Hotel chains prefer when you book directly through them, as they pay commission to online travel agencies such as Booking.com or Expedia.
Hotel chains have repeatedly told us that they will meet or beat pricing found via online travel agencies, in a practice they call a “best rate guarantee”. However, the room type and corresponding amenities found on an OTA must exactly match that of one found directly on a hotel chain’s website, and due in part to specific wording, available room types, and amenities, it can be a tricky dance to actually get a hotel chain to honor the claim.
Strong-arming customers by withholding elite benefits for those who book elsewhere (and sometimes better rooms, albeit not something that is advertised) is common amongst the chains, so members of hotel loyalty programs don’t book with third-party websites as often as they probably would otherwise.
It can be frustrating to find that the lowest price for a hotel is on Expedia, when you’d rather just book right from a hotel’s website. Many hotels have agreements with OTAs stating that they cannot offer lower prices than the OTA, so it can be frustrating for them as well. These parity clauses all but guarantee that online travel agencies have an advantage in addition to the extra visibility they get from being a one-stop-shop.
However, there’s been an interesting effort made recently to allow hotels more freedom. I just came across a few articles (here, here, here) stating that Swiss hotels operating on booking.com have been given the approval by Swiss Parliament to offer lower prices directly to their customers.
Rather than finding the lowest rate on an OTA and gritting your teeth that you’ll pay more when booking directly with the hotel, you might start seeing that the hotel’s website really does have the lowest rates.
This in turn on a bigger scale might lower the value of the online travel agency as a booking platform and encourage more customers to use direct hotel websites in their accommodation inquiries.
A quick search on Booking.com turns up an available 11,086 hotels. That’s a lot of properties.
Some are upset by Parliament’s decision, and feel that the OTAs deserve to have the lowest prices since they offer a seamless booking process that small/medium sized hotels wouldn’t ordinarily be able to provide.
Is this a bad thing for customers, making them go to several websites before booking a hotel to make sure they get the best rate? Is it unfair to the OTA’s doing the advertising to have customers then switch over to a hotel’s website to book directly with them?
I see it as a good shift in the right direction for both customers and hotel chains, offering them more power and choices.
I’m just touching on the tip of the iceberg here though, and folks with a finger on the pulse of the industry like Gary at View from the Wing may also have more insight into whether or not this has the potential to be a big deal.
The decision made by Parliament was just one month ago today, on September 20, 2017. There may have been updates since then that I’m not aware of, and this decision so far only affects Swiss hotels. I’m curious if anything similar has occurred with other countries yet as well.
What do you think about giving hotels more flexibility with their pricing in relation to that which is offered through online travel agencies?