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Screenshot by Chris Matyszczyk/CNET
I think of the battle between hotels and Airbnb as Goliath facing David. Only with David played by Damien from “The Omen.”
The pressure on hotels to be ever cheaper is enormous. However, if they appear too cheap, they lose their cachet. Enter, therefore, hotel booking sites that can get you deals that might not always be made entirely public.
Into this tempestuous arena arrives Hotelpower.com. The folks behind this booking site insist that their deals are better than anyone else’s. Indeed, in launching today, they’re offering such phrases as “jaw dropping.”
Given that my jaw is permanently in a drooped position, I asked Randy Warren chairman of GTI, the company behind Hotelpower, about his alleged, well, hotel power. Why would hotels agree to their rooms being sold even more cheaply?
He explained: “Hotelpower is an alternative distribution channel. A lot of negotiation has already taken place behind the scenes in travel. The more people these sites can promote to, the more eyeballs they get. They know people shop around.”
Yes, hotel groups are like old men who marry eye candy. Loyalty is a slippery idea.
Are you ready for some technical stuff? I know you like it more than I do. So here goes.
Warren told me: “The cost of customer acquisition in general is high. Let’s take for example a Google pay-per-click campaign where someone like Expedia pays $1 per click in Google. It takes between 30-50 clicks to make a sale. It cost Expedia $30- $50 to make that sale. But they had a 20% margin on a $300/night hotel, so they still made $60 — minus the $30-50. When they work with an affiliate like Hotelpower they don’t pay for customer acquisition like they do on Google or other advertising. There is no risk and they are not putting out any $ to make the sale.”
I love the way businesspeople think and talk, don’t you?
You’ll be wondering that there must be a catch. I was, too. There is. Hotelpower requires a membership fee. It’s $49.99 a year. However, there is an introductory phase of 15 days for $4.95. What might stimulate such a charge?
Speaking of the hotels, Warren said: “They want to keep low rates in the private channel like a club, not in the public space as much.” One must keep up appearances.
Hotelpower does have another little perk. It’s called Lifestyle Cash. Unlike the sort of things you can buy on FarmVille, this sort of cash can be redeemed for glories such as spa treatments and the rampant extortion that posh hotels call breakfast. Think of it as un-nickeling and un-dimeing the hotel industry — at least a little.
Hotelpower promises savings on hotel rates of up to 70 percent. The proof will surely be in the booking.
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Still, Warren is like the peculiar private detective loner who knows where all the bodies are buried: “Most sites don’t list or tell you that you can get a better rate like AAA, senior, military, local promotional rate like all Orlando hotels on sale for locals. It’s too complicated and there’s not enough margin to show upfront. A lot of sites want you to take the price they give. Hotelpower plays the negotiating game and goes ‘several screens and questions in’ to tap every possible discount they can offer.”
So good luck, then, business travelers, vacationers and eloping lovers. Will Hotelpower make hotels slightly more competitive with Airbnb? Only time will reveal.
But you don’t get free spa treatments with Airbnb, do you? Or if you do, you shouldn’t.
