NEW YORK— During the Navigating Uncharted Waters panel at the NYU Hotel Investment Conference being held here June 2-4, hotel COOs rebuffed the idea that price wars have taken over the Internet, and instead suggested that brands are merely trying to “take back control” of their room rates. “The issue here is inventory control rather than price wars,” said John Emery, president/COO of MeriStar Hotels & Resorts, who noted that his company has restricted its hotels to working with three or four websites that work best for the property. “If a particular hotel needs to discount, then we’ll discount for that specific hotel… We look into all distribution channels that help,” he said. Robert Cotter, COO/Starwood Hotels & Resorts Worldwide agreed “we’re not in a price war.” However, he believes the recent, frequent RevPAR announcements are responsible for the for the focus on rate declines. “The RevPAR announcements focus on rates, but it’s not just rates. It’s the change in segmentation. Our premium customers are not there like they were before,” said Cotter, adding that the Internet caters to a different breed of travelers more focused on low prices. Cotter noted that more than two-thirds of Starwood’s online reservations are made through its own branded websites, and that the company “is taking control of its site,” specifically through a new Internet rate guarantee. “Starting June 1st, our best prices are on our site.” While Loews Hotels EVP/Operations Sherrie Laveroni agreed that the company is not participating in any price wars, she also noted that the company only sees about 4% of its reservations online. “While that’s triple what we booked online last year, it’s still a relatively small percentage,” said Laveroni. In addition, Dieter Huckestein, president/hotel operations for Hilton Hotels Corp., and Steve Porter, COO/Six Continents, discussed the highly anticipated HDS online hotel consortia— which Hilton and 6C both helped found, among other hotel companies— and how the new venture might affect online travel buying. “All of us in the industry are grappling with rates and the Internet,” said Porter, who noted HDS should help create a lower cost online distribution channel that puts more dollars back in owners’ hands. Huckestein added, “HDS had been in the development stage for several years… It’s become apparent to all of us that the online business is here to stay. The question now is: how much are we going to have to discount?” —Diana M. Rodriguez
