Improving the guest experience from the moment they book accommodation to the time they return home is something all hotels are striving for. The six global chains which founded Room Key, a website to encourage people to book direct with a lowest fee guarantee and loyalty points to boot, are no exception.

Founded nine months ago, Room Key started small but has grown quickly, reaching over 4 million unique visitors in July. However, though it has clearly been supported and backed by the hospitality industry it is still faces a number of challenges. Looming large among these are raising brand awareness and gaining recognition in a world dominated by established online travel agents.

However, in May the site’s‘beta’ tag was removed and reviews from sites like TripAdvisor were more tightly integrated into the hotel information pages. Most importantly, according to research firm Compete, was the formation of a partnership with Travelocity’s res99.com network; this made the site more of a hybrid. For customers that meant more choice but it also meant that Room Key drove bookings to Travelocity rather than its own partner sites.

Against this backdrop EyeforTravel’s Ritesh Gupta talks to Lincoln Merrihew, MD of Automotive and Travel at marketing intelligence firm Compete about how Room Key venture is shaping up in such a competitive environment.

EFT: What do you make RoomKey’s performance so far? 

LM: So far so good, but the challenge is that there really isn’t a valid benchmark. Room Key is a hybrid in this space, given that it’s essentially an OTA-like site run by suppliers. Its mission is to keep hotel bookings with the family of the founding members, but ultimately to create incremental traffic, with the bigger goal of driving a net increase in revenue.

It’s gaining traffic, which is a positive, but it’s still a bit too early to gauge the extent to which its materially impacting the consumer research and booking path, and that’s a function of its ability to build brand equity and recognition.

EFT: What are the strengths and weaknesses of this venture and how could it improve?

LM: Strategically, Room Key’s strength is support of and backing by the hospitality industry, both the concept and the actual site. This gives consumers breadth and depth of choice in selecting a hotel, but also the reassurance that booking through Room Key means they are booking directly with the hotel where they’ll stay and so will receive all the benefits that go along with that.

Room Key’s biggest challenge is its lack of brand awareness and recognition relative to some of the established OTAs. That’s a work in progress and to a large degree a function of time (many OTAs have been around for years) but also Room Key’s share of voice (the leading OTAs have sizeable marketing budgets).

One of the most interesting features is that it launches as a pop-under (loads behind the browser) rather than a pop-over (loads above the browser window). This is a strength as it’s a less intrusive or more ‘polite’ way to appear before the consumer. However, consumers may only see it only after finishing other activities. It’s a delicate balance to be seen as a subtle partner versus an in-your-face hard sell, and Room Key to date has been more subtle and polite.

EFT: How has Roomkey.com evolved since launching?

LM: It has gained traffic and has started building its own brand equity. It has also formed some strategic partnerships like the one with Travelocity. Its further evolution will hinge in large part on being able to go head-to-head with established OTAs, meaning in the same discussion with Priceline, Expedia, etc.

EFT: What is in there for users –be it for planning or booking a room?

LM: The value for consumers is essentially more choices, much like OTAs offer. That is, your hotel search results are not limited to a single brand’s properties but instead you can choose from a range of properties, which in theory increases your likelihood of booking with at least one of the founders (or partners). To the extent its important, users also get to book directly with the property where they’ll stay, so more of a direct transaction than through a third party. Compete research has shown that consumers believe that advantages of booking direct include greater flexibility in terms of things like making changes to existing reservations.

EFT: What role is it playing in distribution as of today?

LM: Room Key’s role in distribution is still evolving. Today, it’s more of a backstop for the founders in an effort to keep bookings within the family – in other words minimising lost bookings. That’s important and has huge financial upside. The value of lost bookings across the travel industry can reach into the billions of dollars, so it’s a big challenge. In the future, to the extent Room Key can build its own presence and brand equity, it may become a destination in and of itself (much as many OTAs are today). If that happens, there is a high likelihood of bringing incremental traffic and bookings to the founders.

EFT: To what extent are suppliers and intermediaries being impacted in the distribution chain?

LM: It’s too early to tell the complete impact on the distribution chain, but the potential is there. Lots of things need to happen to realise that, including building Room Key brand awareness and cementing its value proposition with customers. The latter is a moving target as established and new players are all trying to raise the bar all the time. That can create benefits for consumers but in some cases some confusion for consumers; the confusion can be an opportunity.

EFT: Can you provide any insights into about the quality of traffic that is reaching the site and the intention of those consumers?

LM: Right now the traffic is largely coming from the founding hotels themselves so the quality of traffic reflects that. The more interesting challenge is that as the Room Key brand evolves its traffic volume and quality will evolve as well. Ideally it will capture spillover traffic from the founders’ sites but also attract its own audience.