RoomKey.com: Hotel Brands’ Misguided Attempt to Become an OTA

RoomKey.com: Hotel Brands’ Misguided Attempt to Become an OTA

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How many times have I heard the hotel brands say they are going to “fight and win” the Internet battle against the big bad OTA wolves? It’s easy to see why the hotel brands are angry/embarrassed: those OTAs have done a massively superior job of marketing hotel rooms online.

So what have the brands decided to do? Unite and conquer. It almost sounds like a joke! “Hilton, Hyatt, InterContinental, Marriott, Wyndham and Choice Hotels walk into a bar…” The punchline is a website called RoomKey.com. It’s the hotel brands’ very own “OTA” response. Now at this point, I know a lot of you in the hotel industry already know about Room Key. But guess what? Everyday travellers have no idea what Room Key is. There are a few good reasons for that.

Here is why I think RoomKey.com has been set for failure from the very start.

Using Pop-Ups Is Not a Marketing Plan

I am shocked that Room Key’s core marketing plan got approved. I guess the brands had a few million dollars burning a hole in their pockets. The point is that the approach was discussed, approved and “built” (they acquired hotelicopter.com) and has been actively marketed.

You should know that you are setting yourself up for failure when your core marketing strategy revolves around pop-ups. Now this might have passed for an effective marketing play in… let’s say 1999. Today, pop-ups are so dead it’s not even funny. Really. Pop-ups really suck. The only reason we are still seeing any kind of pop-ups when we exit a site is that Internet browsers have failed to develop at the pace of the Internet (looking at you, Internet Explorer!). RoomKey.com gets the majority of its traffic from a “pop-under” that annoyingly appears when you close any participating brand website.OMG. I know, I am shocked, too! How did this get approved and then funded by the big hotel brands? Hypnosis, maybe? If spam (yes, “pop ups” are spam) is your big idea for traffic generation, imminent slowdown/backlash lies ahead.

Pop-ups for Life!

I had a wonderful opportunity to be on a panel with Room Key’s CEO, John F. Davis III. We met at the 2012 Lodging Conference in Arizona. I remember that I was pretty stoked to meet the founder of Pegasus! I am geeky like that. But what he told Tnooz in an interview that appeared in October 2012 is something that baffled me. John said, “Room Key’s business model was built on the concept of exit traffic, and for a business that is still quite new, only having removed the beta tag from our site 3 months ago, the scale of this exposure exceeds our initial expectations.” It’s pretty obvious to me that Room Key’s business and traffic model revolves around, well, pop-ups. Sadly, they think it’s something new and innovative. There is a reason why nobody has built a brand online using pop-ups. They are SPAM (we just covered this).

Farm to Table to Pop-Ups?

Room Key’s CEO also shared that “the easiest way to express Room Key’s unique position in the industry is to look outside online travel to another relevant consumer trend – in food.  We see real parallels with the farm-to-table movement.” Not sure the farm-to-table example is even close to what Room Key is doing. What real value is being provided to someone coming to your website by serving them a pop-up? There is nothing organic about that. What’s truly organic is traffic that you earn through providing valuable content. What’s organic is coming up with a strategy to provide value, build your brand, and attract repeat customers. What’s not organic is grabbing a one-time booking from someone stumbling onto your website via spam. Spam is not an organic food.

Okay, I think you get the parallel between the long-preserved nature of both pop-up technology and mystery meat. Let’s talk numbers.

Traffic Number Exaggerations + Compset Confusion

John Davis claimed to have “14 million visitors a month” in the same October 2012 interview. Compete.com shows their visits averaging 3.7 to 4.8 million; in other words, 10 million visits short of what they stated.

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But hey, Compete.com is just an online tool. It can be off by a few million… right?

John also said that only 5% were direct visits (people who typed Roomkey.com into their browser window). Analytics 101 tells us that with 5% direct visits, the Roomkey.com brand is not actively building itself online. No conversion or revenue statistics have ever been shared. To quote John, “our conversion rates are very much in line with the objectives we set for the business and are meeting shareholder expectations, bringing millions of visitors per month into the Roomkey.com experience.” I really wish my shareholders were this naïve, happy and satisfied.

Another interesting example of cluelessness is this quote from their standard presentation: “Roomkey.com is receiving 7 times more visits than other recent start-up hotel websites like Hipmunk.com and Room77.com.” Comparing a pop-up catcher to awesome and innovative startups like Hipmunk and Room77  just highlights how clueless the brands still are.

Forgetting Something?

There is another fundamental problem with the site. The “beta” launch did not include any independent hotels. You can’t be a travel engine/online agent if you exclude an entire segment of the hotel industry. Launching with only the brands that paid for Room Key is going to come back to bite them, as they are now actively seeking to add independent hotels. Why won’t the independents want to join? Simple answer. Suspicion. How do independent hotels know that Marriott, Hilton and Wyndam hotels will not always be Room Key darlings? How can they expect to get fair representation? Not a smart move for an “innovative hotel search engine.”

Any Chance of Success?

Yes, there is always a way out of the darkness. A massive shift in policy needs to be implemented. The big brand shareholders need to come up with a better strategy. I would start here:

1. A better source of traffic than pop-up spamming .
2. Aggressive recruitment of independent hotels and resorts, especially in the international market.
3. Learning from successful OTA’s like Booking.com, Expedia.com, and also super-cool disrupters like Airbnb.com.

In today’s world of online travel, clinging to what’s comfortable is going to get you nowhere. It’s nice to see the brands trying to join the internet age, albeit a little late. But they’re still holding on to the edge of the pool. Understand why the market leaders are successful and build on that, or take it in a new direction. But you’ll never succeed using last year’s (last decade’s) online strategies.