Is Room 77 Pivoting or Is It Just Changing Its Marketing Strategy?

If you consider  Web analytics, then Room 77, the hotel metasearch site founded in 2010, looks as though it has fallen off the face of the earth.

Web analytics firms can be notoriously unreliable in their trackings, but Room 77’s desktop traffic numbers over the last few months as measured by SimilarWeb, Quantcast, Compete and comScore, all point to a similar downward spiral.

What’s going on? Is a pivot under way or is something else at play?

The questions arise in light of the fact that Room 77 has been putting a lot of its public relations efforts of late into marketing its CheckMate business, a mobile hotel check-in service for hotels and distributors that Room 77 acquired in March 2013 around the time it brought in former Jetsetter CEO Drew Patterson as Room 77 CEO.

After Jetsetter, Patterson had served as CheckMate CEO, and was a co-founder.

Checkmate is thought to be in modest growth mode, and is doing some hiring after forging relationships with a few hotels, including Commune Hotels + Resorts, MetWest Terra Hospitality, and Pacific Hospitality Group, among others.

The drop-off in Room 77 traffic, along with the public emphasis being placed on CheckMate, comes after Room 77 founder Brad Gerstner spoke at the PhoCusWright conference in November.

Traffic overview report from SimilarWeb.

Gerstner lamented the fact that acquiring customers for Room 77 and other startups is more expensive than ever, adding that “a lot of us under-estimated” the network effects that larger competitors can use to such advantage.

Was Gerstner signaling that the game is up for Room 77 despite the fact that it has attracted $43.6 million in total funding?

Despite the attractiveness of its actual product, including new search features, lots of branded booking, the availability of room-specific information, and senior and military discounts, it’s a tough haul for Room 77 and competitors like Hipmunk that don’t have a first-mover — or early mover — advantage.

As an executive at a Room 77 competitor put it: “I do agree with Brad that metasearch is a tough market to crack, particularly with a me-too product against big spending competitors.”

“Checkmate’s an interesting service, but I think others are better-positioned to make hotel check-in more seamless,” opined the executive, who declined to be identified.

Patterson isn’t buying the theory that Room 77 is de-emphasizing hotel metasearch in favor of CheckMate.

The drop-off in desktop traffic reflects the fact that Room 77 has “optimized its marketing mix,” spending on mobile marketing because this is where Room 77 believes the largest future growth will be, Patterson says.

A spokesperson adds that not only did Room 77 alter its marketing mix, the company also reduced marketing spend while it hones its product.

The efficiency of desktop marketing is less than it was a few years ago, Patterson says.

“I don’t think we are geniuses or what we are doing is way outside conventional thinking,” says Patterson, adding that Room 77 is being prudent in tilting its paid marketing toward mobile.

“I think this is the way the world is going,” he adds.

If Room 77 is making strides in mobile because it is pushing its paid marketing in that direction, then traffic-measurement firm Compete isn’t picking it up. Compete provided Skift with desktop and mobile numbers for Kayak and Hipmunk, but had no mobile numbers for Room 77.

A comScore spokesperson says the company didn’t have mobile numbers for Room 77 “most likely because it didn’t meet the minimum threshold of unique visitors for us to accurately report.”

Total Unique Visitors (000) in the U.S. December 2013

Source: comScore

An official at another measurement firm put Room 77’s traffic trends in the following context:

“Service-driven websites such as Room77.com need to work well across all platforms. While mobile usage is increasing, desktop traffic is still essential for most e-commerce or booking sites in the US.

“Their steep decline in web traffic doesn’t necessarily represent a steep decline in revenues but it’s often connected since the more people browse a site, the more tempted they are to purchase. It’s marketing basics beyond any digital insight.

“Over 90% of their [Room 77’s] site visits come from the U.S., a country where Internet usage on desktops remains very strong. If the company operated in emerging markets such as South America or Africa the story would be very different since most of their population relies on mobile internet. This is not the case in the U.S. and websites need to produce products that succeed across all platforms and put customers first. ”

Patterson says Room 77 is running the hotel metasearch product and CheckMate as two separate businesses, and they are in different stages of development, with Room 77 being in a growth and equity phase.

There are 30 people working on the Room 77 hotel metasearch product, and eight additional employees focus on CheckMate, although there is some overlap, Patterson says.

As evidence that Room 77 is not downplaying hotel metasearch in favor of CheckMate, a spokesperson points out that Room 77 “recently rolled out a completely revised mobile experience for iOS, Android and mobile Web.”

Room 77 has also revamped hotel search so that when a user merely begins entering “Boston,” then search options immediately appear such as “hotels near Boston Common,” “hotels near Fenway,” “cheap hotels,” and “hotels with free parking,” for example.

Patterson says Room 77 is “excited” about the opportunities for both the Room 77 product itself and CheckMate.

Meanwhile, there is no indication that Room 77 is reducing staff, which would be a signal that it is easing up on its ambitions.

Still, all would agree that the going is very tough out there.