The perception of many travelers is that the best hotel prices are to be found at the big online travel agencies.
The hotel chains have recently been attempting to alter this perception by offering lower prices when you book via their own websites. This usually requires membership in a loyalty program but they have streamlined sign-up so that you can become a member during the checkout process.
This channel shift is really important for the hotels because they lose so much in commission to the OTAs, not to mention market relevance and a direct relationship with the customer.
Room Key is a joint venture between six of the largest hotel chains in the world and has unique access to these lower direct rates.
We have just launched a new product called Scout, a Chrome browser extension that activates whenever you view a hotel at major OTAs.
Scout looks at the lowest rate being advertised by the OTA and then searches in the background to see if it can find a lower direct rate. If it does, it automatically displays a notification along with a button that takes the user to the hotel's own site to book the lower rate and get additional perks of booking direct (e.g. points, free wifi).
For now the hotels Scout works with are mostly limited to brands belonging to larger chains (Marriott, Hyatt, Wyndham, Choice, IHG). E.g. try looking at a Holiday Inn on Expedia and you're very likely to see a Scout notification.
The OTAs are currently limited to the major players (Expedia, Orbitz, Priceline, Booking.com, Hotels.com, Travelocity) but we hope to grow this list to include metasearch engines (Kayak, Trivago, etc) in the near future. We also hope to introduce the extension on other browsers.
We do make money from booking commissions, but our commissions are much lower than those of the OTAs and more importantly go to a company that is trusted by and founded by the hotel industry.
Room Key's raison d'être is to lower the cost of hotel distribution for the hotel industry and to be an advocate for the traveler in what is a very confusing marketplace for the average consumer. Price confidence is severely lacking hence why consumers are often searching up to 6 sites before making a booking decision.
Very few people understand how the online hotel industry works and we would like to start to cast some light on that.
A rogue employee spying on people (happens a lot, we read), or the company accidentally saving your data and then being hacked, or any number of other potential privacy issues... probably isn't worth the small amount of money you might be able to save sometimes. At least for me it's not.
On the other hand, all but the most careful internet users are probably giving away nearly all of their personal information and records of their activities anyway, so maybe it's a moot point.
The big chains are fighting to stay relevant against the channels (Expedia, Priceline, Airbnb). Franchisees don't want to pay 6-8% of revenue to a chain and then another 10-15% to a channel. They're going to pick one or the other, and right now, my bet is on the OTA or "online travel agency" aka Expedia.
This battle is existential for the chains (they're out of business if they lose). They need to be seen by member properties as "worth it" or the properties will "de-flag" and go independent, getting bookings directly from the channels. They're trying every play in the book, from merging to get more bargaining power (Marriott's purchase of Starwood), creating their own tech stack to drive direct bookings for member hotels (this), and trying every loyalty trick known to man.
In the long run the current situation isn't stable. Franchisees aren't going to pay for both a channel and a chain. The chains couldn't get their shit together enough to bring the individual properties bookings (what you're supposedly paying that 6% of revenue for) and they're going the way of the dodo. That's what's really going on here.
Roomkey et al is the chain-funded effort to fight back against Expedia, etc. They're going to lose unless they get serious about fighting Expedia and co. head-on. The problem is, they're fighting a battle where Expedia already has a strong, fortified position and it's going on be on their (Expedia's) terms. I don't see how this ends well for the chains.
Roomkey is just another middleman alternative to Expedia.
At the point where a customer is searching on Expedia or booking.com, you've lost. These sites have aggressive reward programs and are tuned machines to get people to buy.
The better approach is actual property-level differentiation that makes people want to stay at a particular hotel. If your customer sees hotel inventory as essentially fungible, which is what most of the undifferentiated inventory on booking/expedia is, they're going to pay commodity prices for it.
The chains need to step up and market directly to consumers, and GIVE ME A REASON TO LIKE THEM. Right now it's all sort of meh. Hilton, Hyatt, Rodeway, whatever, I just don't care, give me the lowest price and I'm there.
Do these chains have some kind of written agreement with the websites where they are NOT allowed to undercut those prices, ever?
Hotels play all sorts of games with this, including throwing in free stuff if you book direct ("it's the same rate") and doing "non-advertised" rates through loyalty and reward programs.
If you can't book directly with the hotel, it's very likely they don't have technology sophisticated enough to do a direct booking. You'd be surprised how bad hotel tech is. And the thing is, none of the independents want to spend anything to improve the situation. It's honestly madness.
Disclosure: used to work for an OTA.
It depends on where (which country) and when.
In Europe there were contracts with that "no lower rate" provisions, which have been (in some countries) deemed illegal.
To give you some loose data points, that was 2015 for France and Germany, August 2017 for Italy, here is a map:
The way that hotel chains can undercut the OTA price is via their loyalty programs. If you sign up as a member then you can very often receive a lower rate. All the major chains have been running campaigns around these loyalty rates recently and one study has suggested it may be having an impact [https://www.kalibrilabs.com/press-1/2017/10/26/new-study-fro...].
Due to our unique relationship with the hotel chains, Room Key (both our .com site and Scout) is the only hotel search engine that has access to these loyalty rates across multiple chains. This is how Scout is able to notify the user of a better rate in so many cases for the big chains. We'd love to expand to have more hotels join us and allow us access to their loyalty rates as well.
We've found through our research and user testing that OTA users fall broadly into two camps. First, those who believe, rightly or wrongly, that the OTA rate is always going to be cheaper. Second, those who use OTAs as a search engine to find the right hotel but then go and manually compare the OTA rate vs the rates available directly on the hotel's own site.
Usually the direct deal is better when you consider the entire package - lower loyalty rate + easier cancellation + points + free wifi etc. Being the customer of the hotel who has an interest in the quality of your stay vs a third party does count for something. I believe we'll start to see that count for more as time goes on.
You mention that the big OTAs seek (online only btw!) price parity. But you don't mention that the largest of the OTAs hasn't enforced it much for many years if ever (source: I wrote code for price parity analysis for them back in 2011). You also conveniently omit that MFNs have been tremendously weakened or outlawed in much of the EU.
I'd also like to challenge the notion that direct bookings are always better for you as a traveler. Hotels do play funny games with customers (eg overbookings) all the time (source: family from the hotel industry and I worked for an OTA where you could experience a day in the shoes of a customer service agent). Booking through large OTAs had two possible (albeit not guaranteed) advantages. The OTAs generally consider the traveler their customer. Not the hotel. So if there is a conflict ("I'm sorry - it looks like I dont have your reservation on file..."), they will put their considerable influence behind the shunned traveler. The fact that online ratings have significant impact on the rate of bookings that hotels get also means that they have an additional incentive to not mistreat the customers that can submit these ratings on the large OTAs.
Finally, let me make one more argument in favor of OTAs. I'll claim that consumers WANT to be able to efficiently search for accommodation that matches their criteria incl budget. I sure do! And it just makes sense: do you all remember the times when you had to call lots of hotels before you finally found that one that had a free room? Travel sucked a great deal more. And it was a lot more a matter of luck whether you'd hit a good one. So people WILL use modern technology to search places to stay. Without the OTAs, the search engines will fill that gap. And lo and behold: a very, very large percentage of the commission that OTAs charge goes to online performance marketing. (Some of those numbers are public so I could likely quote, but I don't want to accidentally disclose anything I contractually mustn't, so please look them up in the filings.)
Disclosure: used to work for an OTA, now for Google (but not anywhere near the travel or ads products).
However, hotels can offer lower price via their own membership program
So no, I cannot 'see lower direct hotel rates as I browse online travel agents'.
The marketing messaging is completely disjointed from what the product actually does.
I can assure you that the extension collects only what it needs to do in order to function.
I don't know if/how is it compatible with Firefox and other browsers…