Room Key, a US-based hotel booking engine, recently turned two years old.
We wanted to check in for an update from the company, which is owned by Choice Hotels, Hilton, Hyatt, InterContinental, Wyndham and Marriott.
We spoke by phone with CEO John F. Davis III.
On a scale of 1 to 10, how successful has Room Key been? By what yardstick?
I'm pleased. We've doubled our conversion rate since launch.
The hotel chain shareholders are pleased, too. They like the amount of bookings they're getting out of Room Key. We're not profitable yet, because we're reinvesting in the product for future growth. The shareholders are okay with that.
Since September 2012, we've added about 20,000 to 30,000 hotels, bringing us up to well over 70,000 properties worldwide. We have 35 employees. On Monday we moved our engineers in Charlottesville into a new office building.
Room Key has been described as an "exit traffic safety net for larger hotel brands". This means that users who click away from a major chain's own "brand.com" website will see a pop-up that invites them to use Room Key. The goal is to tempt users to compare rates via Room Key's larger subset of hotels rather than go off to an online travel agency or metasearch. Is that still the core proposition?
Yes. From our first month, we had 14 million unique visitors because of our unique pop-under ads exit strategy. We're roughly at that level today, though it's seasonal.
The strategy has been a blessing. We used exit traffic as a runway to get our enterprise off the ground.
What else is ahead for Room Key?
This year, we're doing something no one else has done. We're going to enable a more personalized set of search results that incorporates actionable information based on a traveler's loyalty points program totals.
We are going to introduce the option for shoppers to create a membership at Room Key, by sharing with us their loyalty membership account details for the major brands. Then we'll update the search results for the user, making it easier for him or her to shop based on their status.
For instance, say you created a log-in with us. Once you told us your loyalty program information, our system would produce search engine results that do two things.
First, highlight hotels where you have status. [See image, below, for a test design that is in beta testing.]
Second, when you click for details on the hotel, you will see exactly what your level of membership entitles you. With your status, you might get free breakfast, free wifi, late checkout, etc. That helps you compare apples-to-apples the true value of a booking, not just the price.
An additional element we plan to have fully rolled out by end of the year is a dashboard. You can see in a grid how many points you have in each program. This will help a consumer decide if it makes sense to make a booking with a particular chain to push them over into a higher tier of status. [See below, for design that is in beta testing.]
In 2015, we aim to make the booking engine more customized and granular. We plan to inform users if a stay in a particular hotel will push them over into the next tier of status and what that tier of status could bring them.
As a side note, the recent UK regulatory decision on rate parity has been an eye-opener for the industry. A differentiation based on programs is allowed. Loyalty program members can be treated differently in the rates they are shown.
Consumers are using mobile devices more and more. How does that affect your site?
Mobile browsers don't show the pop-ups. To thrive in the mobile age, we'll need make Room Key more of a direct destination in its own right.
We're focused on developing a mobile browser strategy. Last week, we finished testing our responsive design. We aim to have it fully rolled out by the end of the summer.
Here's one problem we're addressing: Today, if a user clicks through to the mobile booking site of one chain to complete the transaction, and then, in a different transaction, to the mobile booking site of another chain, they'll face different processes, different user experiences -- which is a friction.
We aspire to reduce that friction by creating a consistent, universal user experience for completing the booking by smartphone. Hopefully by the end of the year.
Is there a B2B play?
Eventually, we believe so. We could sell our module as a booking engine just as OTAs and metasearch companies do for third-party sites.
Our competitive advantage is that we send users directly to a hotel's booking system. There is no bait-and-switch in the consumer's mind, where they think they're booking with a hotel but they end up booking with an agency. For a particular demographic, direct booking is very important.
Why should independent hotels and small regional chains trust that they'll get fair play on Room Key, and that the big boy brands won't snatch all the premier slots on search results?
It's an easy sell. They get a shot at tempting the customers who have just decided not to book at one of the six major hotel chains. This is access to people who are in the mood to shop.
They get to free ride on the web marketing effort of the major brands. They get direct connect bookings; it is more cost-effective than the OTA or metasearch alternative.
Hotels can set up connections via their existing channel manager. Examples, we've recently added Apex Temple Court Hotel in London (Chain: Apex, listed on Room Key via Sabre Hospitality/SynXis) and Hotel Felix in Chicago (Independent hotel, listed on Room Key via TravelClick).
We are especially interested in adding hotels in the Las Vegas area, and some other geographic gaps we have in our coverage.
We've been building out our international coverage, too. Since launch, we've added sites in New Zealand and Australia and we're encouraged by the results.
We need to add a lot of international properties to our inventory. We've been gaining momentum in adding small brands, such as Okura Hotels & Resorts, Lebua Hotel Group and Nikko Hotels.