The concept of Listing Syndication is just as prevalent in marketing hotel rooms as it is with real estate inventory today. There are many syndication sites like TripAdvisor, Expedia, Hotwire and hundreds more. In theory, these sites were set up, in theory to HELP hotels, especially with last minute inventory to maximize their ability to sell room nights.
Sound familiar? The Theory failed. What actually happened though was that these sites have disintermediated consumers from corporate hotel sites like Hilton, Marriott, Hyatt and others. It changed the way consumers shop and eroded hotel price points. Moreover, it eroded the ability for hotels to property plan staffing by not knowing how much of a last minute booking bounce they would get. Many people book their hotels on third party sites now, reducing the traffic and relevance of the hotel chain’s websites and costing them booking commissions. We have all had experience where we can get a lower prices on a hotel room on TripAdvisor than at brand sites like Hilton.com.
In a new effort, hotels are chasing the development of a Realtor.com for hotel chains. I was just looking for a hotel room this morning at Hilton.com and I was taken to a new site called Roomkey.com. This site appears to be a collaboration among many of the largest hotel chains – Hilton, Hyatt, Marriott, Wyndham and IHG(International Hotel Group). According to its ABOUT US page, Roomkey.com aggregates rooms from the participating hotel chains, providing consumers a way to shop for a multitude of rooms directly from the corporate hotel chain sites. It gives consumers an option to search for rooms in a particular market beyond just the corporate site they were searching on. For example, I went to the Hilton.com site while booking a room in Asheville. North Carolina. When I clicked on a listing detail page from the search, I was referred over to Roomkey.com to look at the entire available inventory in Asheville, NC for the date I was interested in.
The hotel chains have, in effect, created their own mini-“IDX” system where cooperating companies offer their inventory on each other’s websites. Seems a little late since the airline industry has cooperated like this for years. It would seem it could have moved to the hotel industry than it has.
The real estate already has an aggregation strategy – it’s called IDX.
There is one key difference between IDX and this model., however. Roomkey.com connects the consumer directly to the individual hotel chain serving up the room. Roomkey.com does not host the “listing detail” pages. REMAX.com does this.
The consumer may be better served by this model than the current IDX model, however. According to a study completed by WAV Group called the Consumer Online Real Estate Search Experience, consumers had less than a stellar experience when they contacted agents other than the listing agent. The listing agents is the most educated person about the subject property. Hyatt does not know about Hilton properties either. It’s impossible for any agent to know ALL of the inventory listed in IDX. How can a real estate agent sell effectively when they don’t know their product?
In a scenario where consumers are referred directly to the listing agent or the brokerage, consumers may be better served. In theory, those that they connect with will be able to showcase the property in its best light. This should be a better experience because the listing agent knows the details of the property better than anyone else and will be responsive enough to provide additional details as needed quickly.
It looks like the hotel industry is trying to “put the horse back I the barn” just like the real estate industry. It will be interesting to see how successful they are. Just like in real estate, the individual brands are competing against well-heeled, well-financed, highly promoted brands like Expedia, Travelocity and Trip Advisor. Will hotel chains be able to pool their efforts to unseat the highly advertised, consumer brands that offer easy to use, flexible and highly dynamic hotel search syndication sites? Time will tell, but certainly something we want to learn more about in real estate.
It is worth pointing out that the competition among third-party, brokerage, and MLS board websites has resulted in significant website functionality and content improvements within the industry that is beneficial to the consumer. In order to get exposure in the search engines, website owners – now more than ever – are having to provide better functionality and hyper-local information to compete. The existence of all of these websites – national and local in scope – provide consumers with multiple options and the consumer tends to visit multiple industry websites while conducting a home search. Many of the websites provide the listing agent contact information so the consumer already has the option to contact the listing agent directly if they simply visit websites like Zillow.com, Trulia.com, or Realtor.com. So would a broker owned national website have its advantages? Sure. But would it foster innovation to the benefit of the consumer? Not without competition.
You mention in your article that your research shows the consumer had a bad experience contacting only one agent for all the homes they were interested in. So are you suggesting that this data points to the fact that buyers should stop working with buyer agents in order to get quality information about properties? Or might you be suggesting that buyers should work with a buyer agent that specializes in their certain area of interest? The fact is that buyer agents have the ability – just the same as the consumer – to contact the listing agent to provide the buyer with quality information. And if the buyer connects with a “bad” buyer agent that does not know how to educate their buyer, which sounds like is the case a lot, does it take the buyer any more time to find a better buyer agent as it would for them to talk to every listing agent individually about each listing they find interesting?
A good buyer agent should know their marketplace and if not, they should know how to quickly educate themselves on an unfamiliar neighborhood. They will look at inventory online, view homes in person, and call listing agents to learn about individual homes, etc. And they should be much better at this type of due diligence than the buyer themselves since that is what they do for a living. The fact of the matter is that the listing agent – while they should know more about their listing than anyone else – is working for the best interest of the seller and their input about the house may have some bias. A good buyer agent should know how to accumulate quality information on behalf of a buyer to help them find the perfect house.
Historically big brokerages ruled the marketplace because they had all the listings and therefore had most of the marketing exposure. Individual agents had little choice but to join these big named firms in order to get leads and compete. The IDX has leveled the playing field allowing individual agents and brokers to compete online, which is where buyers are looking as opposed to primarily calling off of property signs. And while consumers are certain to “vote” that they prefer not to talk with an agent when starting their real estate search online, the same goes for people walking into a department store like Nordstrom. You don’t want help until you realize you need it or will benefit from it (like learning about a great sale) and then the sales person is your best friend. Buyers don’t always realize they need help until the agent they speak with gives them valuable information about the market and about listings. In my experience the buyer – at that point – realizes the agent has valuable information and they proceed to work with that agent. Alternatively, they blow them off and move on to the next real estate website. The difference today is that buyers are getting connected to more buyer agents online as opposed to listing agents directly, who are incentivized to sell their own listings as opposed to helping the buyer find the best home to meet their needs. In conclusion, encouraging buyers to go directly to listing agents is not best for the consumer.