Booking direct with a hotel vs online travel agent: What gets you a better hotel room rate?

When you book a hotel room through an online travel agent such as Expedia or Booking.com, their slice of whatever you're paying is between 15 and 25 per cent. It can even creep higher if the hotel wants more favourable exposure on the OTA's website.

The person behind the check-in desk gets to see that the guest has made their booking through an OTA, which is the reason those who book through an OTA are more likely to be assigned to a lesser room than those who book direct with the hotel.

The big players are Expedia, which owns Hotels.com, Wotif, Hotwire.com, trivago, Orbitz, HomeAway and Venere among others, and Priceline, which owns Booking.com, KAYAK and agoda.com plus several more.

Between them Expedia and Priceline now control the lion's share of the online hotel booking market in Australia.

Contractual arrangements prevent hotels from offering a lower rate on their own website than those advertised on OTA websites. This is known as parity pricing and it's essential for the success of the OTA's business model.

Their argument is that they enable hotels to enhance and promote their business, their percentage is their reward for doing so and they would not be in business if hotels could undercut them by advertising a lower rate than that on the OTA's website.

However, in September the Australian Competition and Consumer Commission ruled that hotels can offer a lower price than that on the OTA websites but only to guests who make their booking by calling the hotel direct. This applies only to hotels within Australia.

Comments