The founders of Hotels.com, Bob Diener and Dave Litman, launched Getaroom.com, a website that pays travel agents commission when they book over the phone.
Getaroom offers published hotel rates for online booking, but the site enables consumers and travel agents to get a 10-50% discount if they register at the site and call a toll-free number. Agents merely need to give their IATA number to receive 10% commission.
While online booking is considered to be more cost-efficient than phone reservations, Diener said the company's phone costs are kept at a minimum because customers already know what they want when they call. Plus, the call center operator, which Diener declined to identify, has lots of experience in handling hotel bookings, he said.
Diener described Getaroom's offline model as using "reverse opaque rates." Getaroom gives hoteliers a channel to market distressed inventory without having to dilute their brands by publishing discounted rates online, he explained.
Diener and Litman founded what became Hotels.com in the 1990s. They sold the company in 2003 to Barry Diller's InterActiveCorp, which later spun off its travel businesses as Expedia Inc.
Diener and Litman’s five-year non-compete agreements with Hotels.com and Expedia expired on Jan. 1. The duo owns Getaroom in its entirety with no outside funding.
Commenting on the position of Hotels.com under Expedia Inc., Diener said Hotels.com is a major player "and still has a great brand name.” Diener added that he and Litman were "much more focused on value" when they ran the show.
He said Hotels.com wants to be "everything to everybody."
"They have lots of hotels, even if some are of low value," Diener said. "Their philosophy is to put on everything everywhere."
Diener said Getaroom focuses on select markets and only lists hotels that provide great value for customers.