Increasing Popularity of 'Secret Hotel' Bookings Benefits Travellers and Hotels

LONDON, August 9, 2013 /PRNewswire/ --

An innovative approach to hotel reservations called 'Secret Hotels' has been gaining traction both in the U.S. and UK in recent years. The concept offers willing travellers savings of up to 45% in exchange for a degree of uncertainty with their hotel booking.

Booking agents offer some basic details about the participating hotels, namely a rough idea of the location, as well as the facilities, star rating and often Trip Advisor ratings, but do not reveal the hotel's name until the booking is confirmed. Research has shown that this method allows hotels to clear unsold inventory without exerting downward pressure on standard room rates.

Bookings made in this way accounted for 6 percent of U.S. hotel reservations for major hotel brands in 2012, according to STR Global, a leading hotel data consultancy. Although not a dominant channel, the figure represents a significant increase from just two years ago when the share stood at just 2 percent. As a case in point, Hotwire, one of the market leaders reported earlier this year that its secret hotel bookings have doubled in the last year and it has added 5,000 hotels to its offering.

Extensive studies into Secret Hotel bookings by the Tepper School of Business at Carnegie Mellon School found that the practice, also known as 'opaque selling', actually increases profits for hotels without disrupting sales through their regular channels. Additional research by the University of California supported this view and found that when hotels sold discounted rooms without hiding their name, it exerted a downward pressure on prices as travellers held off making reservations until the last moment. From a hotel's point of view, this often became a race to the bottom.

A more extensive review of the secret hotel channel, and its benefits to both consumers and hotels, can be found at: http://www.secrethotels.eu/secret-hotels-win-win-for-hotels-and-travellers/

Note to editors

• In the U.S. the secret hotel channel accounted for 6 percent of hotel reservations for major hotel brands in 2012, growing from 2 percent in 2010.
• The secret hotel channel can benefit hotels by clearing unsold rooms without the issues that branded discounted rooms can cause.
• SecretHotels.eu is a leading promoter of the opaque channel and offers savings of up to 45 percent on reservations.
• Journalists can contact the SecretHotels.eu press officer at jamie@secrethotels.eu
• Further information on deals can be found on their website: http://www.secrethotels.eu