There is a lot of skepticism in some parts of the travel industry about the long-term prospects of Room Key, but its traffic numbers were off the charts a month after its beta launch because of what could be a ground-breaking pop-under advertising strategy.
If the Compete numbers are to be believed, Room Key, founded by Choice Hotels, Hilton Worldwide, Hyatt Hotels, InterContinental Hotels, Marriott and Wyndham, drew more than 1 million monthly unique visitors in February.
And, that's a 278% increase over the numbers in January, when the Room Key beta arrived.
The secret sauce appears to be a low-cost marketing push and a behind-the-scenes metasearch strategy by Room Key and its founding hotels.
As some lookers are leaving the founders' brand.com sites without booking, the founding hotel sites serve up a Room Key pop-under ad showing images of the seven closest hotels on Room Key with availability and the same star rating, as an alternative booking option.
The hotels don't load special rates into Room Key, but consumers will find participating hotels' best available rates there.
Hotel metasearch technology from hotelicopter, acquired by Room Key last August but not publicized until early this year to keep Room Key under wraps, powers the comparison shopping behind the scenes while consumers are searching for stays on brand.com.
"The exit traffic is key," says John Davis III, Room Key's CEO.
Davis notes that founding hotels contract to provide a certain amount of exit traffic to Room Key, and the hotels are ramping up to reach their targets by the end of April.
For example, if a brand is committed to providing Room Key with 100,000 visitors per month via exit traffic, they are currently providing a percentage of that traffic and will be increasing it through April, Davis says.
"They are giving us access to millions and millions of consumers," Davis says. "And, we are tying the Room Key brand to their brand."
The pop-under strategy is a low-cost marketing play for Room Key participants, Davis says.
Despite the dramatic increase in site visitors to Room Key, the hotel brands have faced some technical glitches along the way which they are striving to straighten out.
For example, the following pop-under ad for Room Key appeared under Marriott.com for at least one consumer before he even completed a hotel search and prior to exiting Marriott.com.
Despite the glitches, the pop-under strategy appears to be working very well for now in terms of generating traffic.
However, there are several potential pitfalls.
For example, Davis points out that consumers may not be able to see the pop-under ads because they may be hidden by other windows.
In addition, some users employ pop-up blockers so the ads won't reach their target audience in that case.
And, Room Key could potentially generate a backlash against the site and the brand.com sites because consumers could get angry about what they may deem to be intrusive advertising.
But, as Room Key is undoubtedly off to a bold beginning, as with any startup, its directions are an open question, even for Davis.
Asked which hotel or online travel agency sites Room Key intends to steal share from, Davis counters: "I'm not stealing share from anyone at this point. I'm trying to get some share."
He notes that is unknown to which sites consumers exiting brand.com and navigating via the pop-under ads to Room Key would have gone had the pop-unders not been served up.
Consumers may shop 15 sites or so on average before making a hotel booking, but which specific sites would feel Room Key's impact remains to be seen, Davis says.
"We don't know where the exit traffic would have gone," Davis says.
At least one of major US-based online travel agencies, which live or die on hotel sales, cited Room Key as a potential risk factor to their health and prospects.
Room Key is shedding no tears about OTA fears because the hotel industry has long sought to take back more control from the OTAs over the hotels' businesses.
A lot of industry insiders have downplayed Room Key's potential, citing similar such failed hotel-industry efforts in the past.
But, perhaps they will start playing closer attention now -- or should, at least.
In other developments, further details are coming out about Room Key's August 2011 purchase of metasearch engine hotelicopter in an asset sale.
Room Key bought the technology, and the entire hotelicopter team of 15, based in Charlottsville, Virginia, will remain there working for Room Key out of its new technology headquarters. Room Key itself is headquartered in Dallas, Texas.
Adam Healey, the former hotelicopter CEO and now vice president of Room Key's soon-to-be affiliate business, says hotelicopter was not cash-deprived before the sale because it had received a funding round in early 2011, bringing the funding total to $5 million.
He said hotelicopter already had direct-connect relationships with two Room Key founders, InterContinental and Hilton, as well as Room Key partner Best Western, and welcomed the opportunity to grow and influence the travel industry as part of Room Key.
"We were pleased with the acquisition," Healey says. "We were pleased with the terms. Our investors made money."
The hotelicopter platform is now the technology foundation of Room Key, Healey says, adding that the company is rebuilding the tech platform to power third-party sites on an affiliate basis.
Hotelicopter traces its roots to the 2006 founding of VibeAgent, and it rebranded to hotelicopter in 2009 with a focus on hotel metasearch.