Consumer reliance on booking hotel stays through discount Web sites like Expedia and Hotels.com has major brand hoteliers scrambling to promote their own sites.
The travel slump of the past three years led many hotels to welcome the assistance of these third-party sites, which effectively allow customers to book what would otherwise be empty rooms on short notice for low cost.
The tradeoff was that the discount sites exacted heavy commissions and even took control over some rooms.
As business travel has begun to improve, the hotels are looking for a way out.
Most of the major brands have already tried to increase the appeal of their own sites by guaranteeing the lowest rates and discontinuing loyalty perks for stays booked at third-party sites.
Soon, InterContinental Hotels Group will become the latest to join that trend. On April 15, stays booked through most third-party Web sites and pre-paid channels will no longer award Priority Club points, airline miles or other frequency credits. Priceline.com, Expedia.com, Hotwire.com and Hotels.com all fit this description.
At a recent industry conference, Wyndham International Inc. Chief Executive and Chairman Fred Kleisner told Reuters that hotels had become overly dependent on using the Web to drum up business and were only now coming to grips with the problems that entailed.
“I think the entire lodging industry has been going through a 12-step program on substance abuse since the middle of last year,” Kleisner said.
PricewaterhouseCoopers estimates that the Web generated an extra $715 million in hotel business in 2003. But increased price competition spurred by the Web cost hoteliers $2 billion in potential revenue, meaning the Web on the whole cost hoteliers about $1.3 billion in revenue.