Hilton to take on internet boutiques

Hotel giant Hilton plans to usurp the growing popularity of online travel operators by offering punters cheaper deals directly.

The London-listed group is concerned that operators such as Expedia, owned by InterActive, and lastminute.com are block-booking rooms, giving one set of suppliers too much control over its room stock. The chain is also concerned that customers could be over-charged by online retailers.

So it is launching a campaign guaranteeing the lowest available rate to customers who book either directly with Hilton or through approved bricks-and-mortar travel agents. Should the chain be undersold, it will refund the price of the room and pay the guest an additional $50 (£27).

Tim Davis, the senior vice-president of e-commerce and distribution, said: "We want to make sure our brand can fairly compete in the marketplace. Hilton is one of the most recognisable brands, and the business model of some of the third-party distributors goes against that.

"They base their offerings not on what the consumer wishes to see, but on what hotels make them the most profit. That's why we don't want to be dependent on third-party suppliers. We're trying to move away from wholesale distribution."

The guaranteed rates, which will come into play next week, will be backed by an "extensive" marketing campaign. Mr Davis said he was not worried about how the move would affect online travel agencies: "Any distributor who employs restrictive practices for consumers and hoteliers will be concerned but that's no concern to Hilton."

Around 4 per cent of Hilton's business currently comes via its own websites but the group wants to increase that to between 25 and 30 per cent within five years.