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Will Roomkey.com Become a Game-Changing Site for Online Hotel Reservations?

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)?

Relevant discussions:
References:
Berzon, Alexandra (2012, January 12). Hotel ally on booking site. The Wall Street Journal, p. B2. Also available online
The picture was downloaded from roomkey.com.

Comments

  1. Nice blog! I love this hostel very much. I will definitely visit and stay to that place.

    Pousada Do Rio Quente

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  2. I personally think, at least for now, the OTA's have nothing to worry about, i haven't seen any advertisement for this website and therefore wouldn't know it even existed. I think overall if it is a smart costumer they should cover all the bases, see if using a OTA is cheaper or using roomkey.com or even going straight to the specific hotels website. Since OTA's bring the promise low prices and have many websites that people can use i think until roomkey.com becomes a bigger project it will have a little bit of a tough time getting the same business as its competitors. To create that win-win-win association i think they all need to work together, try to create a site where the hotel themselves aren't losing as much money by having to go through the middle man, however like you mentioned hotel sales are up, so by increasing prices through the OTA websites may not be the best idea just to give more money to the actual hotel. I understand that making money is top priority because to keep your customer coming back you need to have good accommodations and services. It is a difficult situation to go through because one way or another i don't find it possible to have a win-win-win situation, but more of win and a "do-able" situation. It's a partnership that they will really need to go through some intensive negotiations first.

    -Samantha Dana

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  3. I think Roomkey.com is a very good idea but it still has a long ways to go. I don't think it will have a huge effect on the competition between OTA's. In order to compete with the prices, either the hotels themselves should over some sort of reward (maybe a free breakfast), or discount for booking a room directly on the hotels website. The search engine is a great idea for the hotels themselves, so that the costumer is lead directly to the hotel's website but it does not really bring anything extra special that would make a costumer choose that over an OTA. In order to create a win-win situation I think the search engine should offer some deals from the OTA's. Or maybe have the OTA's website in the search engine so that way the consumer can choose which route they want to go to book their room, it would create a more fair situation for the hotel's websites to be right up next to the OTA's because I feel like some people forget that you can even make a reservation through a hotel's website, they just go to an OTA because it offers the best variety.

    - Jamie Rieff

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