Room Key recently announced new partnerships with La Quinta, Millenium Hotels & Resorts, and the Leading Hotels of the World, bringing the total available properties to nearly 50,000. So what does this mean for the fledgling hotel booking engine?
Room Key is the consortium co-founded by the unlikely alliance of Choice Hotels, Hilton, Hyatt, InterContinental, Wyndham and Marriott, who came together to provide an OTA counter-weight that drives direct bookings to member properties.
The question repeatedly raised across the industry is whether or not such a diverse group of companies with competing interests can truly create a competitive product that delivers enough of a premium user experience to siphon visitors away from the OTAs.
The company's core marketing strategy has also been called into question.
Relying primarily on pop-unders from member hotels' websites, Room Key receives most of its traffic only after a user has closed a booking window from a participating hotel's website. The user is then greeted with a pop-under that urges users to "take a look at more hotels courtesy of RoomKey," and presents them with other hotel brands under the Room Key brand.
This strategy is novel, and actually promises quite a bit of value to both hotel brands and users. Perhaps the user was heading off site to look at an OTA where there's more variety of selection; perhaps the user was seeking a different class, price or style of hotel; perhaps the user simply was fed up with the hotel's website.
For any of these use cases, Room Key provides a valuable service to the user - assuming the user doesn't see it as spam.
And for the hotels, rather than miss out on the booking completely, it would at least stay within the Room Key ecosystem. The hotel that lost the booking would not gain directly, but would nonetheless participate in a sliver of the transaction on the Room Key side.
The unity is also valuable as far as developing an alternative to the OTAs and preserving the guest experience across properties. Bookings via Room Key come with a lowest rate guarantee, do not have any booking, cancellation or change fees, allow guests to earn rewards points, and book a preferred room upfront.
With a growing stable of hotels, Room Key's diversity of selection is laudable. The overarching business challenge here is sustaining a traffic level that delivers sufficient bookings to ensure a profitable free-standing business concern.
In order to be successful as an OTA alternative, Room Key must deliver enough brand recognition to become more than just an exit traffic safety net for larger hotel brands. Can Room Key accomplish this challenge? Or is the exit traffic strategy defensible enough for Room Key to build a solid business without consumer brand recognition?
To find out more, we invited Room Key's CEO, John F. Davis III, for a Q&A interview with Tnooz.
What exactly is Room Key and why is it an "innovative search engine?"
Perhaps the easiest way to express Room Key’s unique position in the industry is to look outside online travel to another relevant consumer trend – in food. We see real parallels with the farm-to-table movement – the idea that building connections between the local producers/farmers and consumers brings us healthier foods.
At Room Key, our vision is that by connecting consumers directly with the best the hotels have to offer, we are able to deliver a better experience, from booking through to stay. What you see in our launch experience are the foundational searching elements presented in a way designed to make selecting the right hotel easy and efficient. Looking ahead, Room Key will increasingly marry personalization and offerings that only our unique position within the hospitality industry can deliver to consumers.
How will this added inventory help the consumer book the hotel they want when they want at the best price?
We know that breadth of choice is important to consumers when they are searching for the right hotel room. We also believe that enabling consumers to book directly with the hotel where they will stay provides them many benefits, including the best rates guaranteed directly by the hotel. Room Key marries breadth of choice with the ability to book directly – ultimately providing consumers the best hotel search experience today.
What are the actual conversions from this vaunted "14 million a month" figure? 14 million is great, but if they're all pop-unders on exit traffic that never actually click-through, then you can understand our skepticism. So how many room nights have been booked from these 14 million visits?
Room Key’s business model was built on the concept of exit traffic, and for a business that is still quite new, only having removed the beta tag from our site 3 months ago, the scale of this exposure exceeds our initial expectations. The introduction, branded by the referring company, to this highly qualified audience – 100% of the views are by consumers who are actively in the market for a hotel room and whom we know are predisposed to book directly on a hotel’s site – makes this not only a large but also a highly engaged audience. As a result our conversion rates are very much in line with the objectives we set for the business and are meeting shareholder expectations, bringing millions of visitors per month into the Roomkey.com experience.
How many of these 14 million are actually typing in http://roomkey.com into their browsing windows to start their hotel search?
Approximately 5% of our traffic is coming direct.
Moving forward, how will these new partnerships position Room Key to be a valuableresource for consumers, and become their first stop when shopping for hotels?
As expressed, by marrying the breadth of hotel choice with the ability to book direct, Room Key is able to provide consumers the best hotel search experience available. These new partnerships allow us to offer more direct booking options, thus meeting a broader spectrum of consumers’ preferences. And we believe this will ultimately drive travelers to come to Room Key when they are searching for their next hotel.
What is the "tailored hotel shopping experience...that travelers are seeking today" and how is Room Key delivering this experience?
Talking to consumers has made one thing clear to us: booking a hotel room is not like booking a flight or a rental car. Where you choose to rest your head at night is a much personal choice than window or aisle, economy or mid-size. Room Key’s unique support from hoteliers enables us to connect consumers directly with the best the hotels have to offer, today and into the future.
What are the three most important business challenges that Room Key is tackling right now?
We are always continuing to develop Room Key to best meet the needs of consumers. Three months after removing our beta tag, I would say our three most significant business priorities are as follows:
- Maximizing the productivity of the 14MM monthly visits we have today, both for short term booking goals, as well as building our direct consumer base.
- Continuing to expand our direct connect hotel inventory, especially our resort and international presence, to ensure we are delivering consumers a breadth of search results that best meets their needs with all the benefits of booking directly with the hotel where they will stay.
- Ensuring we are present where consumers are making their travel purchases, specifically expanding to have a relevant mobile experience – translating the Room Key experience to be customized for tablet and for smartphone users.