by Cheryl-Anne Sturken | May 01, 2004
In 2001, when hotels were faced with plummeting occupancy, they eagerly offered deeply discounted rates to online third parties such as Expedia and Travelocity to generate bookings. In the last 18 months, however, hotels have been busy reclaiming control of their inventory.
    “Hotels have learned the economics of online selling,” said Robert Mandelbaum, director of research and information services for Atlanta-based PKF Consulting. “The industry  is recovering, so they  don’t have to give up market position to a middleman.”
    Much money is at stake. According to Hendersonville, Tenn.-based Smith Travel Research, hotel sales at third- party sites topped $1 billion  in 2003 a sum chains could have pocketed themselves had those bookings been made at hotel-owned websites.
    “The world has changed,” said Tom Botts, vice president of distribution strategy and operations for Starwood Hotels. “It made sense from a cost and loyalty perspective to have the lowest rates on our branded websites. The results have been dramatic. I would say volume has doubled.”
    “We are driving customers to our own websites,” echoed Steve Armitage, senior vice president of sales for Hilton, where only 2 percent of online bookings now come through third-party sites.
    At InterContinental, which in May 2002 became the first chain to launch a best-rate guarantee program, sales at its websites have increased by 80 percent, according to Stevan Porter, president, the Americas, for the hotel company.
    For its part, Marriott International recently struck deals with firms such as Travelocity to ensure that rates match those on any of its branded websites (excepting Ritz-Carlton, Marriott’s luxury division). “We are selling the way the customer wants to buy,” said John Wolf, director of media affairs.