Fewer Travel Bargains Online

Planners concerned about attendees booking outside negotiated deals with suppliers may soon have less to worry about: A growing number of hospitality companies are offering lowest rate guarantees on corporate Web sites, which means there are fewer deals to be found online, experts say.

The "best rate guarantee" strategy was introduced by hoteliers in order to minimize consumers' migration to third-party sites such as Expedia and Travelocity, and it appears to be working. A recent survey by J.D. Power and Associates of nearly 30,000 travelers found that a greater proportion of people are booking directly through hotels' Web sites than through third-party ones. "Across all categories, from luxury to budget, we found that people are more likely to book through the hotels' Web sites than through independent sites," says Linda Herneise, who manages the global travel practice for the Westlake Village, CA-based market research firm. The survey also found that guests who book through official hotel sites are significantly more satisfied with their stay, she adds.

InterContinental Hotels Group, the first hotel chain to offer a lowest Internet rate guarantee back in May 2002, saw an 80-percent increase in Internet revenue—double the industry average—one year after launching the program, says Carolyn Hergert, spokeswoman for the chain. Since then, Starwood, Marriott, Hilton, Wyndham, and Hyatt have all followed suit with similar guarantees.

But don't dismiss the third-party retailers just yet. "It's reasonable for suppliers to want to control pricing of their inventory, but from the consumer's perspective, would you rather visit a Web site that shows only one brand or six different brands?" asks Peter Yesawich, chairman and CEO of Orlando-based market research firm Yesawich, Pepperdine, Brown & Russell.

And Yesawich predicts that consumers will continue to find air-travel deals online because suppliers are "desperate" to unload distressed inventory. At presstime, Continental was the only major carrier to offer an Internet price guarantee, but only for a limited time and on certain routes.