Hotwire’s president talks about so-called ‘opaque’ travel sites
Clem Bason is the president of Hotwire.com, the discount travel Web site. I asked him about the outlook for bargains in the second half of the summer, and to address some of the consumer complaints about so-called “opaque” travel sites.
Bason: It’s truly an amazing time to travel if you’re a bargain-hunter. Hotel occupancy rates have plummeted along with the economy - more than 55 percent of the hotel rooms across the US were empty on any given night in July. And this translates into deep discounts for consumers. Opaque rates in New York City have dropped 32 percent. San Diego is down by 29 percent and Orlando is off by 22 percent compared to last summer, just to name a few.
Airfares are a similar story. Over the Fourth of July weekend, our bookings were off by 25 percent versus last year. That’s even with retail prices that were down by 10 percent.
It’s a very different story for rental cars, however. Published rates are 15 percent more expensive on average this summer. Why? There’s less inventory because cash-strapped vendors aren’t adding to their fleets.
Q: What do you expect to see during the second half of the summer? Will the bargains continue?
Bason: Hotels will continue to struggle with occupancy and the deals should remain great, especially in hard hit markets like Las Vegas, Arizona and Florida. We’ll also continue to see lower airfares through summer’s end, but I don’t expect these prices to last. With capacity cuts planned for the fall, now is a good time to book.
After spiking in July (above $40 on average), the car rental market will retreat in late August, then fall back to more normalized levels in September. The good news is that opaque inventory should still stay strong through that time and beyond.
Q: On average, how much can people save when they work with an opaque site like Hotwire?
Bason: It’s really no exaggeration when we say you can find four-star hotels at two-star prices at Hotwire. Our hotel savings go as high as 55 percent off other leading travel sites.
People can also trust us for deep discounts on airfares, with up to 35 percent off last-minute Hot Rate airfares. And of course, we have no booking fees.
Rental cars are available on our site from $13.95 per day, and we often represent some of the lowest going rates on the market.
Q: Can you briefly describe what’s happening behind the scenes when I’m making a reservation through a site like Hotwire? How are you deciding which airline, car rental company, or hotel I’m going to be using?
Bason: Hotwire has relationships with brand-name hotels, airlines, and rental car companies. When they have unsold inventory, they use us to fill it — so our customers can buy at substantial discounts. The inventory provided on our site is dependent upon suppliers, and we have partners that number in the thousands.
The good news is that the final decision on which supplier you’ll be using is really up to you. We empower customers by providing as much information as possible up front, so they can be sure of quality.
By selecting your preferences from a robust list of options such as location, price, star rating, car type, route, etc, you’re narrowing down the inventory. Based on that information, we generate the lowest price options and present them for you to browse and select. By providing the name of the specific supplier after the booking, customers get access to big-time savings.
Q: I’ve been getting a lot of questions about hotel reviews. Can you explain how you come up with your ratings?
Bason: Our star ratings take into consideration the ratings of three of the top online travel agencies. We’re constantly monitoring these external sites, so any changes will be reflected quickly. We then take the considerable post-stay survey data we have from our own customers, and adjust the rating down - never up - if needed.
For example, we will reduce a hotel’s rating by 0.5 stars if it doesn’t score well in satisfaction ratings. But customers should know that our satisfaction is very high, so this happens very infrequently.
Q: Some users of opaque sites such as yours have alleged that the star rating systems are being manipulated in order to increase revenues. Is that even possible?
Bason: In the U.S. there is no industry standard for what must be included to obtain a particular star rating, and that can lead to confusion. So it’s possible. But definitely not at Hotwire.
Our system is specifically designed to avoid inflated ratings because we use a blended score from other non-opaque sites, and only move our ratings down from there based on customer feedback.
In fact, 70 percent of our customers agree with the ratings on our site, with the rest split between thinking we should move them higher or lower. We get over 2,500 completed surveys a day, so we feel really good about those numbers.
Q: Another common question I get from readers has to do with resort fees. Your terms say that a hotel guest is responsible for these mandatory charges, yet they can’t choose the hotel when they book through Hotwire. What happens when someone is assigned a hotel, prepays for it, and then has a $15 resort fee added to the bill?
Bason: Many resort-style properties offer increased levels of service, and in turn, they add on the extra fee. We try to disclose those properties that consider themselves “resorts” right up front, both in the list of amenities, and in the “Know before you go” section of each property’s description page. Both are provided pre-booking, and note that a resort fee may be charged. So hopefully, customers are choosing these properties because they’re getting these extra amenities, and won’t be surprised to see resort fees.
Q: What kind of processes do you have in place to make sure a reservation isn’t lost, especially by a hotel?
Bason: Hotwire has system-level connections with major hotels to pull real-time rates and inventory, and we deliver our reservations directly into each hotel’s Property Management System. We never confirm a guest booking until we receive a response from the hotel’s system with a confirmation number.
Hotels not on these systems - a very small percentage - are notified via email and fax.
As an extra safeguard, Hotwire also sends Daily Arrival Reports to all hotels that have Hotwire guests set to arrive on any given day.
All of our airline and rental car reservations are electronically transferred in real-time to our partners’ systems and confirmations come back to us the same way.
Q: I notice that unlike some of the other online travel agencies, you don’t have any warranties or promises. Other than what you would read in the terms and conditions, what can travelers reasonably expect when they buy through a site like Hotwire?
Bason: All of our customers should expect first-class service from us, and to receive exactly what they booked on Hotwire.com.
We’re known for low prices you can’t find anywhere else, and when it comes to our hotel rooms, we guarantee it with our double the difference promise. Our hotel customers should accept nothing less than a quality experience regardless of the hotel’s star rating. That’s our promise.
For opaque airfares and rental car deals, we negotiate some of the lowest published rates in the marketplace. If we don’t have a competitive opaque rate, we show the lowest set of published rates available instead, clearly noting them. We also openly encourage our customers to shop around via our comparison links.
We feel very strongly about delivering value to customers, and they seem to agree. We’ve won the J.D. Power and Associates “Highest Customer Satisfaction” Award three years in a row.
Q: I’ve spoken with hotel owners, who say they often set aside some of the most undesirable rooms - near the elevator or under the restaurant - for people who buy a room through a discount or opaque Web sites, such as yours. Do you have anything in your contractual agreements with hotels and other travel companies that would prevent them from doing this?
Bason: It’s important to know that anyone walking in off the street could end up in a room next to an elevator. If the hotel has high occupancy that night, that may be all that’s left. We’ve all had that experience. As a result, we can’t tell a property to exclude those rooms from the inventory they provide to our customers. But honestly, it just wouldn’t make sense for a manager to discriminate against our customers.
First, hotels often get first-time guests through Hotwire. This is a chance to impress them with their property, and to potentially keep that customer for life through a direct relationship, paying retail rates and not working through Hotwire.
Second, if Hotwire guests are unsatisfied with their stays - and they would be if they were consistently put in lower quality rooms - we get that feedback through our post-stay surveys. Enough negative surveys will lower a hotel’s star rating, with consequences to pricing and booking levels, and no property manager wants that.