Red Lion Hotels & WestCoast Hotels Tackle Internet Rate Battle

24th Feb 2004

Red Lion Hotels & WestCoast Hotels has
taken on the issues of travel websites offering a confusing array of low
price claims. Specifically, starting March 1, 2004, new distribution
dashboard technology will allow WestCoast Hospitality Corporation, representing Red Lion Hotels and WestCoast Hotels in the U.S. and
Canada, to guarantee that their websites, and, offer the best online rate, or guests will receive
the richest compensation in the industry.
“We’re proclaiming, ‘We Promise or We Pay,’” said Barry Hughes, VP of
Marketing & Distribution for WestCoast Hospitality. “We’re so sure of our
rate integrity that we’re putting our money where our mouth is.”

While a number of other hotel chains have launched best rate guarantee
programs that match the rate if someone finds a lower price on a site other
than the brand website and offer a 10 to 20 percent discount to make amends,
the WestCoast Hospitality policy says “find a lower price and your stay is
free” plus the company will supply a voucher good for $100 toward a future
purchase at any Red Lion or West Coast Hotel. Even more importantly, the
Promise covers all the major third-party sites that allow consumers to
choose a hotel brand.

“Forrester Research says the average consumer visits six sites while
planning a trip and comScore Media Metrix says the big three travel sites
get 28 percent of all that traffic,” said Hughes. “Consumers value third
party sites for their shopping and comparison ability; but we know that
guests trust hotel brand sites for their depth, quality and accuracy of
information. With our ‘We Promise or We Pay’ guarantee our guests are
assured that when they come to or for that
service and depth, they can make us their last stop, because they are
getting the best rate, too.”

Distribution Dashboard Technology Lets Red Lion Throw Down Gauntlet

WestCoast Hospitality Corporation’s ability to offer consumers such a rich
promise is assured by the multi-million dollar upgrade in rooms inventory
distribution technology the company installed last year. “We have made our
rooms available to as many different channels as our guests can search,”
said Hughes. “In the past, we had to independently manage inventory across
nine different major channels, each of which might show our customer a
different rate for the same room on the same night. No one site was ever the
consistently lowest-priced offer. Now, thanks to our new distribution
dashboard technology and agreements we have negotiated with the third party
sites, we can offer value-oriented rates consistently and accurately,
anywhere and everywhere.”


Aside from promoting consumer confidence in their website, the technology
allows WestCoast Hospitality to throw down the gauntlet in the tournament
for online hotel room bookings, where the stakes are significant. While
third party travel vendor Orbitz is reporting a 35 percent gain in revenue
for the fourth quarter of 2003, and IAC (parent of Expedia, and
Hotwire) is reporting a 36 percent increase for the fourth quarter of 2003,
compared to 2002,  PricewaterhouseCooper estimates that such ‘merchant
sites’ diluted hotel revenues by $1.99 billion last year.

“Our best rate guarantee has a dual purpose,” said Hughes. “Not only do we
satisfy consumers who are seeking the best rate, we satisfy all of our
stakeholders, internal and external, that our promise means we won’t be
passive, allowing revenue to be diverted toward distribution costs. Our
third-party negotiations have indicated that these travel sites are more and
more inclined to work with us on this pricing issue in order to craft a
win-win relationship.”


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