REPORT FROM THE U.S.—When Room Key entered the pantheon of metasearch engines, initial reactions varied. While big chains were seemingly excited for this alternative to third-party search engines, independent hoteliers maintained a reserved skepticism, wondering what place, if any, there will be for them on the site.
These independent owners are taking a wait-and-see approach when it comes to Room Key’s potential influence on independents and hotel search-engine landscape.
That’s not to say Room Key, the joint venture among the industry’s biggest brands including Choice Hotels International; Hilton Worldwide; Hyatt Hotels Corporation; InterContinental Hotels Group; Marriott International; Wyndham Hotel Group; and Best Western International launched in January, isn’t planning on courting independent hotels for its site.
Room Key is talking to representation companies, including Utell Hotels & Resorts, Sabre, Synxis, and Leading Hotels of the World, Room Key’s CEO John Davis said.
“That’s how we’ll get the independents,” he said.
Within the next 90 days, Davis hopes to get independent hotel groups on board. “The benefit will be much lower costs. … they are on the wrong end of the stick. This will be significantly less for them,” he said.
Because it’s still in its infancy, Roomkey.com’s inventory needs to grow before some independent hotel owners will take notice, sources report.
Robert Cole, founder of RockCheetah, a travel industry marketing strategy and technology consultancy, and former director of hotel distribution with The Sabre Company, said Davis will need important global players such as Starwood Hotels & Resorts Worldwide, Accor and Carlson to sustain momentum to target more properties.
“The product portfolio needs to increase inventory outside North America, grow the number of luxury and boutique properties and attract large representation groups—sectors that are all currently under-represented when compared with (online travel agencies)” Cole said.
A wait-and-see approach
Most independent hoteliers find the prospect of Roomkey.com interesting, but are uncertain if it will have any effect on their own business models.
John Moser, chief brand and marketing officer for Denihan Hospitality Group, manager of Affinia Hotels, The Benjamin, The James and The Surrey, said it’s too early in the game to predict what will happen.
“It’s probably not as much of a threat to us as it is to third-party agencies,” he said.
In a statement, Mike Kistner, CEO, president and chairman of Pegasus Solutions, a company that provides transaction processing and electronic services to the hotel industry, said with a crowded marketplace, “Roomkey.com will give consumers—concerned only about the rates they pay—more options to find information while comparison shopping.”
“Comparative shopping for the best price and value is fundamental to consumers, who will often visit several metasearch sites, social media and the brand website before booking,” he said.
Adding independent hotels to Roomkey.com would make the site more comprehensive, said Jeff Low, founder and CEO of Stash Hotel Rewards, a hotel rewards program for independently-run hotels. “My view is I think everyone wants additional channels.”
Low said it’s a “wait-and-see approach beyond its initial release to see if it’ll get traction,” he said.
Low notes, however, that because Room Key is a venture with big chains, independent hoteliers might be suspicious to jump in with them.
“It’s sort of like Animal Farm … It’s a new system where all hotels are equal but some hotels are more equal than others,” he said.
Low believes that as Roomkey.com evolves so will the potential for independent hotels to join in. Because independent hotels are different, he said, a cookie-cutter platform will not present independent hoteliers ample ability to describe their hotels sufficiently.
Although customers are using the Internet to book and look, Moser said he’s sure in the not-so-distant future more search engines like Roomkey.com will enter the marketplace. But, for Moser, Roomkey.com isn’t the right fit for Denihan to place its hotels right now.
“We wouldn’t do well on a site like Room Key. If it was a site geared to boutique and independent properties, we’d be interested,” Moser said. “But it’s yet to be seen (what will happen) as it goes forward.”
Some are taking a more negative view. Bobbie Singh-Allen, executive VP and COO of the California Lodging Industry Association and executive director of the Independent Lodging Industry Association, is hesitant about Room Key.
“It seems like it’s the big boys wanting to get bigger,” she said, noting she feels as though Roomkey.com is blocking out independent hotels whereas OTAs such as Expedia and Orbitz support independent hotels on their respective sites.
The limited inventory on Roomkey.com makes Singh-Allen skeptical, as well, but also she questions independents’ future on the site. “I’d still question where they’d place (independents) in rankings on the page. Will they promote their name brands first and independents somewhere below? … I’d like to be optimistic, but we’ll hold off on official judgment and see how it works out,” she said.
“The appeal will be very limiting,” she continued. “ … Consumers like choice, not just lower rates.”
Singh-Allen said ILIA and CLIA are channeling their efforts to Global Hotel Exchange, an OTA offering cost-free distribution to hotels facing high commissions and fees. CLIA and ILIA added more than 1,000 hotels to GHX. The site plans to launch in March.
As for Roomkey.com, Singh-Allen reiterated her doubts over how independents will be placed on the site.
“From a practical perspective, if you’re Room Key and you’re one of the six (brands), I don’t see how you can advocate independents that aren’t part of the initial founding members,” she said. “I remain skeptical that independents have any place with Room Key.”