This week I wanted to write about 3rd party booking systems and OTAs and how they work.
To start off, a 3rd party system is basically a way for you to book a hotel room without having to speak to the hotel directly. OTA which are online travel agencies (Expedia, booking.com, hotels.com, Hotwire and so many more, are the most common ways people book hotel rooms these days. The main reason for that is they are so easy to use and they market themselves really well. They are actually very good at making people believe they are getting a great deal when really they are not.
Hotels use these platforms more than actual physical travel agents. OTAs is such a huge industry. Based on a research done by Allied Market Research “Online Travel Market is Estimated to Generate $1,091 Billion, Globally, by 2022”
The way OTA’s work is hotels will actually sell their rooms for a low price and then Expedia and booking.com … Will then go on to resell those rooms to the consumer. Obviously, these rooms will be resold at a much higher price. This is the way most bog hotels and chains will work. Many independent and small hotels will work in a different way. They will actually let OTAs sell the rooms for them but without buying them in advance. This works like real estate agents work. You’re as an agent can try and sell my rooms and I (The hotel) will give you a commission. What the average consumer does not know is that these commission rates can be quite high and this is money straight out the of the hotel’s profit.
Having said all that, Hotel employees know how much you paid for your room and we also know how much we have to pay the OTAs in commissions. Many times hotel employees will also get a small cut of the room sales if you book directly with them. This means that when it comes down to giving away free stuff: (Upgrades, bottles of wine, dinner, breakfast, late check out, parking) we will not give it to you, we will give it to the people who are booking directly with us either by phone or on our website.
This great blog I follow called travelandleisure.com spoke about this similar topic on one of their articles. “According to the forum, you’ll have better luck calling the hotel directly and asking for their “base” or “rack” rates. By doing this, you’re also forming a relationship with the hotel—and how knows what becoming a loyal visitor can do for you in the long run”
It is pretty much always a win-win situation to call a hotel directly instead of doing a booking on an app. This way you can also put in some personal request and get a more personalized service. Trust me, I always have way better stays when I call a hotel directly. Not too mention the extra points you get if you are a member and you are booking directly.
By: Ismail Abu Assi
http://www.travelandleisure.com/hotels-resorts/hotel-secrets
http://hotelrmc.com/how-otas-manipulate-hotel-search-results/
My eye on the inside 