18/05/2017
Have you booked accommodation through an online travel Agency (OTA) such as Booking .com or Expedia? These OTA’s have websites which are easy to use, incorporate maps and images of the hotels, and their rates are competitive, all good reasons to book your hotel from the convenience of your armchair. But before you click, pause and think…
Booking .com is owned by the billion dollar American company Priceline (no affiliation with Priceline chemists) and is based in Amsterdam. Booking .com also owns Agoda, the large Asian OTA.
Expedia is in opposition to Booking .com and owns Travelocity, Orbitz, Hotels .com, Wotif, Lastminute, Hotwire, Trivago, CheapTickets and eBookers, among others.
These OTA’s claim to offer ‘best’ rates if you book accommodation through their site. However, they make each hotel partner sign a contract which prevents them from discounting prices directly on the hotels own website, ie they are not allowed to offer cheaper rates than those found on Booking .com, Expedia and their affiliates! By doing this, these OTA’s are in fact driving up prices.
The standard commission rate charged by both Booking .com and Expedia is 15% but in some instances can go as high as 25-30%! This can be crippling to the hotel, squeezing the hotel’s margins through large commissions. Small family owned businesses are very vulnerable. Considering that each day, over 1,200,000 room nights are reserved on Booking .com alone, the revenue generated through commissions is enormous.
As well as the commission, these OTA’s are also obtaining valuable guest data such as email address, home address, credit card information and other relevant guest data and deliberately withholding it from the hotel. Booking .com for example, generates an email address for the guest and provides this to the hotel. So, on top of losing income through commissions, the hotel cannot contact the guest directly and has no information about the guest pre arrival.
Don’t be fooled into thinking that higher ranked hotels have better prices, ratings or reviews. Expedia ranks hotels according to how much commission they are willing to pay that night!
These overseas based companies pay little tax in Australia. Most of the revenue goes overseas.
What you should do?
1. Use the OTA’s to find the hotel of your choice but Book Direct. Booking through these middlemen is helping to drive up prices.
2. spends over $40 million annually on Google Ads to direct traffic away from hotels own websites to Booking .com. When you Google the hotels name, check the URL. It may mean scrolling through to page 3 or 4 to find the hotels actual site.
3. By contacting the hotel direct you may get better rates or negotiate free breakfast, free parking, or an upgrade! The hotel will be saving on commission so it is worth their while!
4. OTAs often display ‘X rooms left’ on the hotel you are viewing to create a sense of urgency hoping you will book immediately. By calling or emailing direct, you can check availability and make sure the room is EXACTLY what you are after. ie groundfloor, has a view, microwave etc etc.
By all means use these sites to compare hotels & prices but then call your chosen hotel or go to their website!
Please share as I want as many people as possible to book direct.
