Hotels Now See Online Travel Sites as Rivals (marketwatch.com) 75
Major hotel chains are engaging in an online turf war with the very travel sites that have helped drive their businesses. From a report: Marriott, Hilton and InterContinental are using extensive marketing campaigns to claw back business from Expedia, Priceline and other travel-booking sites, which steer customers to hotel properties but also take commissions of up to 30% for each reservation. The chains are starting to treat these sites less as valuable business partners and more as gatekeepers standing between them and their customers. Many large hotel brands are offering lower nightly rates and other perks to loyalty members who book directly through their sites instead of online travel agencies. [...] The new battle is the latest episode in a two-decade "frenemy"-style relationship between online travel agencies and the hotel industry. Sites such as Expedia and Priceline were crucial for hotels during down periods such as after 9/11, but they have gradually eaten into the share of overall bookings ever since. Also read: Why Bargain Travel Sites May No Longer Be Bargains.
Travel sites are useful (Score:5, Insightful)
I use the travel site to find the best room and rate.
Then I call the hotel directly to book usually at a better rate.
Re:Travel sites are useful (Score:5, Interesting)
So well, fuck them.
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That is exactly my experience, too. They are just too greedy - or the contracts with expedia etc are anti-competitive in nature.
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This is objectively stupid. Any competent revenue manager should be telling their desk staff to ask which site the customer found them on and then authorize them to at least match the net rate the property would have received if the customer booked through foo.com. They can't lose, mathematically. If there is resistance to this, it can only be stupidity or motivation other than revenue.
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They are fighting against the online travel agents AND other hotels.
So it goes like this: They want customers to migrate from travel agents to direct booking. They do NOT want customers to go from Agent booking at Hotel A to Agent booking at Hotel B, so they have this love-hate relationship with agents. If they dared to completely gut the agents, the significant bookings brought by that agent would drop off like a rock.
It isn't
Hidden Advantage of Direct Booking (Score:5, Insightful)
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Yup.. I had a similar experience with Expedia. Booked a (very expensive) room at a hotel in the south pacific. The night before our flight I decided to call the hotel to confirm something or other (probably hotel pickup). They said they had no booking for me. Someone at expedia had contacted them about the booking but never actually *made* the booking.
A couple of hours of banging my head against the expedia customer support wall and I had nothing and had to scramble to find a place for my wife and I to
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I'm guessing this is exactly what just happened to me 48 hours ago in Prague using Booking.com. I needed to change hotels last minute so I booked the room at like 11am, we showed up around 2pm and were told with a smile, "We didn't have that room so we upgraded you. Here is our card. Call us next time and we'll also give you better rate." Ummm hey all I know is I paid for a Junior Suite and you gave me a Deluxe WOOT! But yeah it could have gone badly especially since we had already checked out of our other
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Having booked with booking.com a few times I don't think I've ever gotten a booking confirmation within 3 hours. Personally I wouldn't use a middle man when you need something last minute. That's not just these middle men that is everything. At work we use a very frigging expensive corporate travel agent who are equally bloody useless at last minute bookings.
Fortunately I never ended up in a booked out hotel so I always got a room, but then I always had grief when the reference number didn't match the booki
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As it happens i did get the confirmation really quickly. So I felt good about it. Had I know I would have just called the hotel directly or even just walked in the door. But doing it online from the coffee shop was much easier. But yeah, won't be doing that again still.
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Even if there is no difference in the price to direct booking there is one huge advantage: Expedia oversells rooms. I've had the experience of making a reservation with Expedia and turning up at a small US town in the middle of nowhere with the wife and kids on holiday to find that they overbooked the room. Fortunately, the staff had realized this and booked the only other remaining hotel room in the town so, thanks to their thoughtfulness we were ok, but after that experience, I have only ever used Expedia to find hotels and will never, ever use them again to book a room.
Booking direct has other advantages, even if you dont get a discount, you'll be ahead of the Expedia crowd in getting better rooms.
Because hotels have to pay Expedia and Priceline to get bookings, they automatically assign the worst rooms to guests who book via third parties and save the nice rooms for people who book direct.
There are three factors to getting a free or very cheap upgrade.
1) Book direct.
2) Be a repeat customer.
3) Be kind to the staff.
I've received many a room (and car) upgrade j
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I use the travel site to find the best room and rate.
Then I call the hotel directly to book usually at a better rate.
I do this with airlines. If I buy direct, it is much easier to deal with any changes in itinerary, add baggage, get customized meals (I am a veggie).
I don't use hotels. Airbnb is usually cheaper, and almost always a more interesting experience.
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This.
> Many large hotel brands are offering lower nightly rates and other perks to loyalty members who book directly through their sites instead of online travel agencies
Whenever I find the hotel to book on tripadvisor, I call or go to the hotel website to make my reservation. Also I enrolled (for free) on some loyalty program like IHG and have rebates, free wifi (some hotel charge like 20$/day), complimentary drink at the bar, etc and all this for less than all the hotels.com/trivago/expedia/travelocity
Then decide which business you're in! (Score:2)
If you're going to be selling temporary housing to people, then focus on that business. Make it a great experience. Or a cheap experience if that's the market you decide to be in. Just focus on that and let someone else worry about getting people to you.
Conversely, if you want to be in the business of helping people find temporary housing then focus on doing that. Get out of the housing portion if it's causing you a headache/heartburn because of conflicts with the first part of your business. Get really goo
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From the businesses point of view it's seldom good to be not in control of the sales side of business.
The well-known brands have spent a lot of money to be a well-known brand. In return they expect more customers, especially those who are too lazy to do a proper market research before making a decision (aka "loyal customer").
Travel agencies and booking agents increase market transparency - that's good for the customer, not the businesses. Increased transparency means that customers find the Hotel Noname or
Good idea to book through hotels if possible (Score:4, Insightful)
Not mentioned in the summary directly but the corollary to "perks", is that many hotels now will treat you poor poorly if you did not book through the hotel itself - you may not get as nice a room (the people checking you in have lots of flexibility as to location), you may not be as likely to get a request like late checkout, they may be less (or not at all) flexible when changing a booking.
So even though travel aggregators are convenient, it's probably a good idea to just book through the hotel...
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many hotels now will treat you poor poorly if you did not book through the hotel itself
That makes sense. If you booked through a 3rd-party site, you likely just picked them because they had the cheapest room, and next time you are likely to shop with the same criteria. They have little incentive to expend time and resources to make your stay nicer.
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Next time, you don't want to take the risk. The first time, you have no idea what hotel is worth staying at because you can't trust price or reviews. What you say is only true if you never travel to the same city twice or don't care about the quality of your actual stay.
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Which isn't smart. After finding something through a travel site, I'm likely to book directly on my next stay - unless that stay was terrible. Loyalty is still a thing, because price isn't everything and even expensive hotels are sometimes a dump.
Finally (Score:3)
Many of those sites are owned by a single company anyway, see https://en.wikipedia.org/wiki/... [wikipedia.org].
Every time I've tried to book travel in the past few years, I've found better prices directly on hotel chains' web sites. There was one time when the chains had no rooms, but Expedia did, but at $500/night (vs $125 normal rate.) I passed.
From my experience, the hotel industry got much worse following the rise of these reseller sites. They suck up rooms and hold them, hoping for a better deal. That makes it harder to find rooms, and their policies are always worse. It wasn't long ago that any hotel wouldn't charge you if you canceled the day of your reservation. That's getting harder to find, since these sites lowered expectations.
These sites sure advertise a lot, but a tiny amount of searching will almost always find better rates. I mostly use them to see what hotels are in the area then go directly to the hotel's web site to book. Always cheaper.
They are doing the same thing with rental cars, too. I've always found better rates elsewhere than those sites. Costco, in particular, has better rates for car rentals than just about anyone and if you don't want the car, just don't pick it up. No fees.
The sooner these sites die, the better.
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These sites sure advertise a lot
There is the key. If an industry advertises A LOT there is a good (99%) chance it is a lucrative endeavor (ripoff). The prime example is auto insurance. Executed efficiently it is a no-brainer money making scheme. I mean how can a business afford THAT much advertising? Advertising is expensive and travel sites buy enormous amounts of ad time.
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Comparison sites advertise so heavily because their power to get a good commission and discount from their vendors is in direct proportion to the number of people who can be hypnotized into using them without thinking of trying direct.
So I agree that advertising is most heavily relied on by either companies whose main competitive advantage is mind-share rather than product quality or a unique selling point, and on industries like insurance that sell virtual products with a low marginal cost of production
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From my experience, the hotel industry got much worse following the rise of these reseller sites. They suck up rooms and hold them, hoping for a better deal. That makes it harder to find rooms, and their policies are always worse. It wasn't long ago that any hotel wouldn't charge you if you canceled the day of your reservation. That's getting harder to find, since these sites lowered expectations.
The concepts isn't new, consolidators have been around a long time, they were just hard t find and often solid inventory through travel agents; which helped agents get good deals for clients and unloaded excess stock for hotels. The rise of sites, as you point out, made this worse as it became easy to find these deals. Hotels still can sell these rooms as tehy haven't sold them to the site, just made them available at a specific rate and if the room goes away before the site books it then so be it; at least
Hotel Room Turf War (Score:2)
For hotels to actually be successful in clawing back the business from travel sites, they're going to have to be willing to take that 30% commission that they were giving the travel sites, and give it to the traveler as a discount.
They're not getting that money anyway, but they can use the 30% discount to lure people back, and when they're used to booking with their favorite chain, they'll be able to reduce that to 20% or 15% and effectively offer their returning travelers more upgrades or amenities.
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I stick with IHG and the loyalty program there. It more than pays off for me... Always upgraded, lots of free nights, free amenities, etc. Yes, the room may be more "expensive", but when you add up all the nice things that come with the loyalty program - it's money ahead AND much more convenient. Of course, I travel a LOT (86 nights in hotels so far this year), so I'm most likely not typical. But getting free meals, drinks, water, wifi, upgraded rooms, free laundry, etc. is definitely worth paying a fe
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I stick with IHG and the loyalty program there. It more than pays off for me...
I would bet that you are in the minority. The vast majority of people don't travel regularly for business, they have their 1-3 trips a year and stay wherever is cheapest/nicest. I travel regularly for work (~1/month) but pay for travel out of pocket, so I'm always looking for a deal. I don't bother with the loyalty programs.
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For hotels to actually be successful in clawing back the business from travel sites, they're going to have to be willing to take that 30% commission that they were giving the travel sites, and give it to the traveler as a discount.
The are actually yield managing so those sites simply represent additional marginal revenue so giving up 30% isn't so bad to fill a room that might go unsold. If the drop rates across the board tehy'd lose too much money since everyone would get the discount.
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For hotels to actually be successful in clawing back the business from travel sites, they're going to have to be willing to take that 30% commission that they were giving the travel sites, and give it to the traveler as a discount.
One potential problem with this is that when a sales agent becomes powerful they insist on parity-pricing, meaning that they must always be given the lowest rate available, forcing vendors to cross-subsidise these agents if they wish to offer their own discounts. Amazon is a master at this.
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For hotels to actually be successful in clawing back the business from travel sites, they're going to have to be willing to take that 30% commission that they were giving the travel sites, and give it to the traveler as a discount.
They dont need to give us back the full 30%. Just 15-20% will be enough and many of them do if you call.
The problem is the T&C's for these sites demand that hotels cannot advertise a cheaper price than is listed on their site, This is illegal in Australia, probably most of Europe but it doesn't stop Expedia and Priceline from de-listing hotels that don't play ball.
Travel Agents and airlines had the same problem (Score:5, Interesting)
I have a feeling that this is just the industry catching up. Airlines used to need the services of travel agents and would pay them a commission to sell tickets. This was because they had no or limited capacity to sell seats directly to the public. Once they got this capability, airlines stopped paying commissions and travel agencies either went out of business or specialized in areas where they could still make money. Hotels are a much higher margin business than airlines, and are much more inclined to increase occupancy at the expense of lower room rates, so it makes sense that they would pay commissions to get someone on the property and spending money. I know when I travel for business I'm much less cost-conscious than I would be if I were a vacationer, so hotels do make a lot of money once travelers are on-site.
I'm in technology and most tech people are all for squeezing every single inefficiency out of every system out there. And it is true that there are a lot of brokers and middlemen out there - ask anyone who just bought a house or car for examples. What I wonder is whether tightening the screws so much that you start to affect employment in significant ways is such a good idea. You can have a 100% efficient process, but if your profit relies on people having a disposable income to buy your products, does it make sense to leave some slack in the system?
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Middlemen that add little to no value and do nothing but take a cut are a net drag on the economy; thankfully these tend to go away because of market forces, such as when travel agents stopped getting commissions for selling plane tickets.
Middlemen can reduce transaction and search costs, and thus add value. For example, a knowledgeable travel agent can explain the pros and cons of various cruise lines so you can pick one that meets your needs and not have to pour over reviews and take a few to see what you like. They can also bundle products to get you a cheaper total cost than buying each separately; or get bonus and upgrades. Similarly, hiring a general contractor instead of subbing all the work yourself adds costs but saves time and he
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If the middle man adds value (some do), I don't think that OP applies. Sometimes middle men are high value because they do the things you suggest (aggregate a group of customers and get them a better rate, for example). Many middle-men add no value. The example given was real estate agents who charge 6% to put your house on MLS! Ed
I would say realtors destroy value by encouraging selling at the low end of the market. The ads I get from them soliciting listings brag about how fast they sell homes. Simple economics dictates things sell faster the cheaper they are, and the commision incentivises faster sales. An agent may only get an extra 600 dollars if you get an extra 10000; so getting the several thousand dollar commission quickly is better than a few hundred extra a month or two later. Their goal of getting paid as fast as possible
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Travelers want to buy a trip. (Score:5, Interesting)
Even more importantly, business travelers aren't generally allowed to buy anything other than a Trip, they have to use some Travel Management Company who is essentially an Online Travel Agent but with a shitty interface and a corporate policy enforcement.
American Express is disrupting the Agent/hotel infrastructure right now by allowing hotels to pay a flat annual "commission replacement" instead of a per room night commission, when nights are booked using AMEX's corporate Travel Management Company. This of course locks them in to the agent model further, but makes the pill a bit sweeter. The "book direct" push is a bit wrong-headed as the Airlines have already opened central booking, such that it is a no-brainer for a website to add flights and hotels together, whereas hotels are almost never going to be able to tack on airfare without becoming full service travel agents.
Book direct seems like a no-brainer, until you look at how travel is planned and purchased in the real world.
And none of that is even counting the fact that all the big hotel chains still run their businesses on 30 year old platforms with no end in sight.
Booking non-refundable rooms for the guaranteed low price is also primed for an upset from the reselling app standpoint. If you book a $200 dollar non-refundable room... then you can't make it... you can auction it off on Roomer or others... selling it to someone for $150 recovering some of your loss... And undercutting the "lowest rate" promise at the exact same time.
The whole thing is a mess and direct booking won't solve it... and may make it worse.
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Even more importantly, business travelers aren't generally allowed to buy anything other than a Trip, they have to use some Travel Management Company who is essentially an Online Travel Agent but with a shitty interface and a corporate policy enforcement.
Exactly this. These corporate travel agents are a waste of oxygen, and need to be eliminated. My current employer forces me to use one of these abominations, and each and every trip I book, I always forward along what I would have booked given my own choice. Invariably, what I could have booked myself is cheaper, more flexible, and better meets my own needs.
If you know how to work the system (ITA Matrix, and some of the other search engines) and have a bit of a clue when it comes to location and booking, yo
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Sorry bud but I doubt that's going to get you the reaction you want. For many reasons.
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Re:Travelers want to buy a trip. (Score:4, Informative)
The real disconnect is that Travelers want to buy a trip(airfare, car rental, hotel, attraction), Hoteliers want to sell a stay..
Really? I have the opposite experience. Travel sites keep trying to sell me a trip but their bundles are always overpriced, contain the wrong things, or both. I tell them to go away and let me book the pieces individually.
For corporate travel, it isn't really about what I want anyway. I am forced to use the corporate travel agency but it's not my money so I don't care so much. I still end up declining parts of the bundle and buying outside where it allowed and the bundle version is clearly inferior. I will probably book my hotel directly the next time because the perks are somewhat useful and it is easier than justifying another line on the expense report if I were to pay for them directly.
I find value in the aggregators (Score:1)
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You are ;)
Love the competition (Score:1)
lol (Score:2)
Breaking news: suppliers hate middlemen who take a cut.
Film at 11.
What can possibly be wrong? (Score:2)
I go to the hotels booking site and it tells me: $100 per night
I go to expedia.com and it tells me: $70 per night
I go to booking.com and it tells me: $63 per night
All tell me on the web site: only 3 rooms left, 4 clients are currently looking to book a room.
Then I go to trivago.com and they list me that expedia.com and booking.com actually also had a price for $55 ... on my android device. (Ofc. they list me also other boooking sites that are even cheaper.
And then you remember: "Ah! As a Mac or iPad user, y
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Maybe the hotel figures if someone is going direct, they're not an aggressive shopper and will be more likely to pay whatever they ask.
If they have to give a discount, best to give the discount to the middle man earning a commission. It's a percentage of the booking anyway, so the less you charge, the less commission you pay.
At that point as well, it's better to let the room at a discount than it is to leave it empty. At least on site there's a chance you will get money out of them in the restaurant or fr
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Maybe the hotel figures if someone is going direct, they're not an aggressive shopper and will be more likely to pay whatever they ask.
Yes, that's correct. For the same reason prices are often lower on eBay than on the vendor's webstore. Though it's sometimes the opposite, where the webstore offers a discount similar to the eBay commission.
I'd rather support the travel sites (Score:1)
As someone with no hotel brand allegiance, I'd rather earn my points through hotels.com than a single chain. This allows me to get the best location at an amenity tier that fits my trip. Sometimes I want cheap and sometimes I will pamper myself. When locked into a single hotel brand, it makes it harder to fit those needs.
And I usually check the hotel website directly prior to booking to make sure I'm not getting screwed on price. Almost always the price is the same which validates my decision to keep rackin
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As someone with no hotel brand allegiance, I'd rather earn my points through hotels.com than a single chain. This allows me to get the best location at an amenity tier that fits my trip. Sometimes I want cheap and sometimes I will pamper myself.
Totally agree. I've received a number of free nights from hotels.com, it's better than most hotel's loyalty programs.
We need more aggregators, NOT OTAs (Score:2)
Online Travel Agencies need to die. These are the traditional companies (like Expedia) that can make bookings directly. Aggregators—sites which simply scrape hotel sites to collect their current rates—are great and we need more of them to continue innovating and delivering new and exciting solutions. These sites will just point you straight to the hotel's own website to book directly (without any kind of commission—no affiliate link or any other such nonsense). They can make their mone
Idiocy (Score:4, Interesting)
They seem to think that everybody knows which hotels are located in, let's say Buttfuck, Idaho and know which one is the best, cheapest or with the best location or facilities.
That's not the case.
I use them to _find_ the fuckers in the first place, without those sites, their hotels would be half empty.
One problem for the hotels (Score:3)
Many of these booking sites (including all the big players) have clauses in the contracts that hotels sign when they list on the site that says they aren't allowed to offer the same thing cheaper anywhere else (including the hotels own site). Some jurisdictions have outlawed such practices but others (including here in Australia) haven't yet done so.
So the Hotels may not be able to offer a better deal if you book with them direct than they offer through the booking site without violating the contract.
Disclaimer: I worked at Hotels.com 2007-12 (Score:2)
Lots of people here posting knowledgeably, so I thought I'd add my tuppence.
Here's a few reasons why the hotel chains haven't turned their backs on the likes of Booking.com and Hotels.com (an Expedia Inc company roughly four times smaller than Booking.com BTW) and others:
1. Both are localised in 50+ languages and basically cover the whole world. And when I say "localised", I mean not just the UI language, but the hotels they show you, the landmarks they know are important, and a bunch of other stuff about t
ditch the rent-seeking middle men (Score:2)
To the non-chain motels (Private Hotels) (Score:1)
Online travel sites ruin the service (Score:1)
Booking.con allows multiple bookings months ahead for the same time period, with free cancelling of the reservation only 24hours before the reservation. This is against everybody's interests - the travelers can't see the real availability until the last minute, the hotels get lots of cancels and empty rooms, and the booking site loses comission. It's a lose-lose-lose, but still they do it. Only one who can change this policy is the booking sites.
Not just them (Score:1)
> gatekeepers standing between them and their customers.
Yes! Exactly correct! Now if we could just squeeze out TicketBastard too. The 'convenience fees' on my McCartney tickets amounted to more than I spent to see the other 3 Beatles individually at 3 separate shows. That's not 'convenient' at all!