Ryanair claims that the site guarantees passengers the lowest prices on more than 300,000 hotels across Europe.
The site compares hotels ranging form small independents to luxury five-star accommodation.
O'Leary told Marketing that the brand will be spending €1m on email marketing for the hotels site over the course of 2012.
The airline chief executive dressed in pyjamas for the launch of the site yesterday (18 April).
Yesterday however, he said he would be putting money into marketing the new site because, "Ryanair is a well-known brand, but Ryanairhotels.com isn't, and we want to get the message out there.
"We're more concerned to build up the business and use whatever commissions we get to build up the promoting, the advertising, and the brand of the Ryanairhotels.com website."
O'Leary said: "Making money in the short term isn’t the objective – guaranteeing that people get the lowest [priced] accommodation across Europe is the objective.
"We guarantee people the lowest prices at every hotel on that website, and, if they find a lower price at those hotels than on the Ryanair website, we'll refund the difference to them."
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This article was first published on marketingmagazine.co.uk