Cendant Sees Internet Marketing As Panacea For ‘Distressed Inventory’ Problems

PARSIPPANY, NJ— Cendant Corp.’s Hotel Divisions agreement to distribute through Hotwire may well shape up as being an auspicious move as much for what it doesn’t mean as well as what it does for the multi-brand lodging organization. As confirmed to HOTEL BUSINESS® by Peter Strebel and Paula Drum— the division’s svp/marketing services and vp/distribution and e-commerce, respectively— the commitment to distribute through the discount-travel website signaled no disaffection with the company’s existing line-up of on-line distribution outlets and “partners.” Nor, they said, did it mean Cendant’s family of hotels would blithely trade rate integrity for stronger sales numbers. According to Drum: “We chose to work with Hotwire— and its audience of millions of Internet travel consumers— because we see it as another viable distribution outlet; one rivaling Priceline.com and able to offer a unique customer base.” However, Drum further pointed out the company would continue to make its product available through other on-line vendors as well, including Priceline, Expedia, Orbitz, Travelocity and its own Trip.com. As Strebel concurred: “Our relationship with Hotwire will expand the on-line reach of our franchised hotels to a wider audience of consumers.” Meanwhile, with regard to any inference of a wholesale softening of the lodging company’s rate structure, Drum said the move allowing 2,000 of its hotels to distribute through what is plainly set up as a discount website “does not present a conflict” to Cendant’s overall marketing efforts. As she stressed, room-availability via Hotwire will only apply to “distressed inventory. “Rate integrity is somewhat complex,” she explained. “As things now stand, we market through a number of channels; channels that include voice, GDS [to the travel agent community]and the Internet [primarily targeting consumers]. As such,” Drum maintained, “there are different rate structures offered over each of these channels, each built on demand.” To this end, she said: “The Internet has shown itself to be a way to deal with distressed inventory expeditiously and efficiently. Hoteliers and travel suppliers had no real such outlets [prior to the inception and blossoming of the Internet].” Indeed, this scenario was underscored by the contention Hotwire customers will reportedly be able to purchase discounted Hot-Rates at participating Days Inn, Ramada, Travelodge, Howard Johnson and Wingate Inn hotels— for advance reservations— subject to availability. Ultimately, Strebel emphasized: “The hotel business is an excellent example of a supply-and-demand model. Accordingly,” he said, “in the future, rates will rise as demand improves and supply slackens.” And while the unfolding of such a scenario might not be guaranteed by any means, Strebel nonetheless allowed that “demand does seem to be /increasing/returning to the lodging sector.” As for a downward shift in supply, he similarly noted that— in light of recent and current market conditions— “lots of planned hotels are just not happening.”