Hotel companies are trying to regain control over room rates and bookings from online travel agencies such as Expedia and Hotels.com as they lure customers back to their own Web sites by offering lower prices.

Many large chains, including Hilton Hotels Corp. of Beverly Hills and Starwood Hotels & Resorts Worldwide Inc., are offering minimum price guarantees to guests that book through their Web sites. Hoteliers also are being more selective in doling out rooms to online agencies, which pocket commissions of 20 percent to 25 percent per room.

The efforts are taking place just as the lodging industry rebounds from a slump during which it relied heavily on online bookers to fill rooms that otherwise would have gone empty.

For the week ended Jan. 22, U.S. hotels posted an 11.1 percent increase from a year ago to $49.31 in revenue per available room, a key benchmark used to gauge the health of the lodging industry, according to Smith Travel Research, a travel information services company.

Bala Subramanian, senior vice president for distribution and brand integration at Hilton Hotels, said the company is selling 20 percent fewer rooms through third-party vendors than it did a year ago. Hilton also has increased the number of rooms being sold through its own Web site to 12 percent of total bookings, while online travel agencies sell just 2 percent.

“In the early days, pricing was a little bit out of our control,” Subramanian said. “Now there are hardly any reports of guests getting a different rate or a lower rate from a third-party site.”

Hotels have added a formidable list of benefits, including frequent flyer miles and hotel points, to make booking on their own Web sites more attractive to potential guests. Hilton recently announced a check-in service and access to invoices over the Web to streamline booking and check-out processes.

“We are really better-served when we develop a relationship with our customers, so we can learn their preferences and delight them with every contact we have,” he said.

Changing market

While the hotel industry rebounds, Web travel sites are entering into a transition phase of their own.

Barry Diller, the billionaire chairman of IAC/InterActive Corp., announced in late December that the company will split itself in two by spinning off travel sites Expedia.com and Hotels.com. Diller said the image of being a travel company was hindering the growth of its other businesses, including Home Shopping Network, Ticketmaster and Match.com.

Though Cendant Corp. bought another online booker, Orbitz.com, it also signed an agreement with rival Expedia to distribute more than 6,000 Cendant-franchised hotels including Super 8, Days Inn, Ramada, Travelodge and Howard Johnson hotels.

Hotel analysts believe that online travel sites increasingly will control the lower-priced spectrum of hotel operators, while urban and luxury hotels will seek to limit their exposure to online agencies.

Calls to IAC/InterActive Corp.’s Expedia unit and Sabre Holdings Corp.’s Travelocity were referred to Art Sackler, executive director of the Interactive Travel Services Association. He did not respond.

While hotel companies and online bookers had a shared interest during the downturn that followed the 2001 terrorist attacks, even then there were signs of a struggle for control of hotel rooms.

Then, many hoteliers turned over large blocks of inventory to online travel sites in an effort to fill rooms as occupancy rates plummeted. Most of the agreements were short-term, but some hotels got locked into contracts that turned control over pricing to the middlemen.

The contracts filled rooms, bringing in ancillary revenues for items such as phone calls or room service. But hoteliers came to see their reliance on hotel bookers as an addiction.

“They’re always pressuring you for more rooms,” Hollywood Roosevelt Hotel’s general manager, Sam Cole, told the Business Journal in 2003. “They sort of hold you hostage that way.”

Only since the economy and the travel industry have been in recovery mode have hotels revamped their strategies. Many complained that the volume of rooms booked through Web sites was eroding profit margins. Hotels typically offer their rooms at a discount while the online sites mark up rates and pocket the difference, which in the past would have gone to the hotels.

“It’s a question of taking control of your room inventory,” said Malcolm Thompson, general manager of the Park Hyatt in Century City. “We all discounted and the Internet suppliers discounted even more, so it became a vicious cycle.”

Bookings through Hyatt.com have been rising dramatically in the past year, and the company reported that total revenue booked over the Internet in one day in January exceeded $1 million for the first time ever.

Customer satisfaction

Thompson said a bigger conflict arose when loyal customers complained they were not getting the lowest rate possible by booking in advance through the hotel. Moreover, the online travel sites became so popular making travel and hotel bookings one of the top purchases on the Internet customers would wait until the last minute to book a hotel in order to get a cheaper price.

“The Internet providers were the first to develop the technology and methodology when the hotel industry got clobbered in 2001 and 2002,” said Bruce Baltin, senior vice president of PKF Consulting. “Online bookings were secondary to the hotels until they figured out that the volumes were huge, so they started throwing serious dollars at upgrading their own Web sites.”

Still, many hotels do not have the technology to allow customers to book online. At the boutique Century Wilshire Hotel, for example, guests must submit an online request to book a room and the hotel responds by e-mail. By contrast, a room at the same hotel can be booked immediately through both Expedia and Hotels.com.

Meanwhile, rates quoted at some hotels remain higher than those offered by the online sites.

A three-night stay at the Best Western Beverly Pavilion Hotel on Wilshire Boulevard last week was $122 per night at several online Web sites, while the hotel’s own site charged $135 for the same travel dates.

The New Otani Hotel in downtown Los Angeles also charged a rate of $128 on their own Web site, while online sites offered a nightly rate of $107. (Taxes and fees were not included in any of the prices.)

“What has happened for the hotel owner is they’ve basically lost control of their pricing,” said Alan Reay, president of Atlas Hospitality Group, a hotel marketing firm in Costa Mesa. “Many hotels have themselves hooked on these online sites, so you can go to 10 different Web sites and get 10 different rates.”