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?

Internet Access at 4/5 Star Hotels: Getting Closer to Free (Finally)

For a long time, the hospitality industry has managed to convince business travelers that they should pay extra for high speed internet access (or HSIA in industry parlance) in four and five star hotels even though the same companies offer it for free in their lower tier brands.

Four Points, Courtyard, Fairfield, Hyatt Place, Holiday Inn as well as newer brands such as Aloft and Indigo have all offered free HSIA to all guests for some time. However, their higher tier cousins such as Westin, Sheraton, Hyatt, Marriott and Intercontinental have long charged at least $9.95 (per day!) or more for the service.

Why?

Well, because they can. With a majority of their travelers staying on business where someone else is picking up the tab, upper-tier hotels have been able to get away with this. In contrast to the value oriented chains where the target is more leisure and small business clients (who may be paying the fees themselves) the big guys are targeting large corporate and group customers.

But holes are appearing in the "everyone pays for HSIA mantra"

During the peak of the lodging boom 2-3 years ago when hotels commanded pricing power, the upper-tier chains largely refused to negotiate on HSIA access charges for large corporate buyers. It was a sacrosanct rule at many chains to refuse to give it away as part of a negotiation.

Oh how the world has changed. Recent discussions with several of the largest corporate travel buyers have shown that free HSIA is now a very common component of rate negotiations. A quick check of many large corporate rates at several metro 4/5 star hotels yields similar results.

Don't work for a major corporation but have hotel loyalty program status? Free HSIA may be in store for you as well.

Hyatt started the trend last year when they began offering free HSIA to their top-tier (Diamond level) Gold Passport members globally.

Starwood fell into line beginning March 1st for Platinum members, again on a global basis.

And today, Marriott announced a similar program for not just top-tier members, but mid-tier members as well. Marriott, while covering more members, covers significantly fewer hotels however. Marriott's offering does not include hotels outside of the U.S. and Canada or even Marriotts located in Hawaii. (Maybe Marriott is trying to tell us something when we are on vacation?)

So, will HSIA revenues at upper-tier hotels go the way of phone revenues (picked up the phone in your room recently?) Between the growth of wireless cards and relentless competitive pressure, we think this revenue stream is toast. Even when lodging comes back in 2011, we doubt any of the chains will be able to convince customers that they should start paying for HSIA again. And by then, we may not be traveling with laptops anyway.....

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....

Marriott Offers Double Credit Towards Elite Status

As we predicted a few weeks ago, this is going to be the summer of mega-bonus promotions from your favorite hotel loyalty programs as the major chains battle to preserve share among an ever shrinking pool of business travelers.

Today, Marriott announced their newest promotion which gives Marriott Rewards members double credits towards elite status from now until June 26th. Similar to many promotions currently running by all the major airlines, the promotion enables members to earn elite status twice as fast as usual.

Elite status gives a number of nice benefits when staying at Marriott brands including bonus points, an elite reservation line, priority late checkout, ultimate reservation guarantees etc.

If you are a business traveler that is still traveling, we suggest picking a chain and raking in the bonus points, elite status bumps - get while the getting is good! It will make for a great rest of the year and into next when you are enjoying a nice upgraded room or a free weekend somewhere nice!

Marriott Rewards' new offer is great for consumers but shows how hard things have become in the resort market

Marriott's frequent stayer program, Marriott Rewards, just announced a stunning new offer whereby guests redeeming points for free nights at a slug of lavish Marriott resorts can get an additional free night without redeeming additional points. Members can burn the regular amount of points for a two night stay and take home a third night free. And this isn't being offered only on Sunday nights or at the Milwaukee Airport Marriott in January (no offense to Milwaukee) - its being offered all summer long at great hotels in Hawaii, Mexico, Costa Rica, Portugal and the UK among others.

Clearly, Marriott is having a hard time filling these resorts with typical summer leisure travelers. Group and meeting demand has also fallen precipitously at luxury resorts in particular - no company wants to be the next AIG hosting fancy getaways at fancy resorts. As such, Marriott is turning to their most valuable customers and offering them an additional incentive to come and stay at a Marriott.

For Marriott, this promotion enables them to reduce their Marriott Rewards points liability and stimulate some demand into these hotels - even guests staying for free still generally spend money on food and other hotel services (In fact, some studies have shown that guests staying on loyalty point rewards actually spend considerably more than guests who are paying for their rooms)

For travelers, as we've said before, this is yet another great reason to be burning hotel points and airline miles now - because you can! Demand is down and airlines and hotels are opening up frequent flyer/stayer award space. Don't look for seats on the Saturday before Christmas to Aruba but for less peak than peak of peak times, frequent flyer seats and rooms abound.