Hotels must love and hate those online travel agents (OTAs) like Expedia, Hotwire, and Travelocity because on one hand, OTAs bring more business to hotels and on the other hand, hotels have to pay commissions to every reservation made through OTAs. For years, Hotels have been making efforts to improve their own websites so that they can compete with OTAs. Many hotels now guarantee customers that they offer the lowest price on the hotels’ own websites.
According to the PhoCusWright survey reported in The Wall Street Journal, reservations through OTAs contributed 45% of all online reservations, representing $15.2 billion of hotel sales, up from $12 billion in 2009. Certainly, it is the hotels’ best interest of skipping the “middlemen” or at least minimizing their commissions paid to OTAs.
As a result of the competition, Roomkey.com was born, which serves as a search engine and will direct customers to the hotel websites that invested in Roomkey.com. Now, Choice Hotels, Hilton, Hyatt, Intercontinental, Marriott, and Wyndham are onboard. Best Western also showed interest in this website. Starwood, however, prefers to “assess the potential benefits of this new distribution channel” before making a commitment.
In your opinions, how will OTAs respond to these hotel chains’ strategy of forming Roomkey.com? Will Roomkey.com change the competition landscape of online hotel reservations? Who will be the ultimate winner(s) of this battle? How can hotels and OTAs work together to create a win-win-win solution for everyone (the last “win” refers to customers)?