New Starwood Hotels Plus website ventures into the turf of online travel agencies (e.g. Expedia)

In the ongoing battle for customer loyalty between branded hotel websites and the online travel agencies (e.g. Expedia or Orbitz), Starwood Hotels has hit a new milestone with its new Starwood Hotels Plus website.

The new site allows guests to book packages that bundle together hotel rooms with air flights, car rentals, both, or even destination activities.  Keep in mind though that the hotel inventory that this hotel pulls is strictly limited to Starwood’s portfolio of hotels.

Rumor has it that as an added incentive to drive customer booking loyalty to Starwood’s branded websites, SPG members get bonus 500 Starpoints for each night they book through this new Starwood Hotels Plus booking channel.

I took this baby for a test drive search that included the Room + Air combination.  You can see in the search results screenshot below that Starwood hotels show up without a problem, but my concern is that the air selection is quite limited in this example.  Going from Singapore to San Francisco, I would imagine the cheapest flights would be on United or Cathay Pacific . . . but Delta?  I think not, but it was the top search result for flights.  Perhaps the air partnerships that Starwood has in place are more geared towards US domestic travel, but I highly doubt that Starwood has anything equivalent to the vast inventory Expedia or other online travel agencies have.

Even if this new Starwood Hotels Plus website isn’t the most robust at the moment, its introduction still marks a significant and symbolic move for a hotel company to venture into online dynamic packaging of rooms and flights . . . and I think this is just the tip of the iceberg.

Typically hotels use dynamic packaging to conceal deeply discounted rates.  The consumer (and the hotel’s competitors) can’t tell how much the hotel is discounting its rates because they are bundled in with the airline ticket.  I’m curious whether Starwood would then use this site as a means to disguise distressed inventory rates and push occupancy over hotels’ need dates.  It’s possible then that you could get hotel rates lower than online published best available rates, but you’d have to some hefty homework to figure that out.

In case you missed it, Google just bought ITA Software for $700 million.  This is Google’s biggest move to bolster its competencies in online travel.