PARSIPPANY, NJ— In an effort to attract more Internet users to its own travel websites, Cendant Corp. has become the latest in a string of hotel companies to offer an online rate guarantee. Effective June 17, online travel buyers that find a lower rate on any Internet distributor other than its own brand websites, are guaranteed the hotel in question will not only match the lower published rate, but also offer an additional 10% discount. Cendant’s Internet promise falls in line with that of Six Continents Hotels and Starwood Hotels & Resorts Worldwide—which both kicked off web guarantees in early May. 6C’s rate promise took hold May 1 and Starwood’s will take effect on June 1. “Cendant has been carefully researching an online guarantee for months,” said Peter Strebel, svp/marketing & sales for Cendant. “We’re not just following suit. We would have rolled it out anyway.” All three hotel companies are touting strikingly similar guarantees— each offers a 10% discount, and requires the web rate in question be for the same date, hotel, and room type. Also, all three exclude opaque sites and package deals. “With Hotwire and Priceline, people don’t know the brand name [before they book],” said Strebel. “We’re targeting the retail sites.” The basis for the new online guarantees is a desire to shift consumer focus from merchant models like Hotels.com and Travelocity, to hotel brand sites— the cheapest form of distribution for any property, said Strebel. “We want to make sure customers feel good booking through our brand websites,” he stated. “We can’t dictate how our franchisees distribute inventory… We’re only asking that they give the same low rates to their own site. We spend a lot of money marketing our brand websites, and it’s the by far the cheapest distribution field. It puts the dollar back in the pocket of franchisees.” He added that according to Forrester Research, the average online travel buyer visits three different websites before making a hotel reservation. “We have millions of eyes on our site, now we’re looking to increase our reservation conversions,” he stated. The main criticism of online guarantees? Hotel websites are incapable of competing with the widespread distribution and registered users of third-party travel websites. Hotels.com has a $20 million annual marketing budget with an email list that consists of 2.5 million registered users, and additional 35 million email addresses drawn through its affiliates, according to Bob Diener, president/Hotels.com. Expedia.com’s hotel inventory consists of negotiated rates with nearly 5,000 hotels and GDS rates from more than 40,000 properties that equated for about $1.1 billion in gross bookings in the first quarter of 2002. “We offer better value, better exposure, and millions of email addresses,” said Suzi LeVine, director of product marketing for Expedia.com. However, Strebel was quick to note that Cendant is not trying to discourage hotels from distributing inventory throughout the Internet. “[Third-party Internet sites] are very valuable to franchisees and offer incredible reach. We’re just saying that if a franchisee is offering those sites low rates, the same caliber rates should be offered on their own brand website,” said Strebel.
Peter Strebel