The major hotel chains really, really want travelers to book their hotel stays directly, via the hotels’ own websites, smartphone apps, or call centers. And they’re offering a host of incentives to do so.
The online travel agencies, on the other hand, claim that they offer more choices, and in some cases better prices. Better to book with us, shout the likes of Expedia, Booking.com, Hotels.com, and Tingo.com.
There’s an element of legitimacy to both claims on hotel booking, which poses a quandary for consumers: Which side has the stronger claim on your travel dollar?
Booking Direct: the Loyalty Factor
As the hotels themselves go to great lengths to emphasize, there are several advantages to booking directly with a particular hotel.
For years, the major chains have only awarded loyalty points for reservations made through their own proprietary channels. More recently, as hotels have shifted from fee-based to free Internet access, they’ve conditioned that access on a combination of loyalty-program membership and direct booking. And more recently still, the major hotel chains have introduced members-only rate discounts—again, limited to loyalty-program members who book directly through the hotel.
Many hotels also offer a best-rate guarantee for stays booked on their websites, mobile apps, and through their call centers. But this may not be the most compelling reason to book directly with a hotel, since the online travel agencies offer their own comparable guarantees. And as a practical matter, if there’s a couple of dollars difference between two published rates, it’s not worth most consumers’ time to pursue a refund.
So, from the hotel side: loyalty points, free Internet access, and a discount. All together, that’s a strong argument in favor of direct booking.
Aside from the alleged consumer benefits, it’s worth noting the financial advantages that drive hotels’ interest in direct booking. First and foremost, hotels can bank the entire price of the hotel stay, saving the 10 to 15 percent commission they’d otherwise have to pay for sales made through a major third-party booking site. Direct bookings also give the hotels a chance to cross-sell customers related services—travel packages, for example—and upsell guests to more expensive accommodations.
There’s considerable extra revenue to be generated from hotels direct-selling their rooms. Indeed, it’s that pot of gold at the end of the direct-booking rainbow that accounts for the hotels’ vigorous efforts to dissuade travelers from third-party bookings.
Online Travel Agencies: Choice, Choice, Choice
Where the hotels tout points, perks, and price, the online travel agencies cite choice as their principal selling point. Type in the name of the destination city and the stay dates, and Expedia or Booking.com will display a long list of hotels from which to choose. Different brands, different hotel types, different price points. The choice is yours.
And the online agencies also have a counteroffer to the hotels’ loyalty programs. Hotels.com, for example, offers customers a free night after every 10 paid nights through its own Rewards program. The Expedia+ program awards points for flights, hotel stays, and travel packages, which can be redeemed for free and discounted travel. Orbitz has its Orbitz Rewards program. And so on.
Some of these programs offer solid value, to be sure. But compared to the hotels’ own loyalty programs, the online agencies’ are also-rans. They simply don’t feature the range or depth of earning and redemption opportunities. And because third-party bookings don’t qualify for points in the hotels’ own programs, travelers forego the opportunity to earn elite status and enjoy its associated perks in hotel reward programs.
Clearly, all things being equal, a greater range of choices and prices beats a narrower range. And although the online agencies’ loyalty rewards may not be quite a match for the hotels’, it’s not as though hotel points are the only game in town.
But with the hotels loading up on perks for direct booking, things are not equal. And therein lies the apparent dilemma for travel consumers.
The Hybrid Approach
As is often the case in standoffs, there is a third way, which combines the above two: Use an online travel agency to peruse and narrow down the options, and then make the booking direct with the chosen hotel. (In hotel-marketing circles, this look-here-but-book-elsewhere scenario is known as the billboard effect, and is assumed to account for a significant number of direct bookings. As it should.)
It’s the best of both worlds, featuring optimal choice, points, perks, and prices. But it does come with one minor but notable downside: It takes a bit longer than it would to make a booking by either of the competing methods alone.
But for most travelers, it’s a bit of extra time well spent.
More from SmarterTravel:
- Now You Can Actually Pick Your Hotel Room
- The Best Time to Book Hotels for Summer Savings (Infographic)
- This is the Best Hotel Search Engine for the Cheapest Rooms, Tested
Tingo.com and SmarterTravel.com are both members of the TripAdvisor Media Group.
After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.
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