The move by global distribution systems to display complete hotel pricing, begun in 2003 with much fanfare, has stalled, leaving buyers frustrated. Total pricing promises buyers and travelers the nightly rate, taxes and other fees, but most hotel chains do not provide it.
Cendant's Galileo International last month became the last of the four GDSs to announce complete pricing but, as has been the case with similar announcements, few hotels actually have agreed to provide the expanded pricing information. In fact, Starwood Hotels & Resorts Worldwide is the only major hotel company participating with Galileo, limiting its usefulness.
"To be of any value, pricing has to be consistent across the board," said Peggy Lee, global travel and meeting manager for Network Appliance in Sunnyvale, Calif. "It doesn't help me or my travelers if the information is only available on a portion of the hotels in the system. How are travelers to make the best decision if the prices they're getting are apples-to-oranges, rather than apples-to-apples? Consistency is the name of the game."
Agents have the information elsewhere in the GDS, but it can be time-consuming for them to pull it up on the screen. Occupancy and sales taxes are a percentage of the daily room rate, which agents typically are too busy to compute, so it's left to the traveler. Surcharges are a flat dollar amount, regardless of the room rate.
"Travelers easily can get confused if it's not clear which quotes are complete and which aren't," said Kim Maschoff, manager of hotel program consulting for Consulting Strategies.
"Given how much money lodging taxes can amount to in major cities, the complete price can add a significant amount per night to the bill, which certainly figures into the traveler's budget for the trip," according to Network Appliance's Lee.
Adding to buyers' frustration, negotiated hotel rates began rising in 2004 and were significantly higher for 2005. Therefore, the tax bite will be higher, making it more important for planning and budgeting for travelers to have complete pricing. Travelers using an online booking tool see the same information as agents since the online tools pull content from the GDSs.
"We all know the basic hotel room rate is only one of three or four components to the ultimate cost of the room," said Andrew Menkes, chairman and CEO of Partnership Travel Consulting. "With high taxes and high room rates, the additional components represent a lot of money. In New York, for example, the nightly tax bite is close to 14 percent and as of April 1, there are two separate surcharges. With the cost of a room expected to be about $225 a night in 2005—and that's the average, meaning many rooms in Midtown go for much more midweek—that's at least another $35 in taxes and surcharges."
Worldspan and Sabre were the first GDSs to introduce complete pricing in 2003, Worldspan with data from Starwood, Sabre with data from Marriott International. Worldspan subsequently started receiving data from Marriott as well. Prices for any Starwood or Marriott brand hotels were included. For other hotels, the price on the display screen was for room rate only, creating the inconsistency.
Madrid-based Amadeus gets complete pricing information from Maritim Hotels, which operates in Germany, and a small number of hotel representation firms. One of the representation firms, London-based Supranational Hotels, also provides total pricing to the other GDSs. Its value to U.S. buyers is limited, however, since it represents only one U.S. hotel.
At the time of its initial deal with Starwood, Worldspan described the availability of complete pricing as a milestone. "What it really represents is a change in how our system is used," a spokesman told Business Travel News
(BTN, July 7, 2003). "In the past, GDSs always performed hotel reservations. Now, we're becoming a system that's more of a point-of-sale tool for travelers as well as travel agencies, either online or offline."
According to Worldspan and the other GDSs, they would like to add complete pricing for more hotels, but are dependent on the hotels to provide the information. Galileo vice president of marketing for the Americas Eileen Kennedy said she is sympathetic to buyers' dilemma.
"Complete pricing eliminates surprise charges," Kennedy said. "It gives guests a clear expectation of the total price when they check out."
For their part, hotels generally have resisted providing the fuller data because of concerns their rates will appear higher than competitors that only provide the basic room rate.
"They're afraid the full disclosure will put them at a competitive disadvantage," Menkes said.
Marriott and Starwood, on the other hand, take the position that providing travelers with the full story outweighs the downside.
"We continue to think it's a good thing to let customers see the complete rates, including all taxes and service charges. We have applications up and running at Worldspan and Galileo and are testing an application with a third. Our intention is to work with all the GDSs. We definitely remain behind the product," said Linda Kent, Starwood director of global agency distribution. As Kent sees it, Starwood actually improves its competitive standing in the eyes of buyers by providing the full data.
Hilton Hotels Corp. has had what it calls pre-purchase tax display available on its branded Internet sites since late-October, but not on the GDSs, according to Maureen Mackey, Hilton managing director for business travel sales.
Hyatt Hotels Corp. and Carlson Hotels Worldwide said they had the technology in place to provide complete pricing, but that other projects took priority.
"We have the specifications to provide full-rate disclosure and have put it in our queue for projects," said Hyatt vice president of electronic distribution Joan Lowell. Lowell said she expects the project to get underway by year-end. "It's actually been moved up on the priority list."
Hyatt currently keeps tax information updated in the GDSs, but "it's information, versus part of the availability in the rate return. What we have to do is figure out is how to return that with the rate," according to Lowell. Complete pricing is not available on Hyatt.com.
"Complete pricing isn't on Carlson's short-term radar screen, but we do believe it's critical," according to Christine Brosnahan, vice president of reservations and distribution. "People want one-stop shopping. 'Make it easy for me.' The challenge for hotel suppliers is that the way the tax and other charge fields have been built, it's not a numeric calculation, but requires infrastructure changes within different central reservations systems."
Brosnahan said Carlson expects to be able to provide complete pricing by early 2006.
"Hotel companies that don't offer complete pricing eventually will be at a huge disadvantage because agents will expect the full information," Brosnahan said. "The few companies that don't offer it will be left behind."