It’s highly unusual for competitors to come together with a common problem but with Roomkey, that’s exactly what fierce competitors Choice Hotels International, Hilton Worldwide, Hyatt Hotels Corporation, InterContinental Hotels Group, Marriott International, and Wyndham Worldwide have done.
Roomkey company owners all compete very rigorously in the market to win customers, but the digital age had brought a shared problem – customer intermediation. That was problem number one, which lead to problem number two—eroding margins. These third parties charge hotels a commission for selling their rooms, which led to eroding profit margins.
The hotels knew they needed do something collectively in order to compete. They understood that unless they did something collectively, they would be unable to win. That was the genesis of coming together and developing Roomkey.
Here, brandchannel talks to Roomkey CEO, Steve Sickel.
You spent a lot of time talking about the role Roomkey plays in the customer’s experience and in particular where you hand-off to a particular hotel. How do you think about Roomkey’s role in the customer experience?
We very deliberately involve ourselves in certain parts of the customer experience and very deliberately remove ourselves from other parts of the experience. From the outside looking in, it may look odd because people might think, “here you are trying to cultivate a customer relationship, why aren’t you taking that further?” And the reality is, we want to focus squarely on that middle to bottom part of the funnel, mainly the shopping experience. Once the customer has shopped all of the choices in a particular market on our site and selects a particular hotel to make a reservation, we then very deliberately pass that customer off to our hotel partners because that’s the experience that both the hotels want and frankly, the customers want. The hotels can then start to build that customer relationship, prepare for the guest’s arrival, and provide the guest with a great experience. And the guest can have the confidence that their reservation and customer data are being handled safely and directly by the hotel company itself.
A recent focus group study showed a majority of customers using third parties feel a level of angst and discomfort using them which is driven by a variety of factors, one of the biggest being reservation integrity. They want to book directly with the supplier to ensure their reservation is not at risk. So, Roomkey gives users all the advantages of shopping through a third party in terms of having a multi-brand one-stop-shopping environment and the confidence and benefits of booking directly with the hotel. We’ve pulled the best of both worlds into a single value offering with Roomkey.
We are living a new era for lodging. The sharing economy has transformed travel and the hospitality industry. Do you see Roomkey stepping into this division?
It’s an interesting time in the hotel industry. You see the emergence of crowdsource lodging like AirBnb and others like it. But we’re not necessarily stepping into that segment because we see ourselves as a pseudo-ingredient brand for our hotel partners. We are complementary to the individual hotel brand’s customer experience, so we’re not getting into that segment and won’t get into it unless hotel companies decide that that’s a part of their forward strategy. If and when they do, then we will follow and figure out how to support that and again remain in this complementary role in their customers’ experience.
Doing right by the user is an important strategy to maintain relevance. You have a principle-based approach to building your position with values like truth and transparency. How you are working to maintain relevance for your brand in this age?
We now have a positioning which customers have said over and over again they are looking for but can’t find among today’s online travel providers. Customers are really searching for a third party travel site they can trust, one whose motivations are not profit-driven but rather are grounded in a true sense of assistance – a travel site that takes a complicated shopping process, laced with a lot of hard-to-understand industry jargon, and turns it into one that is easy to understand and very transparent.
How is speed of the marketplace helping you make choices on areas to focus on versus the areas not to focus on?
For most of the aspects of the business for which we have more discretion, we can move quickly, and we can react quickly. But because we’re owned by companies that are competitors, it means that for those other aspects that are more complex, have more market-risk and impact, or have a material reliance on hotels, then we have the weight of big corporate bureaucracies to manage. And it’s not just one of them—it’s six. So, speed is a very delicate thing to manage, despite the virtue of governance in this business.
That said, the new positioning that we’ve developed in working with Interbrand is one that I really have a lot of excitement for. The fundamentals that Roomkey is now grounded in are time tested. They will withstand market changes, competitive movements, and in some respects, changes in societal norms. Truth, honesty, and transparency tethered to a sense of serving others, even when it’s not good for us—those are everlasting. You can chase your tail trying to find the latest technological advantage, but our mission is ultimately grounded in something bigger than that. It’s what customers want.
Can you speak of one or two examples of how being a customer centric organization has helped you improve the customer experience?
One of the big mantras we have at Roomkey is a true sense of serving. For example, the way that we present our hotels for a customer’s search is done strictly by what we think is best for the user. We don’t advantage any brand or any particular hotel. We don’t allow hotels to buy “sponsored listings” to artificially raise their position in the hotel display. We don’t do any gimmicky or misleading messaging to try to prematurely drive the sale. Could that deceptive messaging help our conversion? Yes. Could we make a lot more money by selling sponsored listings? Absolutely. But are those the right decisions for our customers? The answer is no. We have made a deliberate decision to sacrifice higher revenues for the sake of providing an honest, transparent customer experience so that our customers make the best decision for them, not for us. It’s that kind of commitment and dedication to do what is right for the customer that really drives all of our decisions.
Customers tell us they love what we’re doing at Roomkey because they see us as a trustful traveling companion that will help them wade through the difficulty to make the right decision. So, we feel we are on the right path but it’s still early days and that’s our biggest challenge. Getting the word out there about who we are and what we do, and as importantly, what we don’t do.