This New Booking Engine Claims it Has Found a Way to Offer the Lowest of Low Prices
At the end of May, we gave you an inside look at the inner-workings of hotel booking sites, specifically rate-parity laws that dictate the different prices that can be offered to the consumer through various booking mediums, such as hotel websites and competing booking engines.
A startup out of Denver, Hotel Engine, is the latest discount hotel booking site to pop up on the Interwebs, and, of course, claims to have the lowest prices, as do many others. But according to founder Elia Wallen, Hotel Engine actually has a case to the claim thanks to its use of a simple strategy that allows it to get around the rate-parity issue amongst its competition: Free memberships.
Wallen told the Denver Post that rate-parity laws that hinder competing public sites working with the same hotel do not apply to membership-based sites, and thus, those who take a few minutes to sign up will be greeted with friendly prices. Registration is free, but that simple step of requiring visitors to sign up before getting a price quote means it is not held accountable the way Expedia and others are by law.
Other than the fact that users must register, the site is very similar to its competition on the surface in terms of consumer interaction. The only major difference as of now is that its customers are required to pay in full upfront (there’s no pay later option as there is with Expedia). Hotel Engine is in the process of creating a loyalty program for frequent and/or business travelers, though, that would allow them to pay at the end of each month for their hotel stays. The site currently has a rewards program that that gives member credits of up to 3% of each booking.
The competition is good news for consumers, for sure, and good news for Hotel Engine in finding a loophole. We’re sure hotels won’t exactly be thrilled about the lower rates, so the challenge for Hotel Engine will be sending a great enough volume of bookings to keep the hotels happy. Set to launch completely in July (its soft-launch was in February), the site has signed up 34,000 hotels in about 5,000 cities and hopes to add another 24,000 by the end of the year.
Give it a try on your next hotel booking, and let us know what you find and what you think.