Online hotel savings evaporate

Wednesday, 15 May, 2002 0

The savings to be made from booking a hotel online have fallen dramatically according to a survey by KPMG.

The findings, released today (May 15), show that corporate customers have seen the average online saving fall from £12.50 in 2001 to just £3.75 in 2002 as hotels bring in greater price consistency across different booking channels.

In total 45% of hotels surveyed for the Hotels and the Internet 2002 report had a consistent pricing policy across their websites, central reservation systems and direct booking channels compared to just 18% a year ago.

Nick Pattie, director of hospitality at KPMG team said: “The ‘wow’ factor of booking online is diminishing. The industry must analyse if managing online bookings brings any cost savings and whether it can capitalise any revenue generation opportunities; or if managing numerous booking channels, be it online or offline, is eroding potential e-savings for both the industry and consumers alike.”

He added: “As the internet matures, hotels will have to continue to find innovative ways of appealing to the traveller online. One hotel chain [Six Continents Hotels], for example, is offering to give a 10% reduction on the price of its internet room rate if a cheaper rate can be found elsewhere on the internet. Other hotel chains may jump on the band wagon and replicate these offers to vie for business.”

KPMG surveyed eleven major international hotel brands from the viewpoint of an independent corporate traveller. The results were compiled by examining the price differences when booking mid-week either via the hotel website, calling the hotel direct or via its central reservations system.

*Six Continents Hotels has introduced a Lowest Rate Internet Guarantee which guarantees that room rates on the company’s websites will be the lowest for its hotels anywhere on the web. If a lower price is found for the same room elsewhere on the Internet, the company promises to match it and take a further 10% off.

Damian Hinds, vice president commercial, Six Continents Hotels said: “This is about giving our guests confidence that they can come to us direct, cutting out the need to shop around – to ensure booking via the Internet is faster as well as cheaper.”

See our previous stories:

01 May 2002: Second hotel report shows downside of early Easter
30 Apr 2002: Early Easter causes London hotel recovery to slip back
17 Apr 2002: Research says online agents have “hiked prices”