The New Year kicked off quickly with the buzz around Room Key. In case you haven’t heard here is the brief summary.
Roomkey.com is a joint venture created between Choice Hotels International, Hilton Worldwide, Hyatt Hotels Corporation, InterContinental Hotels Group, Marriott International, Wyndham Hotel Group and most recently Best Western. The product of this most recent instance of coopetition, Room Key is a Hotel Search Engine; defined in an article in WSJ as “an innovative new online hotel search engine that will provide the simplicity, transparency and breadth of choice consumers expect from a search engine, while delivering the flexibility, accuracy and assurance consumers expect from the hospitality industry.” John Davis a veteran of the hospitality technology and distribution is leading the site promoting that they will have as many as 80,000 worldwide including independent hotels.
I’ve had several questions this past week about Room Key including whether to participate; here’s my take on it for you to consider.
There were two previous initiatives attempted by a coalition of hotel companies of similar magnitude.
- 1988 – THISCO was founded by 16 hotels companies including Best Western, Choice, Forte, Hilton, Hilton International, HFS, Hyatt, Inter-Continental, Sheraton, La Quinta, Marriott, Promus, Utell & Westin to prevent the GDS from controlling hotel distribution. The THISCO switch evolved into what became the Pegasus switch; which interestingly enough under the same John Davis gained near monopolistic control of GDS distribution. See Davis’ article on THISCO at Hospitality Net titled “The Formation of THISCO“.
- 2002 – Hotel Distribution System was formed by Priceline. Hilton, Hyatt, Six Continents, Marriott and Starwood to prevent OTAs from controlling hotel distribution. Soon after HDS became Travelweb; it was then taken over by Priceline as their retail site. The site never gained tremendous market share.
- 2012 – Roomkey.com not to be mistaken by Vancouver based RSI International Systems’ Hospitality software was founded by Choice, Hilton, Hyatt, InterContinental, Marriott & Wyndham to combat search engines taking control of hotel distribution.
Do you see a trend…
The concept is a good one; driving consumer to a property or chain website to book at a lower commission is hard to argue.
Just don’t get caught up in the buzz. Yes it is formed by many of the big players; this doesn’t mean it will produce for you. Consider Room Key as another upstart distribution channel; measure it as such to determine if participation is warranted.
Here are the key factors to consider in your decision:
- Market Presence: in the case of a new site it is about the marketing plan; how will they drive traffic to the site?
- Site Display Criteria: assuming the traffic comes how is search display on the site determined?
- Commission/Margin: what is the cost to participate?
- Connectivity: how will inventory, rates and content be distributed; is is automated or yet another extranet?
- Site Functionality: will the site be compelling for consumers to use?
If the result of your questions indicates that it is not worth participating then walk away.
It is a new year and you have built in strategies and expectations into your plan for the year; you will have numerous new opportunities to evaluate this year. Explore them; most of all though FOCUS on your business.
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