Guestmob: A New Level of Stupidity for Hoteliers?

This morning, we saw a FB posting from a good friend about a new website, Guestmob.com. Guestmob claims to offer prices "20-50%" lower than Kayak by pitting hotels "against each other for the right to fill empty hotel rooms"

Consumers enter the site and pick a destination and dates par usual, and then offered a selection of hotels grouped by star quality and neighborhood. Sound familiar to Hotwire or Priceline? Yes, except the hotel name and brands are exposed. As are the retail prices for these hotels.

Next, a consumer selects the area and star level they want to stay in and is taken to a confirmation page showing the selection of hotels that Guestmob will later solicit (like a mini RFP) for the consumer's stay:

3 days before arrival, Guestmob lets the consumer know which hotel has "decided" to let them stay.

Hoteliers: downward rate spiral, anyone? Haven't we seen this movie?

Lets dive a little deeper, however...

First, we doubt that all of these hotels are actually participating in this platform. We kinda doubt that the distribution hawks over at Marriott have embraced a less opaque version of Priceline when they don't even participate in Hotwire. As for the other brands listed throughout the site, good for Guestmob if they have really signed up these chains but we think they are probably shills.

Second, Guestmob is listing competing OTAs and their "pricing." We imagine that the OTAs will probably find this rather distasteful for obvious reasons.

Finally, for hotels that actually are participating in Guestmob, I ask one question: WHAT ARE YOU THINKING?

Hotels have been complaining for years about OTA margins and the lack of consumer brand loyalty. Opaque sales are an important revenue management tool but no one in the industry is particularly excited about growing the segment.

And yet, we still have hoteliers who apparently are seemingly not bothered by ANY of these issues and are willing to give street cred to what may be a very destructive model. Wow.

Priceline: "Name Your Own Price" Takes a Vacation

This morning Priceline announced a major change to their vaunted Name Your Own Price Model that has been the basis of their opaque hotel product since inception. Billed as a "limited time offer" until the end of March, Priceline is actually showing winning bids and allowing consumers to simply tag-along and buy the same thing, assuming availability still exists. No bidding, no guessing - just a posted price. Its not perfect because Priceline may not have availability for the dates you are checking (vs. what the last consumer bought.)

Yes, you read that right, a posted price. In the example below, Priceline is offering a 4 Star hotel room in Boston without any bidding. Not so much "Negotiation" here - just "Big Deals"

Scrolling down, a user can simply enter their credit card details and buy - on the same page. No bidding, no guessing. Again, the bid may not be accepted so it isnt fool-proof.

Priceline is pitching this as a limited time offer - but we've seen this movie before. Remember the first OTA to cut fees? Yep, that was Priceline and that was a "limited time" offer as well.

It would appear this business model simplification is a direct swipe at opaque competitor Hotwire.com (full disclosure: I formerly worked there) which has always used a similar no-bidding model.

And this will also take some of the gas out of "cheater" websites like www.biddingfortravel.com which have long suggested bidding price points for use on Priceline.com. Of course, biddingfortravel.com also posted which hotels actually fulfilled the bids - and nothing is changing regarding opacity during the booking process.

We'll see where this goes, but we doubt this is any more "temporary" than booking fee rollbacks were over a year ago.

Travelocity goes Hotwire! New Opaque Product Launched

We are not quite sure how we missed this one, but Travelocity has launched a new opaque product (a la Hotwire or Priceline's name your own price model) within their current hotel product.

There does not seem to have been any fanfare associated with this launch - nary even a press release but then again, Travelocity may have been a little occupied with the ongoing booking fee battles to focus on this product launch.

The product is the same in name and offering as those offered on Travelocity's sister site in Europe, Lastminute.com

Consumers click on the link above (which could use some work, by the way - what is that hanging edge of the "top secret" logo on the far right?) and are directed to the page shown below.

Not unlike Hotwire, star ratings, amenities and a fixed (rather than name-your-own as at Priceline) price is shown. Traveler reviews are masked as well as any other descriptive data that would enable a potential customer to identify the hotel.

Unlike Hotwire and Priceline, however, the location of your mystery hotel (often the most important part of buying a hotel!) is somewhat hard to identify, to the point of silliness. The hotels above were listed as being in "Chicago" rather than a specific area or neighborhood of Chicago. This makes it pretty tough for consumers to make an intelligent choice - who wants to end up at O'Hare if you have a meeting downtown? Compare Travelocity's map with Hotwire's:



























And then there is the supply issue. Things are early for Travelocity - we had a choice of 3 hotels vs. Hotwire's 34. Because of Priceline's opacity, it is impossible to know how many hotels Priceline has but, based on our experience, it is usually at least as many as Hotwire.

That said, assuming the suppliers can live with it, more choice is always good for consumers and we expect, particularly in these times, that Travelocity will be able to rapidly add more inventory - again, assuming hoteliers buy into the product.