Hotels Reclaim Online Turf
Chains move to offer best rates on their own websites
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.