With the prevalence of mobile devices and the emergence of tonight-only mobile hotel apps from Hotel Tonight, Priceline and others to follow, hotels and intermediaries increasingly will have to deal with the dynamics and challenges of “mobile exclusive rates.”
Rate integrity means different things to different people, but what happens when “mobile exclusive rates” aren’t so exclusive, or at least they don’t take on the appearance of exclusivity?
For example, take a look at this “mobile exclusive” $55 rate found on the Hotels.com website Sept. 27 for a stay at the Hotel VQ in Denver that night.
A true “mobile exclusive” loses its exclusivity if it shows up online on a hotel-booking website.
Kayak.com was showing the Hotel VQ’s “mobile exclusives” a few days earlier, as well.
Hotels.com had a “mobile exclusive” for at least one other property, The Burnsley All-Suite Hotel in Denver, the other day.
For the record, Hotels.com says the “mobile exclusives” it showed online for the two properties actually were legitimate last-minute rates, although they were somehow mislabeled as mobile exclusives.
“The rates you saw were valid,” says Katie Deines Fourcin, a spokeswoman for Hotels.com’s parent, Expedia Inc. Â ”Hotels have the ability to load multiple rate types into our system and set parameters on specific promotional messages, such as making a certain rate available only to mobile customers.
“In this case, the offers started out as mobile-only deals, and then the properties decided to offer those rates as last minute deals on all points of sale,” Deines Fourcin adds. Â ”They just forgot to change the promotional tag to ‘last minute deal’ instead of ‘mobile exclusive.’”
An official at Hotel VQ was unsure about whether that was indeed what happened, and was looking into it.
“The error was probably from the property level feed,” a Kayak sp0kesman says, referring to the hotel’s display on Kayak and adding, “Does anyone out there think mobile exclusives are a good idea?”
One person who does is Sam Shank, who founded Hotel Tonight, an app-only booking site which deals in mobile-exclusive rates.
The Hotel VQ spokesman says the property had a mobile exclusive deal with Hotel Tonight.
About Priceline’s new Tonight-Only Deals, spokesman Brian Ek says what is billed as exclusive inventory “means these are specially discounted rates that we don’t believe you will find on any other third-party site.”
As with Hotel Tonight, Priceline’s Tonight-Only Deals don’t guarantee a room type.
Priceline’s iPhone Negotiator app today was showing a $188 rate for the Back Bay Hotel in Boston on a tonight-only basis. The hotel’s own website showed the cheapest room, a Superior Room with two double beds or one queen bed, for $289.
Hotel revenue managers will increasingly have to grapple with the mobile channel and policing its rates as mobile hotel distribution gains traction.
Shank argues that “desktop brands,” meaning online travel agencies and other intermediaries which primarily operate online, aren’t particularly adept at mobile.
“They have challenges when they try to go mobile,” Shank contends.
One could probably debate if that is indeed the case.
Meanwhile, mobile exclusive deals will also increasingly become an issues for global distribution systems, which will have to try even harder to chase after their elusive goals of “full content.”
The issue of Rate Integrity has bitten a lot of people. Cross channel rate differentiation is to be expected – heck is very desirable. The problem is that there is so little trust in any of these rate stories – that from the outset a seller (intermediary or direct) needs to clearly make the statement about what an exclusive rate or guaranteed rate means.
The travel industry is notorious for sugar coating and misrepresenting things. Structurally we have some issues where rate setting is delegated to different parties resulting in multiple “correct” rates.
There is a huge need to be able to say truthfully that rates are “Lowest” rather than the obfuscation “No lower rates”
The rate guarantees offered by the hotels and airlines have been extraordinarily weak. IHG recently upgraded its hotel rates. It doesn’t discriminate against Mobile rates specifically – but one could easily see that booking say 36 hours out and then seeing a lower rate via one of these channels could be a problem. One could argue that Mobile rates don’t count. That’s an interpretation.
http://www.ichotelsgroup.com/h/d/6c/1/en/c/2/content/dec/cn/0/en/rd/rate/lowguar.html#competing
Further as another example – Marriotts “Look no further Guarantee” would actually work against you in this situation. Why? Because you need to read the fine print:
“If in the next 24 hours you find a lower rate for the same hotel, room type and reservation dates, submit a claim form. You may search anywhere for lower hotel rates, but your claim form must be submitted at least 24 hours before your scheduled arrival date.”
OOPS – that means that IHG could repudiate the lower rate as an exception because its not “an internet” rate. Additionally Marriott can release as many last minute rates as it likes and too bad if you bought the rate the day before thinking you were protected. And I am not picking on IHG or Marriott – just trying to illustrate the issues of these forms of rates vs the rate integrity issue.
Still lot to do in communicating with the consumers.
Cheers