LOS ANGELES— Discount travel websites received yet another blow, this time by Hilton Hotels Corp. as the company aims to steer its best customers away from those portals, toward its own Internet channels. Hilton said last week that it is considering ending the allocation of loyalty program reward credit for rooms booked through Expedia, Orbitz, Travelocity and other large discount sites. By doing so, the company hopes to discourage its Hhonors members from using such sites, instead turning to Hilton.com to make bookings. As an added incentive, Hilton plans to start a trial offering this quarter of bonuses such as free movies and room upgrades to loyalty program customers who previously used a discount website and book their next room at Hilton.com. This move is the latest in a growing clash between major lodging companies and discount travel sites who are at odds over the market share of online consumers. Lodging giants such as Marriott International and others, are rushing to improve their websites, following the success of fast-growing Internet sites such as Hotwire, in the hopes of inspiring a shift in the way consumers book travel online. Traditionally, consumers have flocked to third-party sites, as branded hotel sites have failed to use the Internet in the most effective way— with sites that lack the ease-of-use and innovative features found at discount sites. But the recent increased popularity in this medium has acted as a call to arms for hoteliers. A recent study from PhoCus Wright, for example, shows a 49% increase in overall online hotel sales to $6.2 billion in 2002. The research also shows that online sales is expected to rise to 20% of the total bookings come 2005, up from 9% of total bookings last year. For Hilton, web channels account for less than 4% of all Hilton rooms booked and only 1% or 1.5% of rooms booked by loyalty program members. However, these and other lodging websites have been reporting double- and triple-digit revenue growth. So why let Expedia and other discounters become familiar with that rapidly growing segment of its customers, asked one Hilton executive, who noted that someday consumers could be making a “choice between staying at a Hilton hotel or an Expedia hotel?” Six Continents Hotels shares a similar sentiment, as the company launched last spring a program that guarantees the lowest Internet rate for its hotels on its proprietary websites. The Lowest Internet Rate Guarantee promises consumers every hotel reservation booked directly through a Six Continents Hotels website is guaranteed to have the lowest rate publicly available on the Internet for that hotel. If a lower rate is identified within 24 hours on another web site for the same hotel and accommodations, and for the same dates, Six Continents Hotels will honor that rate plus an additional 10% discount. The Guarantee is offered for any Six Continents Hotels brand worldwide, including Inter-Continental, Crowne Plaza, Holiday Inn, Holiday Inn Express and Staybridge Suites. “It’s about restoring guests’ confidence that they will always get the best possible rate when booking directly with us, ultimately instituting their continued return to our brands,” said Tom Seddon, senior vp of strategic services, Six Continents Hotels. Even international travelers and overseas consumers are being sought after for their online bookings. Marriott International recently launched the first three of 10 planned localized international Marriott.com websites, providing consumers with a new way to access Marriott-branded online resources in a local language. The websites launched are for the German (www.marriott.de), Japanese (www.marriott.co.jp), and Mexican (www.marriott.com.mx) markets. Over the next year, Marriott said it plans to add websites in the United Kingdom, France, South Korea, China, Australia, the Netherlands and Canada. According to PhoCus Wright research, 52% of online sales could/should be made directly in 200
