Is Room Key the Game Changer We’ve Been Waiting For?
January 2012 has already been marked by the launch of what has been touted as the panacea for our industry – a rebuttal to the online travel agency onslaught that has so dramatically shifted the hospitality power structure. I am referring of course to Room Key, the new (supposed) OTA managed by the hotels. My initial thoughts on www.roomkey.com (still considered and marketed as a 'beta' site) are that it's a very good try, but not enough to get a consumer to switch away from their current favorites.
First, for those who don't know, or who haven't yet taken the time to analyze Room Key, I encourage you to spend a few minutes touring this new website. Launched by a consortium of six major hotel chains including Choice, Hilton, Hyatt, Intercontinental, Wyndham and Marriott, the site allows visitors to search by destination to easily find a given property. (Note the current beta version is for the US only, with other English speaking countries to follow shortly.) Once a location and property is selected, the site refers a visitor directly to the selected hotel's official website. This transfer is seamless to the user, and low and behold, reservations are made directly with the property, thus avoiding the significant commissions that the OTAs proscribe.
Room Key's aesthetics are sophisticated, clean and quite welcoming. The performance of the site is also exemplary. Try as I might, it completed searches quickly and flawlessly, delivering accurate results, even in locations that I thought were obscure. Immediate results allow you to search by star rating or price. Links to Google Maps in the same interface allow for easy understanding of micro-location details. A terrific feature allows for instant email to a user's traveling companions of details on a prospective property.
Of course, not all hotel properties are participating at this stage. However, it's clear that the functionality of Room Key was not just tacked together at the last moment. It's perhaps the best interface for querying hotel properties that exists today. But the question remains, why would a consumer go to this website in lieu of their current favorite OTA? Frankly, at least at this stage, there is no reason to do so. Here's why:
1. Room Key is all about hotels and does not complete the journey. Airlines? Car Rentals? Attractions? Restaurants? Stores? Sorry, but Room Key is about accommodations only. The OTAs cover the entire trip and that is a significant consumer advantage. Most travel planning starts not just with the hotel, but with physical movement component, whether it be plane, train or automobile. Unless you're driving your own car or are privy to preordained business arrangements, you're likely to first search by airline for available dates, and then browse accommodations that fit. Why? It's usually the airline that has the least price flexibility, and so the leisure traveler first books the flight, then the hotel room, and lastly the car rental, dinner reservations or events. Does anyone expect a consumer to book their airline ticket through one of the other OTAs then mosey on over to Room Key for their hotel room booking (let alone go to a third site for their car rental)?
2. Room Key lacks completeness. With inventory limited to the participating hotel chains, Room Key is highly exclusionary in its present form. In many places, the smaller chains, independents and non-participants provide useful accommodation alternates. Without them involved, Room Key is only a partial search tool. Now, maybe the plan is to add more hotels once it is out of beta, but until then, the website remains as only a consolidator of the six participating chain. The OTAs have almost a decade of property input to leverage. And going beyond hotels, the OTAs offer a complete travel experience, with widgets that include everything from weather to travel advisories, from packing tips to essential travel tools.
3. The OTAs have gone beyond the basics to include promotions, last minute offers and package deals. In contrast, Room Key's approach is straight up, no-nonsense, and just the rooms. For business, this is spot on. Business customers want a room, with location as the key decision factor. Leisure consumers, however, have a wider degree of flexibility. They are much more prone to be influenced by a shiny deal or package. Room Key does not offer any promotional activity, except for those that might be 'buried' within the participants' linked websites.
4. Room Key has a major user convenience issue. Inherent in the design of Room Key, the interface efficiently pushes the user to the individual property website for each booking. In doing so, there's no thorough storage of customer profiles, as this data resides with the booking property. While this is terrific for the hotel, it's counterintuitive for the user. Each time a booking is made, the consumer has to reenter all of his or her information, creating a new profile with each of the chains. If users were interested in only one hotel chain, they would already booking with that company directly.
5. Room Key is cold and lacks a 'warm and friendly' consumer interface. While its true this is still a beta launch, the site has no substantial method for the user to fluidly interact. Even if you burrow down to the 'About Us' page, you'll see three fun postcard images and roll over bios of the three founders of Room Key. But there's no way to email them; no phone number; not even a contact address. Of note, there is an email form and an FAQ section. Perhaps the 'live' site will be more consumer-friendly. Let's hope so!
6. What logic is there for the hotel chains to promote Room Key? I'm still scratching my head on this one. If I were the CEO of a hotel chain, I wouldn't see the logic of putting funds into promoting or advertising Room Key, not unless all partners were equal financial contributors. That might indeed build a sizeable war chest. But for what purpose? It still doesn't help the one critical factor that the major hotels are facing – lack of brand awareness. Creating Room Key as yet an additional brand to support and promote only serves to further dilute and complicate the branding challenges already being faced by the majors.
7. The OTAs have a massive head start. Is this a case of too little, too late? Perhaps. Look at the total dollar spend by the OTAs over the past five years. Look at the Alexa traffic ratings and you'll see a very tall mountain for the hotels to climb. In social media, which Room Key doesn't yet to have a very active presence on, the OTAs are well ahead with tens of thousands of Facebook fans and Twitter followers. I'm afraid that Room Key does not have the 'legs' to help customers make the switch. It will take some very serious monetary efforts to bring Room Key up to a standard that the OTAs have developed organically over the past decade. Plus, one of the most important features of the OTAs is each hotel's inherent credibility through its numerous critiques. Room Key will have to do some sizeable front-end promotions to get travelers to kick-start the review process.
The Bottom Line
I would like Room Key to succeed. But unless it adds a lot more functionality, I'm afraid that it may be a hotel search tool for those sophisticated travelers who never use OTAs (like myself), and who go to the airlines then search hotels separately. If all properties were involved, it would be a terrific product for that narrowcast requirement. An OTA blocker? I would call it, at best, a speed bump.
About Hotel Mogel Consulting Limited
Hotel Mogel Consulting Limited works exclusively with investors/owners/operators to help solve critical investment, management and marketing issues in the luxury segment. We also undertake public speaking at corporate and association events, where an independent point of view is desired.
