American Airlines has filed a lawsuit against Chuck Imhof who recently left the top sales position at AA in New York for a similar role heading up Delta's sales efforts. The suit alleges that Mr. Imhof, prior to his resignation, emailed confidential strategy and pricing documents to a personal email account from his work account.

Sounds quite similar to the current saga unfolding between Starwood and Hilton where several senior executives departed Starwood for Hilton and, according to Starwood's complaint, decided to take more than a few confidential documents along to jump-start their future careers.

AA is sueing to prevent Imhof from working for Delta and is also suing him personally to claw back deferred compensation, performance bonuses and stock options as well as legal fees.

We are waiting for a copy of the actual complaint - we'll have more to share after we review.

Summertime and the Hotel Bonus Points/Offers Continue

If anyone thought things were getting better in the hotel industry, just take a look at the latest salvos the chain hotel loyalty programs are offering for stays this summer.

Starwood started the bonanza by offering 1 free night for every two stays until July 31st - a very rich offer - especially because the awards can be redeemed at some of Starwood's most exclusive hotels. Like all the chains, Starwood segments hotels into specific categories based on average room rate. Starwood starts at Category 1 (e.g. Four Points by Sheraton Saginaw) all the way up to a few uber-luxury hotels in Category 7 such as the W Resort Maldives. The free nights promo allows redemptions (with no blackout dates or capacity controls) as high as Category 6. The nights may be earned at any category of hotel. So, stay a couple of times at a Four Points and then you could redeem for a free night at the St. Regis Rome, the Westin Paris or the St Regis San Francisco. The only catch is that you can only redeem on Fri/Sat/Sun nights and you have to use them by the end of September.

Not to be outdone, Intercontinental Hotels has made a similar offer which offers a free night after two stays as well between now and July 3rd. However, IHG limits guests to earning four free nights (after eight stays) but they do allow redemption until December 26th. IHG allows redemption at all hotels worldwide (except a few in Japan) which makes this a great promotion as well.

Marriott jumped on board this morning with a similar stay and play offer which offers a free night after 3 stays between now and August 31st. The free nights can be used until the end of the year. Alas, Marriott is not allowing redemptions at their most elegant (and expensive!) hotels - only Categories 1-4 (out of a total of 8) are allowed for redemption. So, don't plan on earning your free nights in Cleveland and burning them in Paris.

Hilton has an offer of 1000 bonus HHonors points per night running until the end of June but we expect that they'll have something more exciting soon.

In the current environment, the chains are particularly concerned about losing even a tiny bit of revenue share from the road warriors who participate heavily in these loyalty programs. Hence, the chains are in a "me-too " battle - and the winners are clearly consumers who are still hitting the road.

"Rossgate" Continues - Federal Grand Jury Subpeonas Documents From Hilton

Today, a federal grand jury in New York requested documents from Hilton relating to the allegations that two former Starwood executives (Ross Klein and Amar Lalvani) improperly removed thousands of sensitive and confidential documents relating to Starwood's luxury brands. According to Starwood, these documents were used to enable Hilton to dramatically shorten the time required to bring Denizen to market. In addition, they contained valuable proprietary data about Starwood's development pipeline, developers etc

Hilton has "temporarily" suspended development of the Denizen brand and suspended both Ross and Amar on paid leave.

Oddly enough, however, Hilton has not suspended Ross and Amar from the Denizen website. They are still prominently featured as the brand leaders.














As an aside, we can't help but laugh at how similar Ross looks in this picture to former Starwood Hotels CEO Barry Sternlicht. Funnier still because Barry was the original brains behind the W brand long before Ross arrived on the scene.


This investigation will prove a huge distraction for both Hilton and Starwood over the coming months - how much time will both chains focus on these efforts vs. generating revenue in these trying times?

And how will this change Hilton's development pipeline? We can't imagine that many developers (what few that are in fact looking right now) will be looking to sign a deal with Denizen anytime soon - today's developments should open new opportunities for other, non-Hilton brands in the "lifestyle brand" category.

How far beyond Ross and Amar did the knowledge of these documents go within Hilton? That could be the difference between this affair bringing down just the two Denizens vs. something much broader.

Hilton to Launch Home2 Suites Extended Stay Product

Today Hilton announced a new brand, Home2 Suites by Hilton. You might think that its an odd time to launch a new brand in the beleaguered hospitality space but this brand may have staying power.

http://biz.yahoo.com/bw/090126/20090126005319.html?.v=1

Consider that Hilton claims to already have 10 franchise applications - most importantly with financing in place. If you are a developer looking for a brand to put on a new build - the power of Hilton global sales force, marketing programs and HHonors program is not to be dismissed. This is a huge advantage for Hilton.

Next, the brand itself is right for the times. In tough times, what sounds better than a "homey" suite to curl up in? The style is "hip and humble" according to Hilton - sounds like a significant upgrade to Hilton's current Homewood Suite offering which is plenty humble but certainly not hip.

Home2 has many similar design elements to Starwood's aloft product but will probably not have the jarring music as you walk in the door. It sounds more like a home than aloft's "everyone should check-in in a bar/nightclub" approach. Sounds good for the times.

But apart from more light and less music (we hope) many things are pretty similar between the brands. Consider:

• Similar number of keys (90-180 for aloft, 108 for Home2)
• Small real estate footprint required for construction
  
• Community lobby meant for gusts to "hang out" and work in (aloft's is more like a bar and Home2's feels more akin to a Starbucks)
  
• Free wireless throughout the hotel
• Small indoor pools, outdoor areas for socializing
• And of course, a green approach with things like bulk shower dispensers; dual-flush toilets; and recycled flooring

Granted, aloft's product isn't designed to be an extended stay product but the similarities are remarkable.

And at least Hilton will allow us to capitalize the first letter - home2 would have been painful.