ATLANTA— InterContinental Hotels Group is taking a stand against the business practices of some third-party online travel companies in an effort to provide more consistency to consumers and to help level the field for hotel owners. Effective the end of this month, IHG is adopting a new standard for its portfolio of brands representing more than 3,500 hotels for selling or re-selling hotel room inventory via all online travel companies. The measure was unanimously endorsed last month by its franchisee association, the IAHI. With this, IHG executives said the company is committed to only working with distributors and their affiliates which do not engage in confusing and potentially unclear marketing practices; which clearly present taxes and fees to consumers; which respect IHG’s trademarks; and which ensure reservations are guaranteed through an automated and common confirmation process. The new standard also ensures that hotel owners are able to provide the best available rate, realize efficiency gains from the Internet— which they can reinvest in their properties— and better, manage inventory. “A standard has to be in place to address the problems with online travel distributors,” said Tom Seddon, senior vp/Americas Brand Performance for IHG. “These problems [impact]the consumer and create problems for the hotel owner. We have come to the conclusion that some of these problems are so important that they have to be solved, or in good consciousness, can’t have a brand initiative behind it,” he said. Seddon listed as confusing and potentially unclear marketing practices: customers who go to an online distributor’s website to find a hotel may see a hotel listed as “Sold Out” when that hotel actually has rooms to sell; customers who may be lured to a website with the promise of huge discounts on recognized hotel brands, which may not exist in any meaningful quantity; and customers searching for a specific hotel brand who are diverted to another website without their knowledge or consent. IHG promises it will not work with distributors and their affiliates that commit to not engaging in any of these types of practices, according to Seddon. “If the distributors are not willing to solve these problems, we are ready and able to pull out our 3,000 hotels from that distributor. We would rather be out of the distribution channel that is unwilling to work with these standards,” he said. Leroy Lail, chairman of the IAHI and owner of two Holiday inn Express hotels and one Holiday Inn Select in the Hickory, NC area agreed, saying IHG is making a strong statement and drawing a much-needed line in the sand. “IHG is absolutely on the right track. The reservation system we have as franchisees is highly automated and we get really good reservation information. With the third-party providers, it’s sort of parcel and part of voice, fax all different ways,” he said, adding this has created a lot of problems for the hotel owners. Lail also said that hotels have been losing business because the third-party distributors have listed rooms at particular hotels as “sold out” when they clearly were not, and have instead migrated the customer to other properties. To this end, IHG will only work with distributors that either already have automated the booking, payment, and settlement processes or are committed to automating the processes in a short period of time, Seddon said. Further, IHG will only work with distributors that commit to clearly showing all guest charges and to helping hotels directly address the question of the appropriate taxation basis, Seddon said. Consumers have a right to know what they are paying in taxes and what they are paying in service fees, he said. The company also said it will only work with distributors and their affiliates who commit to working with hotels to comply with IHG’s best rate available promise and who commit to allowing hotel owners to respond to market supply and demand. Finally, the high cost of so
