It is now a common reflex to go to Booking or another online travel agency to book a hotel, make your choice and book thinking that you got the best price. But is this really the case?
Why the Booking reflex?
First of all, why this reflex to rush headlong to the OTAs (Online Travel Agencies), Booking first.
First of all, because it’s easier and there is an almost unlimited choice. Who today goes to book directly on the website of a hotel or a brand? Loyalty program members who do not want to see their benefits not applied because they have booked through the “wrong” channel.
Secondly, because as soon as you type a search in Google, it is usually the OTAs that come up at the top of the page. Why is that? Because they have impressive budgets that they use for this, more than any hotel or even the biggest chains. This remains true even if, as we will see later Google Hotel Search puts OTAs and hoteliers on the same level…provided that hoteliers set up their systems to show all their inventory and all their prices…which is not yet obvious for many independents who do not have sufficient technical mastery of these tools. Will Google kill the OTAs? Maybe one day…
Finally, because these sites have the reputation of being cheaper and systematically offering the best prices.
All this put together means that going to Booking and its competitors becomes such a reflex that we don’t even take the time to look elsewhere and compare.
Are Booking and OTAs cheaper?
In order to know if we are right to trust Booking and its competitors, we should check the facts.
This is just an experience at one time but it confirms my experience: in general Booking and OTAs are rarely cheaper than booking with the hotel directly...and even when they are it’s not definitive.
But to summarize:
- Booking is rarely cheaper than hotels even if it can happen
- Some OTAs are cheaper than Booking (but not always as reliable or may advertise “misleading” prices.
Now we will see why and, more importantly, how to optimize your bookings.
Why isn’t Booking cheaper than hotels?
In fact it is funny to ask the question in this way because it would be logical that the one who markets his product directly is the cheapest and that any other situation is exceptional.
What Booking promises to hotels is visibility! Without it a “small” hotel would be invisible to the general public. And since everyone is on Booking, not being on it even if you have a name that would allow you to do without it is a commercial suicide since all the hotels are on it and all the customers go there. Vicious circles.
What does Booking require from hotels? Low prices. The lowest prices in their inventory. Even worse, until recently, Booking prohibited them from marketing their best rates outside of Booking. These practices are now prohibited, at least in France.
What is the price for the hotels? A commission on sales. For Booking we are around 18-20% depending on the offer. For those who join their preferred hotel program the commission on each additional sale due to the program can range from 25% to 65%.
Technically speaking a hotel can now market directly at better prices than it gives to Booking or other OTAs and there is no reason for Booking to offer better rates than hoteliers unless they are not vigilant.
Why Booking can be cheaper than hotels
With the generalization of price comparisons, the setting of rates and, in a way, the yield management of the hotel has become an indispensable expertise, as in the airline industry. If the big properties and a fortiori the big chains are now equipped to do so, the small independent hotelier cannot spend his life online to constantly adapt to the prices proposed by the OTAs. Even if they don’t have strong enough shoulders to impose their rates to Booking. When a channel that represents 70% of your sales calls you to tell you to lower your prices or you will be poorly positioned in its results, what can you do when you are independent and without great marketing resources?
On the other hand, since Booking no longer has the right to prohibit hoteliers from marketing their best prices directly, some of them have even started to integrate the commission charged by the site into the rates they offer through it. But not everyone dares to do so yet.
But let’s be clear: if a hotelier offers you a higher rate than Booking or an OTA, it will never be a voluntary policy on his part, but generally a negligence. And it can be fixed.
A hotelier can always align its prices with Booking
Let’s take the example of a room offered at 100€ on Booking. If you book through this channel only 80€ will go to the hotelier.
This means that the hotelier can or offer the same price directly as on Booking in which case he will make a higher margin by selling directly but will not push the customer to book through this channel because for the customer there is no difference.either lower the price it offers on its direct channel. In this second case, even if he goes down to 80€, he will make the same margin as by selling at 100 on Booking.
It is therefore in his interest to match the Booking price or even lower his direct sales rate, it is financially more interesting for him to sell cheaper directly than more expensive on Booking.
All major chains are well organized for this with the so-called “Best Rate Garantee” mechanisms. As soon as you find a cheaper price elsewhere when you have booked with them, they automatically match it and even give you nice gifts on top.
But if you are looking for an independent hotel (but this works for all in fact) know that if you find a Booking (or other) rate cheaper than what it offers on its site a simple phone call will be enough for him to align his rate because, again, it will earn more by selling you a room up to 20% cheaper than Booking than by letting you go through the website.
In addition, almost all the chains offer their loyalty program members direct rates that are 5 to 10% lower than their public prices.
Going directly through the hotel is not only the guarantee to get the best price (contrary to what one often thinks) but it is also to show a certain ethic when we see how Booking and Co extort them.
How to find the cheapest rate for a hotel?
Finally, as you have understood, it is quite simple.
If you don’t have any idea of the hotel you want to go to, start by doing a search in Google Hotel Search which will allow you to compare the prices of the hoteliers and those of Booking and other OTAs.
But even if you already know where you want to go, use Google Hotel Search to compare prices.
If the hotel is cheaper directly and well book directly on the website of the hotel or by calling them.
If the hotel is more expensive directly, take a screenshot of the Booking rate (or other) and contact them. Not only will they align themselves but they will be very happy with your approach. I remember one who even offered me breakfast to thank me.
If, after booking, you find it cheaper online elsewhere, use the “Best Rate Garantee“.
That’s the minimum.
We also advise you to join the loyalty programs of the main chains you use. It’s free and it can be very useful. I am a member of Marriott, Intercontinental, Hilton, Radisson, Choice Hotels and Accor.
This will allow you to benefit from public prices that are at least 5 or 10% lower than those offered to non-members, not to mention occasional promotions. Then comes the whole list of advantages you get when you are really loyal to a brand but after that it’s a choice: there are those who will look for the “best” hotel every time and those who will limit themselves to what their favorite program offers them. A question of philosophy but at Travelguys we have made our choice.