There is so much buzz about Room Key, I thought it would be a great time to take a detailed look at the new kid on the block to find out what makes it tick and why consumers should consider using it to book their next guest room. This just in…Best Western has announced that they have signed on to become the first commercial partner to supply hotel inventory to Room Key.  More on that news in another post.

The Homepage - At first glance I like the clean approach to the homepage.  It’s simple and straight forward and leads the visitor to do mainly one thing only…search for a guest room.  Yes the search process is simple and fast but I don’t see where the “fun” comes in.  Their “We Believe” preamble suggests that the consumer should feel “uber-confident” that the rates they are looking for are the best ones out there.  This is going to be a tall order knowing that most of these hotels have contracts with OTAs that may not allow the subject property to provide the best rate possible.

Suggestion – If you’re going to stick your neck out to suggest that the rates are the “best ones out there” then uber-upgrade the comment to include the words “best rates guaranteed”.  If you can’t guarantee the best rate then don’t imply that the rate are the best out there.

Also, there is no social share options/icons anywhere on the homepage.  What is one to do should one like to share the site with family and friends?  Since this is so obvious I’ll write it off as an oversight or TBA.

If you want to be downright picky, I’d move the “Search” button to the right of the “Guests” drop down.

Search – I’m going to conduct a search for Chicago.  Since it’s a new site and not all hotels are participating I’ll choose the third largest city in the country just to be fair.  I like the idea that I can conduct my search by City, Address, ZIP Code, and Airport Code.

Search Return – The search return is fairly complete and manageable and offers some simple sort by features that don’t clutter up the page like the OTAs are so good at doing.  Another thing you will note there are no ads on the sidebar or at the footer of the page.  Job well done.  I’m curious why the Park Hyatt Chicago landed in position one so I started the search over and found that the Park Hyatt Chicago showed up in position one again.  Maybe Hyatt has more skin in the game than does Marriott.

Suggestion – Let’s return to the subject of rates.  If I can’t compare rates from other sites (you know that prospective customers will feel the uber-urge to do so) then what information can you provide that suggests otherwise.  You didn’t convince me, as you suggested on the homepage, that this is the best rate out there.

Hotel Selection – I’m going to walk through the options for The Drake Hotel (Hilton brand) to see what details are provided.  When I click on the hotel link, a separate page appears with the hotel details to include photo, map, price, amenities, etc.  I also discovered that I can email this (email icon in the upper right-hand corner) with family and friends via email.  Good idea but not good enough for what your prospective audience may expect.  When I click on the bed configuration the same screen pops up.

When I click on the rate or the book button (displayed at $139) I am transferred directly to the hotel’s booking engine.  All of my original search perimeters are transferred as supplied previously and I can choose from “Best Available Rate” (this is an unrestricted rate at $159), Advanced Purchase Rate (full payment in advance – non-refundable rate at $139), “Bed & Breakfast Rate” (restrictions at $189), “Drive In Special Rate” (includes overnight valet at $184), “American Grill Package” (breakfast, Internet, American Girl doll at $194), “Senior Rate” (age restricted at $149), and the good ole “Romance Package” (romance not included at $199).

Suggestion – If the search return features a rate at $139 then place that rate category at the top of the booking options return. When your prospective customer sees the rate of $159 in position number one when the previous page suggested it was $139 then it only serves to confuse the customer.

Booking Process – I chose the $139 rate, click to continue, and now have the option to complete the booking process to include guest, contact, and credit card info.  I can sign in using my Hilton HHonors rewards number and pin to bypass the need to enter my personal data manually.  The balance of the page contains all of the legal stuff that one would expect and finally the booking process is complete.

A cross-check on the hotel’s website listed a non-refundable rate for the same set of dates and bed configuration at $134. Can you say busted!!!

Summation – All-in-all Room Key is a welcome addition to the direct connect distribution channel and I am confident that John Davis and staff will include future bells and whistles that the site will need to attract and retain an audience.

Pros

  • You’ll be dealing direct with the hotel and not a third-party (should something go sideways with your reservation)
  • You will be accruing rewards points with all hotels that offer a program
  • Nothing to influence your purchasing decision
  • No hidden fees

Cons

  • No P2P architecture at this juncture
  • Can’t share on social media (just email for now)
  • Limited hotel participation (Inventory will grow quickly – Best Western is now #7 to join)
  • No rate comparison
  • No air options
  • No car options

Tom Costello is an entrepreneur, consultant, author, and principle of iGroupsAdvisor Hotel Consultants and has more than 20 years of experience in the hospitality and travel verticals.  Connect with Tom on LinkedIn, Facebook, and Twitter or contact him by email.  Order Tom’s new book “Prepare for Liftoff – How to Launch a Career in Sales


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Comments
  1. [...] Also see: Breaking Down Roomkey.com So You Don’t Have To [...]

  2. Very good and detailed analysis, Tom. Thank you!

    Linchi Kwok

  3. Nick Meiers says:

    Thanks for the review. I checked out the site. It’s nice, but a crowded market and they’re late to the game. Their success depends upon if they can get a reputation for returning the best rates.

    • igrouptoday says:

      Rates will certainly be part of the equation. The other major hurdle they will have to overcome are a few of the third-party distribution channels known as Expedia, Priceline, Travelocity, Kayak.

  4. Where do you think they are going with this? You mentioned on Techcruch it was just to lessen the dependency on OTAs? I agree with you about the best rates .. it should be guaranteed. It seems like since they are saving on commission they could afford to do this and that would be a big enough reason to use them. The only drawback I see is the lack of inventory is a minus to the customers and that the big chains dont have any reason to bring in smaller players just so they can have a more complete platform.

    • igrouptoday says:

      David,

      I think their strategy is designed to take more control of their distribution channels with the intention of providing an environment where prospective customers can one-stop-shop a guest room AND book direct with the hotel and not through a third-party.

      Most of the reputable brands display a lowest price guarantee on their site and Room Key should be able to do the same for each hotel that has one. I would place a small “guarantee” icon in the hotel’s listing in the search return. That would help to convert a looker into a booker.

      I am confident that Room Key will reach their goal by the end of this year and according to CEO, John Davis, that number is 80,000 hotels. Their current inventory level is 23,000 and I am not sure if that includes the recent announcement by Best Western joining the rest of the brands. Watch for similar announcements within the next couple of weeks.

      Online bookings continue to grow and so are the costs. When you book online direct with a hotel that transaction cost to the hotel is roughly $15. When you book online through an OTA that transaction cost climbs to $75 to $100+ depending on the rate.

      If you want a real eye opener, play around with this calculator to see how theses cost affect a hotel’s bottom line.

  5. Nick Patel says:

    Ok, So now we have more then six major hotel chain part of this website and they said some OTA will be joining too…. What is difference between this website and Kayak?

    • igrouptoday says:

      Not sure if any OTAs will be joining this site Nick because it would be counter productive to their direct connect business model. One of the major differences is the Kayak provides the customer with the option to book through an OTA and you won’t find that on the Room Key site.

  6. Are Morch says:

    Hi Tom.

    Great review and breakdown here of Roomkey.com

    No doubt there is room for improvements if the goals is take on OTA’s.

    But I welcome this addition, and we will have to follow it closely to see if make an impact related to more direct bookings. I would like to see more interaction that would add value to the guest experience. No doubt your points would add that extra value.

    Cheers..

    Are Morch
    Hotel Blogger

  7. Thanks for this very thought through explanation. It helps those of us tasked with estimating the impact of Roomkey.com on the market.

  8. Great breakdown. In the Pros you mentioned “nothing to influence your purchasing decision”, do you mean there is nothing to distract a visitor from buying?
    I also checked their site on my Iphone and they are using the exact same site providing the same experience as the desktop. Since it is a new venture I would expect them to be on the ball with this but I suppose I can wait for a little bit to see how they handle mobile.
    Also I don’t think you are being picky about the search button, that is the first thing I thought of when I checked the site. Providing great user experience has to be one of the main goals. I am a big believer of Web Optimization. Hopefully they will keep testing their site for improvements and better conversions.
    Cheers!
    Raj

    • igrouptoday says:

      Thanks for your comments Raj. Yes I was referring to nothing to distract a visitor from buying.

      I believe they are currently working on a mobile version of the site. Once again this is the hotel business and maybe one of these days we can help them to get ahead of the curve and increase sales…mobile apps.

      • Somehow our industry is never ahead of the curve. Mobile apps and then it will be interesting what happens when truly smart TV’s come into the market place.
        Anyhow, let me know what is the best way to connect with you. I wanted to share some of my thoughts which will help you increase your blog conversion/signups that is if you are interested.

      • igrouptoday says:

        Raj feel free to send me an email to tom at groupsinternational dot com and let me know what your thinking about.

  9. Mihir Nayak says:

    This was a great step by step breakdown Tom!

    And I agree with your point about the Best Rate Available.

    But as an independent Hotelier, I just don’t get the strategy of big brands like Marriott supporting such a website.

    I mean, it doesnt make sense to pit yourself against your competitors based solely on price, does it ?

    I know that some people say that this is an answer to Google.

    But in my book, an answer to Google would be to improve my own website, make it simpler and easier to book (Marriott, are you listening?) and improve my branding on Social Media.

    Not helping customers choose based solely on price…

    Cheers
    Mihir

    • igrouptoday says:

      Hello Mihir and thanks for sending in your comments about Room Key and following me on Twitter.

      Not sure what convinced Marriott and the other brands to jump on board but anything that will help them to lessen their dependency on OTAs can’t hurt. I was informed that a conversion will cost the subject property 10 percent of the total booking. Is that a deal? As compared to what most hotels are paying Expedia I would say yes.

    • Nick says:

      And Mihir, Do you know that all those brand who join this website will be “DIVERTING” some of their brand’s website traffic to this roomkey.com? I do not see any reason for brand to do that. The hotels will be paying 10% comission to roomkey.com website when hotel should have got the free booking through brands own page because guest was already on brand’s website.

      • igrouptoday says:

        Nick,

        Hang on their partner. Let’s look at this from an unbiased perspective.

        All of the brands who are involved with this site already distribute approximately 20 percent or more of their existing inventory through third-party sites such Expedia, Travelocity, and Priceline. The simple objective is to divert some of that traffic back direct to these participating hotels. It doesn’t take a rock scientist to figure out the math behind this move. You pay an OTA like Expedia a merchant deal and, on top of that, a commission of 25 percent and anyone in their right mind can figure out which is the better option. If you can’t, it’s Room Key Nick.

        Nick, you’re correct as it relates to your assumption that it is less costly for a direct conversion between a customer and the hotel. That online conversion cost is approximately $15 per transaction (the same information that I shared with you in response to your comments about the same subject on LinkedIn).

        The 10 percent commission is considerably less than what hotels are paying to the OTAs. I am not privy to all of these hotel’s agreements but I can assure you it’s much greater than the former.

        At the end of the day it’s about distribution, those channels, and finding the right balance between the direct distribution channel and indirect distribution channels.

  10. chris says:

    Interesting review and a nice discussion going on here but i don’t understand one of the fundamentals of the website?

    • igrouptoday says:

      Chris,

      Not sure what determines the order of the search return. I questioned that myself when I ran a couple of searches for Chicago and the same hotels appeared in the same order each time I conducted the search.

      • igrouptoday says:

        Appears to be US friendly at this time Angi but I am sure there will be some a tool to convert the rate into other currencies. Nice catch by the way!

  11. Angi says:

    I enjoy reading the different discussions. I have a concern the only currency diplayed is US Dollar, maybe they can have the prices set for 3-4 different countries or is it only US Friendly site?

  12. Tomos says:

    It will be interesting to see if RoomKey will be successful in cutting the other OTA’s out of the market.

    It seems like there is suddenly an abundance of hotel search engine growth and innovation. Room77 are going down the concierge route, and HotelSweep are going direct like RoomKey but using information extraction to cover all hotels not just partners.

    And I wonder if RoomKey can beat their best rate guarantees they have with other sites.

    • igrouptoday says:

      Tomos the objective of Room Key is not to cut out the OTA but to lessen their dependency on them as a third party distribution channel.

      Certainly “interesting” more so than “innovative” for startups like Room-with-a-view or HotelSweep.

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