Hotels have a love-hate relationship with online travel agencies like Expedia and Hotels.com. On the one hand, hotels depend on those sales channels for a significant percentage of their bookings. On the other hand, those bookings come at a price, literally: The hotels must pay the OTAs a commission, which makes indirect bookings less profitable.
If the hotels had their druthers, all bookings would be made directly, via the hotels’ websites or mobile apps. That means no commissions on the sales, and the hotel has the opportunity to up-sell and cross-sell its services during the booking process.
To ensure they’re maximizing the amount of business that’s being booked directly, the hotels have taken a multi-pronged approach. First was the lowest-price guarantee, invoked to assure travellers that the prices shown on the hotels’ websites are the lowest available anywhere; no need to waste time surfing the OTA sites. The second was the linkage of loyalty programs with direct bookings. OTA bookings do not earn loyalty points. And, taking the best-rate guarantee a step further, loyalty program members receive a discount on room rates, but only when booking directly.
Imagine this scenario: You need a hotel in a city you aren’t familiar with. Maybe you’re particularly fond of a certain hotel chain. Are you booking directly with the hotel? If not, why not?
Perhaps you got sucked into those third-party online travel agency (OTA) sites like Expedia or Hotels.com and thought you’d get a better price or a better deal. Don’t feel bad—you’re one of the thousands of travellers who got pulled in by their slick ad campaigns.
We’re here to let you in on a secret: booking directly with a hotel is always the better option. The perks of dealing directly with the hotel far outweigh any “savings” you think you’re getting by booking with an OTA, despite what their ads may scream.
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Here are the reasons why booking directly with a hotel should be your first choice.
While most people think they’re getting a great deal on a hotel with an OTA, these sites are not “discount sites.” Rate parity agreements between hotels and OTAs dictate that the price shown for a specific room must be the same no matter where it’s sold. This means that if you’re looking at a room on Hilton.com and Booking.com, the base rate for that room will be the same on both sites.
You may be asking yourself, “Then why do all the OTA ad campaigns claim to have the best prices?” Here’s the rub: they can all claim to have the “best” price because they all have the same price—because of the rate parity rules.
So how does booking direct get you better prices? The answer lies with loyalty rates. Many hotel brands offer discounted rates to members of their loyalty programs. These lower rates are allowed to bypass the price parity agreements because they are sold to “closed user groups.” This just means you must be a member of the program to snag these deals. Not to worry though, these programs are completely free to join and don’t obligate you to spend any money before you can take advantage of the lower rates.
Exclusive Member Rates
Hotels offer member-only rates that are a few dollars cheaper than the normal rate nightly rate.
IHG Rewards Club, for instance, offers an exclusive member discount that is a few dollars cheaper than the non-member rate and can also be cheaper than the third party rate.
The members-only rate at the Holiday Inn Express Orlando at SeaWorld is $106.82 per night. The same room costs $109 for non-IHG members if booked directly and also on Priceline and Hotels.com.
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Booking Fees and Commission
When you make bookings via online booking sites hotels, need to pay commission between 10 % to 25 % of the total booking value! By calling the hotel directly, hotels save on such commissions/fees, and they would be happy to extend you a discount for such direct bookings.
If you have not done this before, try calling or email the hotel directly and simply ask for a better rate, you can often get a deal!
No Lost Reservations
One of the most common complaints we hear from people about OTAs is that the hotel can’t find their reservation once they arrive. Maybe that’s even happened to you. If not, imagine how infuriating that would be!
Unfortunately, this is not uncommon for travellers who book their reservations through OTA sites. By booking on a third-party site like Priceline or Travelocity, you’re not a customer of the hotel, you’re a customer of the OTA. Sometimes, everything goes smoothly, and the OTA passes over all your information to the hotel. But what if something gets lost? It happens. Far too often.
Avoid taking this risk by booking your stay directly on the hotel’s website. You’ll share your personal information and credit card details with the hotel only, and you’ll be sure your reservation won’t get lost.
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Flexible Terms and Conditions
We’ve all experienced hiccups in our travel plans that have resulted in delayed or even cancelled trips. If you book through an OTA, you can forget about getting a refund for any un-stayed nights. Most of these booking sites have a no-refund policy, and they won’t let you cancel or modify your reservation if you have to.
When you book directly with the hotel, you’ll be treated with more flexibility and understanding. Delays and cancellations happen, and hotels know this. You won’t have to go through the hassle of dealing with hard-to-reach OTA customer service, and you’ll be able to reschedule or cancel your reservation quicker if you have a cancelled flight or come down with the flu. If you can’t get the stay refunded, since you booked direct, you’ll still have better leverage to negotiate to trade in the cancelled room for a future stay
Any Special occasion during the stay?
If it’s your wedding night, anniversary or birthday, hotels will try to accommodate your special day as best they can. But If you’re booking through a third party, don’t expect your request to have made it to the hotel.
And also hotels might not provide such amenities or facilities for bookings from the third party as they need to save on cost or commissions paid to these booking sites already.
Want to Amend or change your booking?
There would be occasions when you want to prepone or postpone your stay, But if you have made your booking via an online booking site, then the hotel might not allow you to do this, and they will simply ask you to make such changes directly from those booking sites. In some cases, you might have to pay a higher rate for the new date!
But if you have booked directly with the hotel, then they would be happy to make such amendments as per availability and most importantly without any additional charges, hassles, difficulties or conditions.
Cancellations and No-Show Fees!
In case if you have to cancel your reservation and you are not falling into the free cancellation period, then the online booking sites or OTA’s won’t allow you for free cancellation as they have a strict cancellation policy.
On the other hand, if you have booked directly with the hotel then for genuine reasons they can wave off cancellations fees. Hotels also allow adjusting the cancellation fee or deposit which you have paid for any future stay of yours.
Better Rooms, Better Service
Hotel room assignments and special requests are prioritized for those who book directly. So, asking for a room on a higher floor or choosing one or two beds is easier to arrange this way. Alternatively, those who book through OTAs are more likely to get stuck with the “ice machine rooms.”
By booking on the hotel’s website, you have the opportunity to make special room requests when you book or once you arrive. Need to ensure your room has a minifridge? Just ask. Prefer a room far away from the elevator? Working directly with the hotel gives you the flexibility to ask for these types of requests and a greater likelihood that they’ll accommodate you.
Hotels only set aside a certain block of rooms for third-party platforms. Hotels keep the best rooms and most variety for themselves to sell directly. This can make a big difference when it’s a property where a standard room can vary greatly in size, which is especially common in old properties constructed ages ago when rooms (and, well, people too) were smaller. A little online research can often unearth what type of room might be linked to booking through a third-party site, like this petite room in Boston from Priceline.
Sometimes, hotels keep luxury rooms and amenity packages to themselves. It can be cheaper to book hotels when you need to buy a breakfast package, parking, or even ticket bundles to local attractions.
Third-party sites might offer these packages as well. However, the price can be different.
Another direct booking perk is that you can choose additional services that go beyond free breakfast. Hotels are getting more selective with their WiFi service. Some will only grant free WiFi to guests who booked direct, while OTA bookers will have to pay a fee.
Bottom line: for the best room and the best service, book direct.
Loyalty and Reward Points
Want even better customer service? Join the hotel’s loyalty program. Hotels love their loyalty members, and they’ll let you know it. Upon check-in, many hotels will offer their loyalty guests free food and beverage credits. You’ll also be eligible for free room upgrades if the hotel isn’t sold out. Some hotels even have designated lounge areas for preferred guests with unlimited beverages and snacks. Who doesn’t like being “preferred!”
Even if you pay for your room with cash on a third party site, some hotel programs might not credit your account with rewards points unless you book directly. Unlike airline frequent flier programs that will give you points on every flight, hotel policies are more stringent.
Even if you find a better deal or pay the same price on a third party site, not earning points can end up costing you money down the road. To earn loyalty points, you will want to book directly with the hotel.
Several third-party sites, including Expedia and Hotels.com, have their own rewards system that can allow you to earn free hotel nights.
In addition, hotels offer loyalty bonuses and additional incentives for bookings made through the hotel’s website. With each stay, rack up points and redeem them for free stays on future trips.
And like we said before, loyalty members get access to the lowest hotel rates on the market. Knowing that there’s really no reason not to sign up for one of these programs. Better yet, join them all! That way you’ll get the best rates no matter where you stay.
When It’s Cheaper to Book Hotels Through Third-Party Sites?
There are a few instances it’s cheaper to book hotels using a third party site:
- Last-minute bookings
- Mystery Deals
- Travel packages
- Non-cancelable reservations
- Local hotels
Hotwire and Priceline Express Deals
One time it can be cheaper to book a hotel with a third party site is when you book a Hotwire or Priceline Express Deal. The only downside is that you don’t know the name of the hotel until after you have paid.
Priceline claims you can save up to 60% with their Express Deals. Hotwire Hot Rates can also save you up to 60% if you wait until the last minute to book. As it’s easier for hotels to lower the price on unfilled rooms through third party mystery deals, scour these offers when you want to book on the same day or within the next few days.
Mystery deals can save you money by booking in advance, but, you will save the most money by snapping up the same day deal. Booking a “today only” special can be worth the savings, even if you don’t collect the hotel loyalty points.
Keep in mind that mystery deals cannot be cancelled.
Staying at a Local Hotel
Local and independent hotels can be cheaper than national brands and just as hospitable. With a chain hotel, you can expect the same experience each time, and you can also pay more for the uniformity.
To attract visitors that might be wary of staying in “unfamiliar surroundings,” local hotels can offer slightly better rates than their competitors.
While you might not earn loyalty points from independent hotels, you can still get free nights when you book through Expedia or Hotels.com that offer free hotel nights after a predetermined amount of stays.
Hotels also offer travel packages that can bundle flights, hotel nights, and rental cars to save you money. You might have an advantage with third-party travel packages because some hotels only partner with specific airlines.
Third-party travel sites make it possible to bundle any flight with any hotel. If you like this flexibility and understand that packages are usually non-refundable, the savings can be well worth it.
Since package deals are usually non-refundable, you should still price each travel expense separately and also compare the package hotel rate to cancelable nightly rates from the third-party site and the hotel website.
Every big hotel brand also has properties overseas, but that doesn’t mean they are always the best deals. Finding overseas sleeping accommodations since chain hotels might only have locations in the largest cities. Staying at a local hotel might be a better option if you know where to look.
The same third-party booking sites you use to browse domestic hotel listings can be used to book international hotel nights. You might also consider using Agoda if you plan on travelling to Asia where you can search hostels, local brands, and international brands all in one place.
As some international destinations might not be as “commercialized” as the U.S. hotel industry is, you might decide to use third-party sites just for international travel.
Step, or rather navigate, away from Expedia, Hotels.com and their ilk. The best room, rate, service and stay come right from booking with the hotel directly.
While third-party booking sites can be a useful starting point for researching what hotels are available in certain destinations and at what price points, that’s probably the extent to which they should be used. Reserving directly with a hotel is the safest and best bet for reasons ranging from receiving special treatment to direct recourse should something go wrong.
There are no hard-fast rules for when it’s cheaper to book hotels directly or when to use a third-party site. Hotels like to reward members for their loyalty. Third-party sites can be better when you want to scoop up last-minute specials or do not have a preference for a particular brand. Keeping these tips in mind will help you compare hotel prices for your next stay.