Online travel agencies (OTAs) are becoming increasingly competitive with direct travel suppliers (airlines, hotels, rental car companies, etc.) by eliminating or reducing fees for many types of travel transactions. I recently put the OTAs to the test for airfare, comparing offerings on Expedia, Orbitz, and Travelocity to the airlines’ own prices to determine the best value for consumers. The results indicated that the old adage of booking directly with the provider to save a few dollars no longer applies, so I decided to conduct the same experiment for hotel bookings.
Currently, unlike flight transactions, the OTAs have not eliminated booking fees for hotels. However, many (such as Expedia and Orbitz) are touting fee reductions for hotel reservations, or no fees/penalties for hotel reservation changes and cancellations. Many also offer low-fare guarantees and/or price-assurance policies. However, OTA fee policy changes in particular have not necessarily led to a new savings standard across the industry.
So, does one company or travel supplier tend to offer the best values for hotels? Should you only book with OTAs or always directly with your preferred hotel? Read on for the results of my test. In each case below, provider prices are listed from cheapest to most expensive.
I chose five hotels at random in five different cities (Chicago, Dallas, Miami Beach, New York City, and San Francisco) and compared prices for the selected property on the hotel’s own website and on the OTAs. I checked the same travel dates, room class, and number of travelers for each comparison, and generally priced the cheapest room class based on double occupancy. I factored all taxes and fees into the final price.
Here’s a look at the data from several geographic locations.
I tested a weekend stay in October at the Best Western Dallas Hotel and Conference Center, checking prices for a king-bed room.
- BestWestern.com: $184.67
- Travelocity: $197.50
- Expedia: $197.86
- Orbitz: $199.68
For this comparison, you’d save the most by booking directly with Best Western, as its price undercuts the OTAs by about $13. As for the OTAs, I found minor price differences between the three companies, often in just nominal amounts.
I checked an October weekend at the Marco Polo Ramada Plaza Beach Resort in Miami Beach, testing prices for a standard room.
- Expedia: $243.06
- Travelocity: $243.38
- Orbitz: $245.16
- Marco Polo Ramada Plaza Beach Resort: $266.34
At first glance, this looks like a case of the OTAs beating the hotel’s rates. On closer look, however, the OTAs do not include Marco Polo’s $10 per day resort fee, and each OTA notes in the fine print that the resort fee will be added at the hotel. Factoring in these resort fees, Expedia’s price becomes $263.06, Travelocity’s $263.38, and Orbitz’ $265.16. Even with the resort fee added later, Expedia and Travelocity beat Marco Polo’s rates by about $3. In this scenario, you have to do a little more legwork because of the hidden resort fee—and determine if the possibility of paying the resort fee later (e.g., with Expedia and Travelocity) is worth the minor savings.
An October weekend at the Holiday Inn Chicago—Midway Airport, staying in a king-bed room, showed the following results:
- Holiday Inn: $267.96
- Travelocity: $267.96
- Expedia: $268.02
- Orbitz: $274.40
Here Holiday Inn and Travelocity have matching prices down to the penny, whereas Expedia is close behind by just a few cents. Orbitz’ price is about $6 more expensive. From this scenario, you can infer that Orbitz may have charged a higher booking fee for this transaction than its competitors.
For the City by the Bay, I tested October weekend rates at The Mosser, and checked rates for a deluxe queen room.
- Expedia: $306.44
- Travelocity: $406.78
- Orbitz: $408.58
- The Mosser: $413.49
And now for a total curveball: In this test case, the hotel itself comes out with the highest total price, and Expedia undercuts all competitors by at least $100. Expedia’s exclusively negotiated “Special Rate” proves to be the best value.
New York City
I checked a November weekend at the Hilton New York and was quoted the following prices for a room with two double beds:
- Hilton New York: $693.21
- Orbitz: $697.06
- Travelocity: $712
- Expedia: $761.04
This result is perhaps the most bizarre of all. My Hilton New York and Orbitz searches resulted in similar total prices; Travelocity’s price is more expensive by about $15 to $19. (One can infer a higher transaction fee from Travelocity in this test case.) Expedia, however, quotes the advance purchase rate for one traveler only (the second traveler is considered an “extra guest”) and as such adds an extra $60 to the room rate. This is unusual, as most hotel room quotes are based on double occupancy. Multiple searches retrieved similar results, so this may simply be a case of the hotel’s policy/arrangement with Expedia. The lessons here are to never assume policies and fees are standard across the board, and to always look at the final booking price, as it may vary wildly between providers.
So, What’s Best for Consumers?
Unlike my airfare comparison results, there are no across-the-board rules applicable to booking a hotel room online. The old standard of making a reservation directly with a provider to avoid OTA booking fees is no longer airtight, but neither is it entirely wrong. Additionally, some OTAs’ final prices appear to be wildly divergent from their main OTA competition, so it pays to put some time into your trip research to ensure you’re truly getting a good deal.
The ultimate lesson here is this: compare, compare, and then compare again to get the best value for your trip.
Have you consistently found great deals for hotels on a particular website? What are some of your experiences when booking a hotel online? Share your expertise by submitting a comment below!
(Editor’s Note: SmarterTravel is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc. Expedia, Inc. also owns Expedia.com.)