Why Expedia and Priceline Don't Want You to Hear About RoomKey.com


Roomkey.comA new travel website launched earlier this week.

RoomKey.com will scour through the available hotel rooms across several lodging chains, offering up the best deals. In a world where Expedia (EXPE), Travelocity, Orbitz Worldwide (OWW), and priceline.com (PCLN) do essentially the same thing, why should Room Key stand out?

Well, Room Key is actually a joint venture including six of the country's largest hoteliers. Founded by Choice Hotels (CHH), Hilton Worldwide, Hyatt (H), InterContinental Hotels Group (IHG), Marriott (MAR) and Wyndham (WYN), Room Key is starting off targeting the U.S. travel market, but overseas expansion is inevitable.

It's easy to see why hotels want to cut out the middlemen. Instead of doling out commissions every time that someone books an overnight stay through a traditional travel portal, Room Key's flexible search feature links directly to each hotel's booking page.

First Music, Then TV, now Hotels

Corporate giants often have a hard time trumping hungry upstarts. It happened in the music industry a decade ago, when the major labels split into two camps to form MusicNet and Pressplay. Both online music services quickly faltered.

Things have panned out better for television production studios. Hulu -- bankrolled by three of the major networks -- has been a smashing success streaming fresh television shows to audiences on demand.

It remains to be seen if Room Key will be the next MusicNet or Hulu. The consortium of lodging giants is already talking to other hotel chains and independent operators to make its destination as complete as possible. But it will probably never have everybody on board.

Room key

Starwood (HOT), the parent company of Sheraton and Westin, is telling The Wall Street Journal that it passed on the opportunity to participate after studying the joint venture for several months.

However, having a trusted source that feeds right into the hotel booking engines seems like a good idea in theory.

No Vacancy

Things can always backfire on the participating leisure companies. It's quite possible that traffic to their own landing pages may suffer.

If you're part of the Hilton HHonors reward club and typically begin searching for a place to stay at Hilton.com to see the available Hilton, Hampton Inn, and Embassy Suites in the area, why not go to RoomKey.com instead? Sure, you may miss out on an opportunity to earn points or collect your member perks, but what if there's a comparable room being offered by a rival at half the price?

Instead of counting on having a captive audience through their proprietary websites, there might be some competitive jockeying for position between the founders.

It will still be worth it in the end. If consumers are hungry for an assortment of options wouldn't they eventually wind up at a travel portal or one of the popular aggregators including Kayak? Hotel chains have their best chance ever to control the booking experience. They better not blow it.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. Motley Fool newsletter services have recommended buying shares of priceline.com.

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I strongly urge readers who read through Rose's comment to read this other article. Apparaently she's a professional complainer:

June 27 2012 at 7:23 PM Report abuse rate up rate down Reply

Seriously Rose? EXPEDIA is acting dangerously for women traveling alone? How about you OWN YOUR OWN STORY and realize that YOU put yourself in danger ... nobody else has a responsiblity to see to your safety. You got where you were supposed to go and NOTHING HAPPENED to you other than that your racism caused you some irrational fear. Quit whining all over the Internet about your NON-story.

June 27 2012 at 10:54 AM Report abuse rate up rate down Reply
Rose Caiazzo

Great read about RoomKey.com - I'll use them instead of Expedia next time! I was wondering if anyone had any thoughts on my story . . . It would be great if I can share this, as I really feel Expedia is acting dangerously for women traveling alone.

I visited the Dominican Republic (Puerto Plata), traveling from Miami International Airport in January. I was very excited to book my trip through Expedia, and trusted the company to take care of my airport transfers. As a young woman traveling alone, these transfers were very important for me to book through a trusted company, as I had heard about many problems the country has with rapes, muggings and overall bad things happening with tourists visiting the area.

I immediately called Expedia to report what had happened with my transfer to the airport, leaving the Dominican from the Riu Mambo Resort. I can summarize my situation for you. Out of nowhere, the driver (who spoke no english) stopped on the side of the road in the middle of a busy place with mopeds and people all around (without informing me that he would be doing so) and motioned for me to get out of the van and go to a different mini bus parked in front of his van. The driver for the new van was twice the size of me, was not wearing a “Blue” shirt & the mini-bus had closed curtains. I saw that there was another dark-colored man waiting inside the mini-bus. I really thought I was going to get onto that bus & go to my death at that moment & wasn't sure of I should scream, run or what. I was basically filled with anxiety & complied with what they said to do. I swear I almost ran I was so scared, but then I thought that would be a bad idea too.

In the end, the driver did take me to the airport, but it was a very frightening experience to not know if I was going to be at the airport, or taken someplace else to die in an unmarked vehicle. What these men did was definitely against the rules.

When I reported this to Expedia, they told me that the Riu Mambo said the van had technical difficulties & nothing more than the $30 transfer could be refunded. Allow me to be clear here – there were NO TECHNICAL DIFFICULTIES with this van. These men were running a scheme, probably to make more money by splitting gas fees. Then Expedia told me that because there were van troubles, they could not refund anything more because The Riu Mambo (the hotel that lied) said the van had mechanical troubles.

I don’t even know if any money amount would ever really be appropriate for my LIFE or change my mind about Expedia’s extra services, however – it wasn't right for the Riu Mambo to report something inappropriate as "there were technical difficulties with the van" when they weren't there & don't even know this is true!

In my opinion, Expedia and The Riu Mambo is acting dangerously by putting other women traveling alone in this position! What do you think?

May 09 2012 at 3:32 PM Report abuse -1 rate up rate down Reply
James Arnold

It will be interesting to see if RoomKey will be successful in cutting the other OTA's out of the market.

It seems like there is suddenly a wealth of hotel search engine growth and innovation. HipMunk are making a funky UI, and HotelSweep are going direct like RoomKey but using information extraction to cover all hotels not just partners.

For now, I'll stick with using price comparison sites.

January 31 2012 at 11:40 AM Report abuse rate up rate down Reply
Adriana Jones

Getting the technological edge in the hotel industry is so important! Here's a blog with some great insight on how to do it http://bit.ly/ytxwR0. I think that room key is going to be an incredible system, can't wait to see what happens.

January 15 2012 at 6:39 PM Report abuse rate up rate down Reply

So Biden sits among too many empty seats on Obama's speech for jobs, HMM! The jig is up mr. pres you did not deserve the job you have. You have as the Dems mr pres failed the BLACK community. More taxes and regulations why not just shhot your own kind. Where are the jobs when no one can afford to "HIRE?" "Stupid is as Stupid does," how dare you professor idiot tells us to go after the wealthy! More government to run USA into the ground then fundamentally change into Europe. Why didn't I think of that? Progressive-Liberals go back to Europe or wherever you came form "WE don'T want you here!" Can I be more specific Hollyweird, Leftists, Union Bosses oh my. My parents were Democrats, Reagan too so is it a wonder we true Americans want "CHANGE?" Yes, but back to a REPUBLIC less government more opportunities more wealth trickled down to the poorest of the poor and we will raise all boats. People ya have to VOTE these BUMS out of office and let us get our Economy back on track and start to do right by our fellow Americans, "OKAY?"

January 13 2012 at 2:44 PM Report abuse rate up rate down Reply
2 replies to Lazarko's comment

Boy, you're watching too much Fox News. You're NOT a true American. It appears you hate everything, just like Hannity, O'Reilly, Limbaugh and all the other fathead right-wingers. Be a true American and stop letting these sorry pinheads rule your life.

January 13 2012 at 4:18 PM Report abuse -1 rate up rate down Reply

What exactly does that have to do with a hotel booking website? Of course, you come across as ignorant even without posting your rant in an inappropriate venue. If you wish to be taken serious, at least make an effort to write complete, concise sentences using some semblance of proper punctuation and grammar.....

January 13 2012 at 4:25 PM Report abuse rate up rate down Reply