When hotel groups rewrite a story: RoomKey

We started the new year with a lot of news regarding the online travel world. Just by reading Tnooz, I can't keep up with the new stuff coming out of new ventures and also all these changes happening with OTAs.

One of the recent news was the announcement of a new collaborative online distribution channel called RoomKey. This new venture has been launched last week in beta with major hotel groups (Choice Hotels International, Hilton Worlwide, Hyatt, IHG, Wyndham Hotel Group and Marriott).

When I heard the news, I had to pinch myself because this reminded me of 2 past failed projects in the last decade: AndBook in 2000 and TravelWeb (owned by Priceline now) in 2002.

With RoomKey,these hotels groups aim to create a direct distribution channel that competes directly with traditional online travel agents (OTAs) such as Booking.com or Expedia. They are tired of loosing out margin by giving away commission to 3rd party players who spend a lot of money in search engines in order to feature their website higher than hotel chains websites.

By the way did you know that Priceline (including their sister companies Booking.com and Agoda) have spent $700M on online advertising in the first 9 months of 2011. Well, that's exactly where RoomKey might struggle to really compete with established OTAs. I don't believe this conglomerate has this sort of money to buy all the relevant key words in PayPerClick campaigns on Google, Bing and Yahoo.

Now, RoomKey might play the innovation route and think ahead of Google. Hotel Finder, here I come! Afterall, hotel groups have learned a long way since 1998 about what to do online to make their website an increasing profit center. But they also learned a lot about what not to do with OTAs (remember when hotel GMs were dumping rates on hotels.com after September 11).

In their current version, I am afraid I can't really see any major innovation in RoomKey. It is just a meta search engine with mainly American hotel groups providing their best rate availability. Once you pick the hotel you like, you are re-directed to the hotel group website in the right landing page. And that's it folks!

Really? Is that how hoteliers bring innovation online?

And don't even get me started with the introduction on their website.

"Want the real deal on hotel rooms? Well, look no further. Welcome to Room Key, the brainchild of hoteliers on a mission - to make hotel searches simple, fast and fun (not to mention, easy on the eyes). It's a tall order, but we wouldn't do it any other way."

1/ So hotel searches are already simple on major OTAs and hotel group websites. I just don't see how RoomKey makes it more simple.

2/ Fast? Well it took me 15 seconds to get the best rate available in London for 23 hotels whereas Booking.com gives me 1073 hotels availibility and prices in 4 seconds.

3/ Fun? Well there is nothing fun in that search engine, neither are the filters. Clearly the fun element part is clearly missing. Unless it is 2nd degree happiness. In that case, I am not there yet :-)

I am surprised that hotel groups haven't embraced reviews, professional recommendations on this project. This would have been fun!

More to come I am sure. And more to review on these columns for sure.

For now, RoomKey doesnt' quite cut the mustard for me. And you?

Check out Tom Costello excellent blog post about his take on the venture and of course Tnooz article with their 27 comments (and counting).

 

Comments

[Hotel Italia Goowai]

This is not easy, especially for hotel in Italia http://www.goowai.com

[www.facebook.com/profile.php?id=1411094854]

Hotels and hotel companies should embrace OTA’s and third party intermediaries. They do serve a customer that does not meet many requirements from hotels for corporate negotiated rates. Not seeing any compelling benefits that will shift an OTA buyer preference with the site. www.ourextendedstay.com

[Rosejanne Camoro]

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[D]

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[Bella Holmes]

Online innovation I think very important nowadays. There are many prospected clients you may get through using social media. If you have a business and a website it is easy to promote it using paid marketing or PPC of SEO or linking to other sites. This kind of strategy is very effective to be more visible in an online marketing.

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[Jonathan Akers]

I suppose if I was a hotel chain CEO I'd probably want to cut out the OTA middlemen too, but usually it is best to specialize in operating hotels and let the OTA's specialize in internet marketing.
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[Helen Louise]

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[BaymontBham]

Its sound interesting to me,We should give them ample time to patch things up maybe there are more to offers here than OTAs. Small Business Hotel will definitely benefited from this.

[Jonathan Akers]

I suppose if I was a major hotel chain president, I too would be tempted to cut out the middleman. It is best though to leave online marketing to the pro's who live and breathe that stuff.
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[ErDannyjoy]

I want to have experience of Roomkey definitely.
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[HotelRoomKing]

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[DavidMartin38]

This is little other than a co-op or pool system with very little benefit for the consumer but a cost saving exercise for the hotel companies involved. Every hotel no matter how big or small has to set aside a budget for booking commisions and unless you enjoy 100% occupancy (unheard of) the likes of hotels.com, expedia etc are a great way for hotel owners to secure bookings. Trimming the budget on this revenue streams seems very futile and for the likes of the Hilton Hotel Group and others in the Room Key portfolio. I think if these chains opt out of the likes of hotels.com, the consumer will not notice and their booking will diminish greatly.
Room Key the brainchild of someone that has too much time to think and little time to research.

[Hotelsaver]

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[Hotelsaver]

Yes OK, good idea, it is very difficult anyway for anyone else than Booking or Expedia. This market is so hard to get in. Small sites like us specializing on specific countries have a slim chance. www.hotelsaver-ireland.com

[Bubulina Dragutza]

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[TraveltoLondon_]

You must push your website for advertisement if you really want to compete like other company doing.
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[TraveltoLondon_]

If you are trying to compete with the online travel agents, i think you must exert much effort to advertise your new platfrom of doing travel business. Improper exposing your company in the online world the lesser the people know your product and last you will loose in your competion.

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[Jason Reese]

I wish I could have been in the initial meeting where someone really had to pitch this idea and everyone else agreed. It is truly a site that wastes space (virtually, but still). When will the hoteliers get it through their heads that they need to focus on what's going on in their customers' heads in order to increase sales? With a few exceptions like the Kimpton Hotel Group here in the US, hotel websites are setup as if every customer was simply looking for a place to sleep. The fact is, many customers view their hotel stays as a point of interest. Hotel websites need to be inspirational (as well as informational). The industry in general is sadly utilitarian focused.

[EuanMitchell]

Really cannot believe that these big hotel groups are trying to challenge the OTA's and google with such a poor solution. As the article correctly mentions, it has all the hallmarks of another andbook or travelweb. Nothing new or innovative here.
Will all these big brands really invest much of their precious digital advertising spend on a combined website? I really can't see it.
If they were to make it more social and add genuine, unbiased reviews only from people who have stayed at the hotel and booked as a result of coming through this affiliate channel, then it would have some stickiness. The reviews could not be moderated by the hotel companies, so would need to show negative as well as positive... Then this channel could also challenge the big mama of review sites tripadvisor.
Without something new and different, I don't see it making a big impact on the hotel distribution landscape. Roomkey also needs to get other non-us centric hotel groups onboard. Not so much in Europe but Middle east and Asia are developing and growing fast. The online world has also moved on from just English. Look at the number of languages on the OTA websites and compare that with the majority of hotel brand sites. This is where all hotels are falling behind and needs addressing if the balance is to shift.

[Susan Deluzain Barry]

I am so glad to hear something besides the fawning and excitement that most outlets have done around RoomKey! I agree - too little, too late, and too boring! Hotels need to reimagine distribution, not just copycat OTAs.