Room Key: Open to all, will lower hotel distribution costs, features and marketing to come

More details emerging about Room Key, the global hotel search platform created by six of the biggest accommodation super-brands in the world.

CEO of the business and ex-Pegasus founder John Davis has high hopes for Room Key, not least because it has been 18 months in the making after a number (names not disclosed) of the six founding partners came together to work out how to tackle the problem of growing distribution costs and a desire to capture more direct bookings.

From a corporate perspective, the six companies – Choice Hotels InternationalHilton WorldwideHyatt HotelsInterContinental HotelsMarriott International and Wyndham Hotel Group – wholly own the joint venture, Davis says, although a exact breakdown of the stakes in the business has not been disclosed.

At launch today (Davis stresses it is a “beta” product at present) there are 23,00o properties listed on the system, with designs on having close to 80,000 worldwide by the middle of 2012.

Davis estimates the total number (“cap-out”) of hotels on the system will eventually be around the 120,000 mark.

The 23,000 figure will jump within the next week, Davis says, as another major hotel chain is joining the platform, though not as a founding partner.

Similar to the launch of Google Flight Search in September 2011, online travel agencies are currently not participating in the platform.

Industry analysts such as Henry Harteveldt of the Atmosphere Research Group suggest this is a “shot across the bows” of OTAs, but Davis says the door is open for them to participate, adding: “We will do whatever is necessary to get the right coverage on the site.”

Unlike the Travelweb multi-chain effort of the early-2000s, which featured Pegasus as a provider of accommodation, no GDS or other switch will be participating in Room Key, Davis confirms.

So what is the motivation behind Room Key, and why now?

Davis says chains have become increasingly wary of rising distribution costs for some time, while hotels increasingly want to “own the booking”, giving them a chance to up-sell ancillaries to travellers and allow guests to manage their bookings in a better way.

From a distribution perspective, Room Key will have lower “commission” or referral fees than other platforms, Davis claims, plus as the site is purely a metasearch service the hotel will continue to secure the booking and handle so-called guest management.

The shadowy figure of Google and its growing Hotel Finder service does appear to be lurking in the background, at least in terms of the timing of Room Key’s launch, although the idea for the site clearly came about before Google muscled in on the game.

Davis will not discuss where he thinks (and hopes) hotels will divert their existing distribution costs from in order to feature on Room Key, but Google is clearly one brand in his sights, as well as other metasearch players (Kayak’s Steve Hafner wrote “Travelweb part deux, congrats JD” on a TechCrunch article about Room Key) and the OTAs.

The challenge will presumably come when persuading OTAs that it might be a good idea to feature on Room Key, but at the same as potentially losing out on their home turf.

At this stage it appears chains are micro-managing whether all their properties are included or not, whether some are exempt, etc.

Davis says some of the chains have an opt-in system for franchises, while others have automatically include franchise properties and they will have to opt-out. Some may not have a choice, he admits.

The site is only at stage one, Davis concedes, with property reviews coming “very soon” at the conclusion of discussions with “major players in the review space”, as well as a plan at some point to include reviews from its own users.

The current process of allowing users only to search by city and date will also evolve, he says, with options to find properties based on hotel name and chain to follow.

But with any new consumer-facing brand comes the age-old problem of gaining exposure and growth.

Davis says a full-scale, multi-national marketing campaign will begin in March 2012 to attract visitors, with a number of “creative ways” of getting exposure.

More importantly, perhaps, will be the support which Davis says the chains (“birth parents”) themselves will be giving by alerting new and existing customers to the fact that the Room Key service exists.

Meanwhile, the Hotelicopter team, which is was quietly acquired by Room Key in June last year for an undisclosed fee, makes up a large part of the 22-strong number of staff.

Its CEO Adam Healey will head a Room Key Solutions division, maintaining the existing white label partnerships Hotelicopter has with tourism boards and DMOs while developing other partnerships, Davis says.

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.

 

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  1. Amy

    Hmmm. Well i decided to test them out against prices that we have on our own booking website. I picked at random ‘The Trafalgar Hotel’ in London, England for 6-7th of March – Room Key price £263 down to £228. Price on my own booking site for same hotel, same dates, £228 as standard. Not sure what the benefit is for the consumer? As others have said an attempt by the big chains to get some attention lol. I don’t believe OTA’s have much to worry about just yet…

     
  2. Jason

    Great to see systems like this in place, but who will use it and will the cost be passed onto the end user.

     
  3. Avital

    Looks like a fantastic opportunity to hotels, finally a great oportunity to own back hotels booking, and reduce distribution costs.
    What are the down sides of that?

     
  4. NQ

    honestly, I can find better prices at the same hotels on my own… :-/

     
    • Phil Butler

      With u on that NQ. My method, Google destination, switch to maps, look at hotels where I wanna stay, bingo! An early form of Google Hotel Finder. 🙂

      Roomkey? What’s the value now? Go to Expedia and book the flight and the room maybe? Just thoughts.

      Always,
      Phil

       
  5. Hotel websites stealing room night share — from chain toll-free numbers | China Hotel E-Marketing Strategies

    […] all of the chatter about the Room Key collaboration, the websites of major hotel chains in North America are indeed asserting control and stealing […]

     
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    […] Room Key | Vía: Tnooz Sigue las noticias por twitter.com/wwwhatsnew, Facebook.com/wwwhatsnew o Google […]

     
  7. Tom Costello

    I took the liberty to break down Room Key in this post for your review http://bit.ly/ysu3y3

     
  8. Is the Roomkey Cartel Protecting Their Phoney Baloney Jobs?

    […] leeway in taking commissions, hotels nor guests can long afford such extravagance. I can hear an audible stoccatto of news keyboards and executive phone pads tapping can be heard worldwide too. The buzz over […]

     
  9. Dennis Burkholder

    I agree with Dennis Schaal’s comment but also wonder about the name infringing on RSI’s existing RoomKey hotel software: http://www.welcometorsi.com/

     
  10. Phil Butler

    Fascinating. As always, questions arise. “Open to all” or “capped at 120,000?” The initiative looks to me like a movement for the 1% and not one for the 99% of hoteliers out there struggling with rooms just as nice as the big boys.

    Nice advanced publicity for GHX though 🙂 Roomkey looks more like a sharp poke with a stick in the eyes of the big OTAs. But then, effective at driving costs down to consumers – maybe.

    Nice piece Kevin. Interesting times.

    Always,
    Phil

     
  11. Fred

    Just a quick point of clarification about Travelweb. There was no inventory from Amadeus. It was 100% Pegasus. The sell price mentioned yesterday was also incorrect. Good luck John and team.

     
    • Kevin May

      Kevin May

      @fred – price was taken from PCLN release about the acquisition.

       
      • Fred

        Interesting. You should definitely change Amadeus to Pegasus however as that is definitely not correct. Thanks Kevin.

         
        • Kevin May

          Kevin May

          @fred – happy to correct that element, cheers.

           
  12. Room Key – sencillo y elegante metabuscador de hoteles | WebStory

    […] Room Key | Vía: Tnooz Sigue las noticias por twitter.com/wwwhatsnew, Facebook.com/wwwhatsnew o Google […]

     
  13. Traveler of time and space

    Blah blah blah, travelweb, travelweb, travelweb

     
  14. Tom Costello

    Bryant,

    With commissions on the rise and other distribution costs that are attributed to an indirect distribution channel conversion (Expedia, Travelocity, etc.) why in the world wouldn’t these brands band together and create their own direct connect platform? The real question here is why in the hell did it take them so long??? http://bit.ly/wzkJfE

    Now brands have to figure out how to create their own guest review systems to be positioned on their sites instead of handing off prospective customers to TripAdvisor. Is this laziness or sheer stupidity in the name of social media??? http://bit.ly/A9QOkZ

     
    • Bryant Garvin

      Tom I totally agree this is something that probably should have been done long ago… but the industry being what it is, in a way it is amazing they were all able to finally come to an agreement on something.

      As far as reviews go. I know most Hoteliers are very very anti reviews on their sites. Part of it is laziness but honestly most of it goes back to the actual franchisees not the franchisers and their complaints which could arise about “bad reviews” showing on the O&O sites. When most Hotel Sites are not up to par even with the OTAs’ sites trying to add the review complexity to it just throws a whole new wrench into the system.

       
  15. Bryant Garvin

    I actually had given my two cents as well about this All though people can say this is NOT directly related to the OTAs there is no doubt that they are the primary “rising costs” spoken of in the article above. For this reason I REALLY doubt that the OTAs will ever participate even if they “wanted” to at some point. This is the Hotel Suppliers trying to exert a little more control just like the Media Companies did when they made Hulu. see: http://lifebeatsfiction.wordpress.com/2012/01/11/room-key-two-word-that-will-either-change-an-industry-or-go-down-in-infamy/

     
  16. Room Key – sencillo y elegante metabuscador de hoteles | Que hay de nuevo mundo?

    […] Room Key | Vía: Tnooz Sigue las noticias por twitter.com/wwwhatsnew, Facebook.com/wwwhatsnew o Google […]

     
  17. Dennis Schaal

    Dennis Schaal

    Not a very visionary name for a site given that most hotel rooms don’t require “room keys” anymore:)

     
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    […] Room Key | Vía: Tnooz Sigue las noticias por twitter.com/wwwhatsnew, Facebook.com/wwwhatsnew o Google […]

     
  19. Tom Costello

    Now I see why Hilton and Choice were aggressively picking my brain about Hotelmine.

     
  20. Nadav Gur

    Any mentions of an API-based affiliate program, taking people away from EAN, CWT, Orbitz Private Label etc.?

     
 
 

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