I’m a receptionist, handle about 150 bookings a week. Two-thirds direct, the other one-third are third-party booking sites. Booking.com (Agoda, Priceline, Kayak) makes up about half of that one-third. The other half of the one-third is equally split between Expedia (hotels.com, Orbitz, Travelocity, Wotif, Trivago) and a big bunch of various corporate travel agents and agencies.
Despite the proliferation of booking sites on the web, all of them are either part of Bookings Holdings (Booking.com’s parent company, 17bln revenue last year), or part of Expedia Group (11bln revenue last year), and I would expect the distributions of third party bookings at most hotels to roughly reflect that revenue split. There is one other competing group, Trip.com (5bln), but they mostly service China and don’t have as much penetration into Western markets as far as I know.
In a hotel like yours, does making the reservation direct, rather than using third-party services, makes any difference (i.e., rates, more available rooms, etc)?
The only difference is price. The money we get from a third-party site after they take their commission comes out to the same as what we get direct, so the guest is simply paying the third-party site’s commission (usually around 10-12%). It’s that way because we set the price on their channel. The only other downside is changing your booking has to go through them instead of us, and cancellations have to abide by their policies in addition to ours. In practice this doesn’t make much difference to the end result, but it sometimes adds a bit of friction for some guests.
Room availability, staff service, everything else is identical. We have no incentive to encourage you to cut out the middleman and thus we don’t, but to my knowledge we also aren’t prohibited from doing that. Customers do sometimes ask about this stuff and I say “if you know exactly where you want to stay, might as well book direct to save a few dollars, but those sites offer a real service in helping you find a good place when you’re unfamiliar with the area”. Customers also sometimes say they can get a better rate on an OTA than what we are offering, and I always encourage them to book with whatever method gets them the best deal - “we honor all bookings and you will get the exact same room either way”. Usually that better price does not materialize, the guest realizes they were looking at a cheaper room or even a different hotel, though it does happen from time to time even with us (which I have never been able to understand; the OTA must simply be choosing to lose money on those bookings for some reason). We do not overbook, nor do we allow OTAs to overbook.
(I don’t know how representative this is of hotels in general; the owner is particularly upstanding and moral, kind of a “pillar of the community” guy, so this might be an unusually fair setup. But I’ve never heard a customer say we’re unusually fair, so I think this probably is pretty common.)
Essentially the role OTAs play in our case is they are a search engine and perhaps a more convenient booking process, nothing more. I believe this is a common way hotels use OTAs, though that’s just my impression.
The other common way hotels use OTAs is more tightly integrated, OTAs get to do variable pricing and probably other things I don’t know about since we don’t join any of those programs. I can’t speak to those arrangements but I imagine that’s what is going on when the OTA can offer you a better rate than the hotel direct, which definitely does happen with some hotels. That might also be what is going on when you ask questions about OTA rates and it feels like the staff member is under a gag order, but again, I do not know anything at all about that mode of OTA integration.
Thanks for your explanation, I love to learn more about the businesses I use through their employees.
About room availability, I thought that if Booking or any other third-party says "this hotel has 5 rooms left", it didn't necessarily mean the hotel had actually only 5 rooms available for the dates, but maybe there were only 5 rooms left from the "batch" the hotel put in Booking (my assumption was that, to make the orchestration of reservations between different platforms easier, hotels divided the number of rooms between them, or something like that...)
I can’t speak to those spooky warnings of “only X left” from OTAs, I assume they’re technically true in some way but heavily massaged to increase anxiety because that improves conversion.
Orchestrating reservations is a lot more streamlined than you’re imagining. All sources have access to the reservation management system and can poll it for availability, while the booking is in progress it simply blocks out the booking with a “pending” booking. When the booking is made, the source adds it to the hotel’s system themselves. I have had customer support with both OTAs on the phone and heard them say “I can see you have this many rooms available…”. So if we have 7 rooms left, Expedia knows we have 7 rooms, Booking.com knows we have 7, and we know we have 7.
The only exception is if we have rooms with potential maintenance issues (air conditioners, TVs, and hot water systems have Heisenbugs too!), we will sometimes reserve one room of that type in case we need to move a guest. In that case, we would have 8 rooms available but Expedia and Booking.com would see 7.
> it didn't necessarily mean the hotel had actually only 5 rooms available for the dates, but maybe there were only 5 rooms left from the "batch" the hotel put in Booking
Booking.com doesn't know about any rooms that are not made available to them by the hotel, so everything is based on that. In my experience, most hotels just have all their rooms available at all times for booking.com - but maybe some of them experiment with availability to sell a bit more themselves.
The "A person just booked..." and "Only 2 rooms left" messages that booking.com uses to annoy customers are actually correct. I've worked on the other side, and seen from the backend that they don't lie.
> (my assumption was that, to make the orchestration of reservations between different platforms easier, hotels divided the number of rooms between them, or something like that...)
No, they use hotel software that integrates and synchronizes instantly with all platforms, their own web site and the front desk.
> No, they use hotel software that integrates and synchronizes instantly with all platforms, their own web site and the front desk.
Yes, I think that's feasible. However, I sometimes stay at medium to small size hotels (doing my reservation through Booking or other 3rd parties) but when I get to the place, I can see them managing my stay using Excel files or similar "almost by hand" methods. So I was skeptical that those kind of places had actually a system that can automatically synchronize with all the third party platforms they use in real time.
Yes, there is space for small niche sites with certain angles, but all of those sites will still be owned by one of the big two parents. There isn’t even much space for a niche player intending to eventually get bought out by one of the big groups like you see in some software fields, because hotels are pretty risk-averse in general and won’t just hand out access to their reservation channels to small players easily.
I did some work on hotel booking for one of the the "small" players in the space (at the time, a distant third in the EU after Booking/Expedia). The majority of their room availability was sourced through the two big players. That's probably going to be the case for most aggregators, and there's a fair chance that your favorite non-Booking/Expedia aggregator is actually just selling you their content and collecting around 10%.
I used to use various sites, but I realized that if I concentrated on Marriott/Bonvoy I could reach their highest status level (Ambassador). I've almost reached the dollar value and night count to retain my status through 2024, and it's only April!
I'm quite happy with them. I get a lot of free upgrades, lots of points for free nights, free breakfast, late checkout, etc. And if anything is the least bit out of order, they fix it for me.
I hate AirBnb. There are lot of bad actors now, and AirBnb customer support is useless. Even if I need a flat for a long period (like a month or more), I try to find an independent agency and use them. Searching on AirBnb can be a good starting point: if the listing shows an agency name you can usually find them on Google. AirBnb "protection" is useless anyway, so I don't understand why I should pay such a huge premium for it.
Booking.com is fine. I didn't get stressed out about the messages that the author writes about. But now I only use Booking.com when there is no Bonvoy hotel in the place I'm going. I have never had to escalate anything to Booking, but in general the places in booking are as described. There aren't as many bad actors as there are with AirBnb.
EDIT: I'm not employed. All my travel is personal travel paid out my own pocket.
Loyalty programs are just a scam for you and the hotel to rip off your employer, right? Or are you really getting a cheaper/better deal than using a marketplace such as booking.com
Generally, no, loyalty programs from hotels are not a scam. Or, I guess, it’s probably most accurate to say that they do not have to be a scam to be profitable, some places may run them as a scam anyway.
Speaking from the other side of the desk, guests can vary wildly in how much they cost to accommodate. A good guest (mostly one who cleans up after themselves) can cost as little as one-quarter of the average guest, that significantly improves the margin on the room and we can definitely afford to pass some of those savings on to you once we know you’re a good guest.
Speaking from a broader view, the kind of guest who stays often enough to meet loyalty targets is usually travelling for work. Their demand for accommodation is inelastic (job needs them in this place for this long) but very substitutable (pretty much any clean room will do). It makes sense to sacrifice some margin to capture that.
So there’s a few good reasons why hotels or hotel chains can offer real discounts in their loyalty programs.
Right, and as a hotel/airline, if given the choice between upsetting two paying customers.. who do you upset: someone who has done 100 nights/flights with you this year, or the guy who got a last minute rate from an online travel site and picked you because you were $5 cheaper?
The 100 nights/flights guy is also probably a much lower touch customer as they are just in&out for work, and "know how things work" generally so doesn't have unreasonable expectations for what they have paid.
It can go both ways. The 100 nights/flights person gets really familiar/routined to what's on offer and is going to complain when you change the brand of rum. Corporate expects you to personally welcome them, read their preference notes and make sure you give them something to bring to their kids because it's their birthday.
You're expected to upgrade them to the best available room/seat but they complain to corporate when someone that does 101/year gets the upgrade instead. If their flight gets cancelled/delayed because they flew into a known hurricane, you better watch out for it and proactively re-book them or hand out food/hotel vouchers.
The $5 discount OTA person... give them the crap room/seat that nobody else wants and just ignore their whining.
Just based on my experience of being the latter and trolling flyertalk...
I mean thats one dark way to look at hotel loyalty programs.
Another way to look at them is they are a gamified & transparent method of becoming "a regular" at a hotel/airline and generally get in return, commensurate better product/treatment/service, especially in cases of adverse events like short notice changes, delays, cancellations, etc.
Just like if you go to the same pub/restaurant in your hometown over & over, you'll get recognized as a regular.. and maybe on occasion get some free apps, access to a table when they might otherwise say they are full, and friendlier treatment. Except at a national/global scale across a brands properties/planes/airports/etc.
It is interesting to me that travel is one of the few remaining places where customer loyalty is in any way rewarded. And why shouldn't it be?
Sometimes it's a tax thing. The points usually don't count as a taxable benefit, so even if you're travelling for your own incorporated business, it's a way to squeeze a few percent of your expenses out as tax-free income.
Or at least a tax-free retirement benefit (not bad if you have an employer).
But it is funny to read on the travel discussion boards how much road-warriors hate hotel/airline X Y or Z because their points program isn't great, but they're substantially cheaper.
Some country's tax policies consider employer-paid meals a (partly/fully) taxable benefit, but if the hotel provides it for free, that's cool.
Same thing with credit card points. That's a huge one for squeezing out tax-free income out of your business.
I guess that depends on the country. In several European countries I have worked the points are property of the employer or they are taxable benefits. However, it is widely practiced and probably rarely prosecuted that employees just use them for their private fun and don't declare anything to the tax office.
However, if you get into any quarrel with your employer that can be fatal. Now they have an good argument to fire you with any compensation because of your wrongdoing. This had recently happened to the head of a Finnish government agency, ironically enough the audit office.
Part of the push for loyalty programs is that Booking (and Expedia) have tried to have a "most favored nation" clause in their agreements with hotels that states that hotels can't advertise a lower price elsewhere...unless they have an existing relationship with the customer. Hotels are often paying 20%+ in commission, so they're highly incented to get you to sign up for their program and give you free wifi or whatever and a few bucks off the room price.
EU regulation is pushing back on the MFN clauses, but I'm not sure what the current state of things is.
Booking.com's entire business is dependent on them being able to advertise the lowest price. If not, then all hotels would just use booking.com for visibility and get all reservations themselves. In short: Booking.com would pretty much instantly go out of business.
If Booking.com wasn't charging any commissions, there would be a strong reason reason for anyone (hotels or guests) to avoid them.
If the difference was small enough, many guests would still book through booking.com instead of the hotel out of ignorance, not caring enough, or because booking provides a better experience.
It'd cut their profits by limiting the commissions they can charge, but I don't see why they would go out of business.
This is definitely incorrect (has no customer support). Maybe they can choose to fuck you over sometimes, but I have definitely used their customer support as recently as december 2022 (first to call from my destination for some onsite help, then later after the trip to get money back). I wouldn't say they were seamless (that would be if there was no problem at all), but definitely good enough.
I've been booking using booking.com for several years, but not exclusively.
As the author notes, it was not always full of dark patterns as it is today... and it's always been reliable and easy to book, view locations, compare prices etc. One of the best UIs for booking hotels I've found.
I sometimes check AirBnb as well (if hotel is not my favourite option for some trip) and even the hotel's websites directly. Booking.com seems to get lower prices or at least match the hotels in most cases.
There are lots of other websites for booking hotels. But after trying a few, I don't see any advantage over booking.com so that's what I use (and ignore the dark patterns if possible).
Just anecdata from the other side (i was a hotel manager for the last 7 years): BDC has nigh-unbeatably good SEO, you can't beat it even with e.g. searching for
"[hotel name] in [city]", 99% of the time. The other 1% is Expedia in the search results :D
A note on alternatives - loads of former competitors have been bought by either BDC or EXP, i.e. hotels.com is just Expedia, kayak or priceline are BDC, etc.
I have never had anything but bad experiences with any non-first-party booker; I now book only directly with {hotels, airlines, rental car companies}. It's just not worth the couple bucks you sometimes save; if there's a problem nobody is willing to be the one to fix it.
Find places online, then call to reserve. Just last week I called a place I found on Booking and found they had a room at half the price shown online. This is in France though where there seem to be rules about how rates are advertised.
I’ve stayed at a few places where when I went to the front desk to extend my stay, they discretely told me to book via Booking.com rather than with them, because I’d get a better rate that way, and they were right. Like flight pricing, hotel room and channel pricing is complicated.
Booking.com have a price guarantee, and a good one, so you will rarely get a better price from the hotel _unless you’re a member of their loyalty programme_ … so for the big hotel chains, sign up to those and book via their apps
I guess the front desk has no discretion to give discounts, in smaller places the owner can give you the booking.com price because it means they don't have to give a cut (is it 30%?) to the bastards from Amsterdam.
I remember walking into a hotel at around 10 PM (I was road-tripping around Iceland and could've slept in the car too) and asking if they'd give me a discount (1 room more to sell), and the front desk person clicked around on a lot on his computer and when a colleague asked him, he said "I'll just give him the agency rate.".
I believe commissions are pretty standardized at 10-12% by now; OTAs have been competing on commission in the fight to sign up hotels.
The most likely reason you might get a better rate from a third-party booking site than from the hotel direct is if the hotel allows the site to do variable pricing to try to capture more willingness-to-pay; sometimes that variable pricing will work out in your favour.
I wonder if commissions have dropped a lot in the past ~5 years, or if your hotel just has a better rate. I remember hearing that average commission back then was in the 20% range (less for major chains with negotiating power), and I know that Booking/Expedia would be happy to kick down 8-12% for any traffic people referred to them. Any startup with zero volume could sign up for an affiliate account to get access to Expedia's availability and booking APIs and get 8% for each booking, and larger customers could negotiate that upwards. I think I saw 14% for one supplier, but I don't remember if that was Booking or Expedia or a smaller company.
That's incorrect. It's never been as high as 20%. That's a claim that I've seen frequently over the years on HN, but it was never the case, at least at Booking.com.
They have a few mechanisms to try and drive up commission from the usual 12%, though. They have a preferred program which boosts search results but costs
3%> They would have loved to drop it to better tune search, but they were addicted to the incremental revenue.
At various times there were also dynamic ranking boost efforts, where a hotel could increase boost their ranking (with a preview) by increasing the commission percentage. IIRC that went as high as 18%.
Both of those applied to the default search results order ONLY. If you clicked "order by price" or similar then you simply got that.
The exception I've found for flights is that sometimes the OTAs can setup selling-airline and codeshare combinations that would be impossible to do direct. e.g. an airline won't book flights on its own metal through its codeshare partners. Maybe I could call in and get it, but that's a hunt I don't wish to do.
Had a flight on all American Airlines metal that the OTA purchased through Iberian airlines on a mix of AA bookings and Finnair codeshares. The flight did not touch Finland or Spain.
I try to avoid multiple carriers after getting caught out missing a flight in Dubai due to maintenance delays in Sydney. With a single carrier, the carrier has to pay for accomodation etcetera and it is their problem to get you to your destination.
With multiple carriers, sometimes things become your problem.
If you buy multiple independent tickets to get the cheapest fares possible, you can be really screwed.
So it really depends on your appetite for risk. I sometimes choose the lowest risk to get to my destination, and a high risk option on the way home where I am less time constrained and can be more flexible dealing with any issues. New Zealand is the antipodes to Europe and can take 24 hours to arrive (including stopovers), so any flight problems are significantly worse than for many other countries.
All flights were on one carrier: American Airlines. AA's in an alliance with Iberian, Finnair and others. But I guess each one was selling the same flights, with the same rights and everything, at different prices, on one ticket.
But I do see Google's OTA listing offering things like you say where you're not protected in the event of a missed connection delay and have some shady insurer that's supposed to 'protect' you outside of the airlines.
Never heard of booking.com until today, never used it. I sometimes book directly with a hotel or use Expedia or whatever else returns the cheapest price.
Despite the proliferation of booking sites on the web, all of them are either part of Bookings Holdings (Booking.com’s parent company, 17bln revenue last year), or part of Expedia Group (11bln revenue last year), and I would expect the distributions of third party bookings at most hotels to roughly reflect that revenue split. There is one other competing group, Trip.com (5bln), but they mostly service China and don’t have as much penetration into Western markets as far as I know.