The founders of hotels.com, Bob Deiner and David Litman, today announced the launch of getaroom.com, a new hotel booking site which aims to offer travel consumers the benefits of hotel discounts offered by opaque travel sites, but in a far more transparent process.  Getaroom.com promises not only to be a boon for travel consumers, but travel affiliates as well, as a very generous travel affiliate program appears to be a major component of the site’s go-to-market strategy.  TravelDividends’ thinks that getaroom.com’s travel affiliate strategy will help propel the company to success.

Overview of getaroom.com

On the surface, getaroom.com has the look and feel of just about every other hotel portal / aggregator / bedbank booking site; the site features hundreds of hotels and resorts, and provides a thorough capsule description of each, including property narratives, photos, maps, etc.  Additionally, in order for the user to make the best informed decision when gauging which property is best suited to his or her needs, the site provides shoppers with the ability to compare properties side-by-side (among the criteria shoppers can select from include ‘lowest price’, ‘star rating’ or ‘guest satisfaction’). Other site features include booking capabilities for airfare and popular attractions in cities worldwide.

However, in our review of the site, TravelDividends found the database of hotels highlighted in the Red Hot Deals’ section to be the most alluring of all features, as it’s here that the traveler can get a ‘first glimpse’ at the most deeply discounted rates at participating hotel properties. According to getaroom.com, the discounts presented in this section often are 15% to 40% lower than comparable rates offered for the same property by other websites, each of which is categorized under city location.

While the ‘first glimpse’ discount is engaging and appealing, to get at the deeply discounted rates, registered users must call (or in our experience, are prompted by a pop-up to call) the getaroom.com 800 telephone number, where a res agent will apprise them of non-published discounted offers that are priced at an additional 10% – 50% below the published rates shown for certain select hotels on the getaroom website.

Business Model

It is this feature which, in the Company’s press release, founders Deiner and Litman make clear that getaroom.com is using in an attempt to ultimately shatter the business models of opaque travel sites like Hotwire and Priceline.  For unlike the aforementioned opaque sites and others like them, getaroom.com provides the travel consumer with full disclosure about all aspects of the reservation at time of booking, including the hotel name and exact location.

By requiring the shopper to call rather than process the transaction online, getaroom.com assures that the traveler can make an informed decision by first getting to know both the price and the property before committing to completing transaction, while at the same time safeguards the hotel merchant’s pricing power against complete erosion.

“Getaroom.com takes the guesswork and mystery out of booking a hotel room for the lowest rates,” Deiner is quoted in the press release, adding that “Now travelers can book accommodations knowing they are getting the absolute best rate with full disclosure upfront on where they will be staying.  No more worrying about whether the hotel is in the right location or even if it’s a property that meets all their criteria and standards.  Our clients will always know in advance which property they are booking, even when they book a room with our low non-published rates.”

Litman’s remarks focused on the wealth of experience and expertise that he, Deiner and their team brings to the venture, and how value and service lie at the heart of their new enterprise. “We are working very hard to ensure our guests receive the best values for their travel dollars.  Our expertise in the hotel industry is unparalleled,” said Litman.  ”Bob and I literally launched the online hotel booking industry back in 1995 with hotels.com, and its predecessor Hotel Reservations Network,” Litman added,  noting that their venture is leveraging that experience and their entrepreneurial spirit to enable “…our clients to get the best rates, the best service and the best information.”

Additionally, Litman underscored their commitment to customer service: “Getaroom.com offers travelers an enhanced customer experience. While most companies continue to outsource customer support getaroom.com’s call center is based in Dallas. We are providing jobs right here in the U.S. and giving our clients more personalized customer-oriented services.”

From TravelDividends’ perspective, that is reason enough to wish Deiner and Litman much success in their new venture, as their decision on customer service reverses (at least in this one instance) the ‘gutting-out’ of the travel industry by virtue of loss of tens of thousands of jobs to outsourcing since the mid-1990s.

Travel Affiliate Program

The other great aspect of getaroom.com’s business model is that they will be offering a travel affiliate program. According to the website, the affiliate program is currently still under design, and “Coming Soon.”   However, the salient aspects of the proposed program has been posted, of which include the following elements:

  • Travel affiliates can earn up to 10% commission or CPA up to $20 on all consumed reservations
  • Our products offer a high average order value of $250.00
  • Promote special deals and savings offers to enhance the travel affiliate’s conversions
  • Professional affiliate experts to personally assist travel affiliates
  • Affiliates can choose from many travel destinations
  • Data feeds available
  • State-of-the-art reporting

The commission earning potential of 10% / $20 is rather rich, considering the commission levels that opaque travel sites and OTAs pay their travel affiliates, e.g., Hotwire and Priceline pay 2% and 3%-5%-7% respectively, while OTAs like Expedia offers 3% -5.5/6% on net hotel booking value, Travelocity 3%-5%, and Orbitz pays on a transaction fee of $6 (retail hotel) or $12 (merchant hotel).

More information about getaroom.com’s travel affiliate program can be found here. We also think that should the net average booking be in the order of $250 as claimed, travel affiliates would find that including getaroom.com in their product portfolio could return some handsome dividends.

Currently, getaroom.com has contracted with hundreds of national chain and independent boutique properties in the U.S., and thus limits its accommodations to just the U.S. market. Plans are in place to grow both the lodging and geographic network as their business plan is rolled-out.

TravelDividends thinks that while the online hotel aggregator / bed bank space is already highly contested, given the transparency value proposition in getaroom.com’s business model, they have a very good chance of succeeding, particularly if the economy remains in the doldrums through 2010, as many economists are prognosticating.  In any event, we wish Bob Deiner, David Litman and their team much success with their new venture.

What do you think of getaroom.com? Do you think their model will work? We appreciate your sharing your thoughts and opinions with us and our readers.  Kindly forward your comment to us via email, or leave us a comment; we’ll make sure to respond to you.  Thanks!

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