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Why Third Party Reservation Websites Are For Chumps

Third party internet travel sites like Expedia and Travelocity seem like a great way to get a bargian, but in reality they cost you just as much, if not more than booking direct, offer unreasonably strict modification policies, and earn you crappier service from hotel employees. I've been in the hospitality industry for five years, and here are some of the secrets we're not telling you:

First, virtually every hotel has a lowest-price guarantee if you book directly with them, and they will all meet or beat the third party rates. Why? Because those sites take huge commissions out of the rates the hotels set, and the hotels would obviously like to hang on to those funds. Generally, third party sites take their commissions before making the actual reservations with the hotel, which means the "real" rates on third party reservations (which are confidential and never appear on guest bills) are usually the lowest in the hotel. And they're often treated that way, although I'll get to that below.

If you're looking at an air/hotel package that seems to be discounted below what you'd pay buying air and hotel ala carte, break it down by looking up the fare for the exact flight on the airline's website. Hotel rates are much more changeable than air fare, so it's likely the package's "discount" is being absorbed by the website and probably the hotel. Once you have the airfare figured out, you can subtract it from the package rate to infer what the hotel-only rate should be. Call and ask the hotel to beat that rate (if you don't have success with reservations, try the front desk). The hotel would always rather sell directly to you, even if they have to undercut their own "Best Available" rates to do it. Almost any discount they offer you is a much lesser hit than the commission they're paying out. And who knows? Hotels often offer certain club members (AAA, AARP, American Express card members, etc.) even deeper discounts.

Booking directly with the hotel has many other advantages, though. Most third party sites have very inflexible cancellation and modification policies in that you can't do either. Those policies are generally contracted so that the hotels are hamstrung and simply cannot modify the reservations from their end. So if you book with a third party site, you're committed. They're big, anonymous businesses, so it's virtually impossible to get refunds when you change plans. Good luck getting some call center drone to sympathize with your not being able to travel due to a sick child or an impending hurricane. They hear dozens of such calls every day. Even if you get somebody who'd like to help out, they are often restricted by their software from doing so.

Hotels, on the other hand, usually only require that you cancel at least 24 hours before scheduled arrival, and modifying your reservation, even during your stay, is very often penalty-free. So why tie yourself to inflexible travel plans if you don't have to?

Oh, and if your stay wasn't everything you expected, there's nothing the hotel can do to compensate you on your room and tax, because you paid the third party site, not the hotel. The hotel literally doesn't have your money, and there are a lot of complicated contracts with the third party sites that prevent them from getting it back to you. Higher-end hotels will often do whatever it takes to make a guest happy before they check out, including comping nights or the entire stay, if the complaint is egregious enough. You don't want to prevent them from being able to do that for you.

Last, there's a subtle and often not-so-subtle discrimination by hotel employees against internet travel guests. First, internet travel guests simply do not bring in the same revenue as regular guests, due to the extremely high commissions. Second, they are most often single-stay tourists, unlikely to be returning to the city, so there's no motivation to 'wow' them to come back. Third, by demonstrating that they comparison shop for their travel, they've indicated they're unlikely to be loyal to the brand or the hotel even if they do return to the city. There's not as much motivation to offer perks like special occasion amenities or free upgrades.

Also, the blunt truth is, when a hotel is nearing maximum occupancy, the better rooms will be held for more valuable guests, and internet travel guests will be blocked into the crappiest rooms. It just makes good business sense to give preferential treatment to the business guests and high-end tourists in order to woo them to return. You may not be not guaranteed the best rooms if you book directly, but at least you won't be earmarked during the arrivals process for the less desirable rooms.

So, in closing: Booking directly with the hotel will get you better rooms, better service, more flexibility with your travel plans, and it costs less. By all means, browse those third party sites to comparison shop; just don't actually book with them.

Comments

(Anonymous)

Hard To Believe

If what the writer says is true!, if I got what I thought was below standard service because I booked through a 3rd party I would ask to speak to the manager and tell them about the service. I believe if I did speak to the manager I would get some kind of discount on the room and the individual(s) that I told the manager who gave substandard service would be reprimanded.

(Anonymous)

Re: Hard To Believe

Good luck with that. I've been in the position of having booked through a 3rd party site. Requested a room with 2 queen beds. Got a room with 1 king. (Not acceptable considering my travel mate was not my spouse). Management refuses to do ANYTHING when you book via a third party and made no qualms about letting that be known. Argued them down for over an hour. We managed to get the 3rd party site to refund our money, but that still left us without a hotel room during a peak season at about 6pm. Won't ever book through a third party site again.

(Anonymous)

Re: Hard To Believe

I agree - same experience over the holiday travel season - hotel did manage to scrape up a rollaway bed to solve fundamental issue, was apologetic, but their hands were tied. They took the time to carefully explain this issue and I've never looked back. For the record, the hotel was Hilton and the site was hotels.com - when I told hotels.com about the problem they just blew me off

Re: Hard To Believe

I'm sorry to hear you had an unpleasant time. It's hard to know whether the third party site screwed up your request for two beds, or if it was the hotel, but in general, it's a good idea to minimize the "handling" on a reservation. The fewer people who input data, the less likely it'll be screwed up!

Re: Hard To Believe

I really only meant "service" in the sense of which room you are assigned to, and how accommodating the front desk can be about issuing refunds. Obviously, if an employee is rude, that's a whole other thing.

But good luck getting a manger to give a discount on a third-party reservation, or reprimand an employee for putting you in one of the less desirable rooms. Who do you think told the employee not to issue the discount and to save the rooms for the more valued guests?

(Anonymous)

Makes Sense

Seems logical but I've never had an issue booking via Hotwire and have done so numerous times, always got a great deal, better price then when I called the hotel directly (and I tested this).

I agree they put you in the "less desirable rooms" I saw this first hand a couple times. Not that they were dirty or anything, but you could tell that they were rooms that had not been updated in some time. I would guess that since hotels usually update entire floors at a time they keep the recently renovated floors for their direct bookings. I also noticed that direct bookings got me higher floors (better views) while Hotwire bookings usually got me on floors 7-11 and as such a view of the building next door.

Re: Makes Sense

We have a couple of really small rooms on my property, and I always feel terrible assigning guests to those rooms. When we have the availability, I always offer guests free upgrades to get them out of there, even if their third-party site guests. You can always ask for a better room, just be understanding if the property is sold out and they can't provide.

(Anonymous)

Re: Makes Sense

Well, of course you got a room on a lower floor (that wasnt as freshly renovated either) when you booked via Hotwire vs the hotels own website - and I bet you paid a ton less as well!

(Anonymous)

Re: Makes Sense

Good journal Night Auditor,

But I also worked in a four-star hotel, I can tell you we would not match the price of an expedia or travelocity rate under any circumstance. If anybody asked the rate we would quote the BAR, if someone said that the hotel could be booked cheaper online we would always say that rate is probably not availble for the nights you have selected.

Everything else you say is totally true. If you book through expedia you lose flexibility to cancel. In addition, we would do anything to keep a guest happy including comping their whole stay however if you pay through expedia we can't do that.

Luke

(Anonymous)

What you say makes a huge amount of sense...

however, it's not been my experience. I always call the hotel directly; I've only rarely had them match an Internet third-party rate or even come close.

I have the receipt sitting right here from one of those stays. (I'm taking a break from doing my taxes.) I was in Tampa for a week (Friday-through-Friday) and planned to have my boyfriend join me, so I wanted a decent room. I shopped around, found a rate of $139 at a waterfront hotel in an off-peak time, no special events.

It's one of the few chains I maintained a loyalty card for, so I called the reservations number. The best they could do was $189. "But I found this rate on Expedia." Sorry, $189 is the best we can do.

Called the desk directly. Used to be, when I was staying a week or longer I'd get some kind of break (which WOULD be another good reason to call the hotel directly). Not only was he not willing to do a break, he refused to budge off the $189. Maybe I needed to say some magic words: "Hey what about the low-price guarantee?" but I didn't.

So I booked through Expedia. I know the hotel probably got only $100 of the $139/night I paid. I wholeheartedly agree with you that it WOULD be smarter for hotels to enforce that low-price guarantee, but in my experience they just haven't.

I will say the staff didn't seem to treat me any differently - then again, the hotel was maybe half-full, if that.

(Anonymous)

I also work in hospitality in a large north americican tourist destiniation, and I have found from the hotel chains I've dealt with many of them are now matching online rates, the real trick is to explain to the person on the phone for reservations that you know those companies get up to 30% of the room rate and you would much rather see that in the hotels pocket.
It is also very true that 3rd parties are the first to be bumped from the room type they booked. if a hotel has oversold a specific room type the lowest paid (from the hotel side) will be the ones who have to suffer.
As the front line people we don't like doing this but from my experiences over half of the people that I've dealt with who book online come to the hotels demanding the world, not knowing what the hotel has to offer or what they have acutally booked. It always pains me to see a nice person just trying to budget a vacation getting screwed by noting looking at the fine print from the hotel (things not included on 3rd party sites).
The best thing anyone can do is call the hotel directly! If you do wish to book online due to rates by all means do it, but from a front line person please make sure you call the hotel and get them to add something on the account (eg. traveling with two children, arriving late etc.) so its easier to put the person to person connection to a reservation before someone arrives.

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Thank you, I come back
Tom & Oprah

January 2009

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