Best Rate Guarantees Lures Travelers from Aggregator Sites

  |  June 20, 2005   |  Comments

Hotels want travelers to book at their own Web sites. Best rate guarantees and incentives entice users from aggregator sites.

Hotel brands want online consumers to book on their own branded Web sites instead of with aggregators. A study commissioned by Carlson Hotels Worldwide and conducted by Compete, Inc. compares users of both sites to identify how to shift consumers to brand sites.

Aggregator
Click to view full-size chart
Infrequent travelers prefer to book hotel accommodations through aggregator sites such as Hotels.com, Hotwire, Orbitz, Priceline and Travelocity, over brand sites such as Radisson Hotels and Resorts, which is owned by Carlson. This is particularly true during summer months when occasional travelers vacation. During the mid-year travel season, aggregator sites, which charge hotels up to 30 percent per reservation, book as many as 500,000 rooms, result in a share of $250 million across the top hotel brands.

"Over the past couple of years, there has been a concerted effort by hotel suppliers to wrest back their business from aggregator sites," said Gregory Saks, senior associate at Compete. "One of the most effective tools they have used is the Best Rate Guarantee, though it's worded differently among sites."

Saks says brand sites increase are increasing their market share year-over-year, but points out usage of aggregator sites creeps up during peak periods such as the summer season.

Frequent travelers utilize brand sites more when booking hotels, though less frequent travelers are slowly becoming aware of brand sites that offer incentives to book travel directly. Best rate guarantees are the biggest motivator to book directly through a brand site; 73 percent of consumers surveyed say a low rate guarantee would influence their decision to book travel through a hotel's site instead of an aggregator's.

Best Rate Guarantee Influence on Brand Sites (%)
No 27
Yes 73
Source: Compete Inc., 2005

Additional perks offered consumers who reserve accommodations through brand sites are found to have a significant impact on where to book travel. Fifty percent of consumers say complimentary room service and breakfast would be an influencer, and one-third say online check-in is significant. As many as 75 percent of consumers who use aggregator sites would purchase directly from a hotel brand site if they could receive the same price offered by the aggregator.

The biggest roadblock for brand sites is fewer than five percent of consumers who visit a hotel brand side interact with the content, and do not know about the best rate guarantee offered by many hotel operators. Only 28 percent of consumers who actually made a reservation on a brand site recalled seeing any promise of a guaranteed low price. Messaging is the top-line of defense, and can stretch beyond the Web. Saks stressed messaging across all channels, including placement in the physical hotel, works to reinforce a best rate guarantee, and other incentives for booking travel through the hotel's Web site.

ABOUT THE AUTHOR

Enid Burns

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