Hotels have a love-hate relationship with online travel agencies like Expedia and Hotels.com. On the 1 hand, resorts depend on those sales channels. On the other hand, those reservations come at a cost The hotels must pay the OTAs a commission, which makes bookings profitable.
If the hotels had their druthers, all reservations would be made via the hotels’ own websites or programs. That means no commissions on the sales, and the resort has the chance to up-sell and cross-sell its services throughout the booking process.
A multi-pronged approach has been obtained by the resorts to ensure they’re maximizing the amount of business that is being booked right. First was the lowest-price guarantee, invoked to assure passengers that the prices displayed on the hotels’ own sites are the lowest available anywhere; no need to waste time browsing the OTA websites. The next was the linkage of loyalty programs with bookings. Loyalty points are not earned by OTA bookings. And, only, although taking the best-rate guarantee loyalty program members get a discount room rates when booking directly.
Those efforts travel customers have continued with OTAs, both critically their remains and, to research their choices. A study by Piper Jaffray suggests that they were right to do so. Or at least partly.
According to Skift, the study compared prices for stays at 86 hotels in major cities worldwide since shown both on the hotels’ own sites and as shown on Priceline.com, Booking.com, Expedia, TripAdvisor, and Kayak. The outcomes were as follows:
- At 66 percent of the surveyed hotels, the costs were exactly the same through all stations.
- At 21 percent of the surveyed hotels, the OTA costs were reduced, by an average of 4.2 percent.
- At 13 percent of those surveyed hotels, the costs were lower on the hotel sites, by a mean of 3.8 percent.
So much for that guarantee, right? On the other hand, the analysis chose to not use the hotels’ discounted loyalty rates for its comparisons, so that it might be that members are getting a deal that was much better when booking 36, than indicated.
And then there is the matter of the points sacrificed for OTA bookings, and made for direct bookings. Points and the programs do have some value, while loyalty programs have been devalued. And by anyone’s calculations, paying getting things and $ 100 is a much better deal than paying $100 and earning no points.
In the long run, there remains a strong argument in favor of assessing the OTA websites as well as both the resort sites for travelers who are not loyalty-program participants. For those people who are members, when discounted rates and the points are payable, the situation for OTA booking is much weaker.
Reader Reality Check
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