Like you and many others, I’ve often used Online Travel Agencies (OTA’s) such as BookingCom, Expedia, Agoda, etc. It’s easier to see a quick overview of what’s available and compare prices between places. And then there are comparison sites such as Trivago. And AirBnB is cheap isn’t it? But is it really as good as they advertise? Let’s take a closer look at each of the impressions we get from their advertising.
This article covers: prices, availability, making comparisons, reviews, best price guaranteed, no hidden costs, nothing can go wrong, who will help when it does, booking online, direct booker privileges.
Easier to compare prices, easier to see availability
It is easier to compare between places if they are all listed next to each other, including their availability …at least it certainly looks like that.
Many motels/hotels don’t list all their rooms, knowing that there are many customers who are repeat customers who know where they like to stay, and get loyalty privileges by booking direct (more on that later), so you don’t know if you’re not seeing a place which does have availability, but you choose instead another place to stay at, which may not be as suitable for you as the one you would otherwise prefer.
“Isn’t Trivago an independent price comparison site?” Well yes and no. Trivago is owned by Expedia, so independence may not be quite what it seems.
“Doesn’t Trivago show the best prices?” Well again yes and no. They are being taken to court in Australia for not comparing like rooms with each other (August 2018 news article).
Trivago gets their price and availability data directly from the OTA’s, who get it from the accommodation provider… so there should be no difference to the OTA’s own site. Sometimes however, one OTA will decide it wants to steal business from another one, and do some price cutting off their commission (more on commission later – you won’t like it either).
Bottom line: see many at a time: YES; see all availability: NO; true price comparison: NO.
Easier to compare what you get
It is certainly quicker, but is it easier to compare “apples with apples” on an OTA website, versus looking at each accommodation place’s own websites? It is definitely true is that all properties are described in the same way, with the same kind of information in the same places, and that makes comparison much easier.
However, in order to keep costs down, OTA’s standardise descriptions, so that they can translate their websites to 80+ languages. The options that accommodation places can use to describe their rooms, facilities, policies, etc. are standardised and are often different to the real world, in some way that may just be very important to you. It’s not like comparing “apples with tennis balls”, but it is like comparing “apples with pears”.
Sometimes the really important stuff is “hidden” in the fine print, under a click link you have to open to reveal all the information… very easy to miss. This is not deliberate by the accommodation provider, it’s just that anything outside of the standardised texts is very hard to get the OTA to add to their description.
Bottom line: quicker: YES; easier: YES; compares “apples with apples”: NO; easy to see all the important info: NO.
Comparing reviews helps me choose
Reviews are useful, and usually you can spot the silly ones. There is controversy around TripAdvisor reviews being paid for (you didn’t know? Even if it’s not the claimed one third of all reviews, there’s still room for concern).
All the OTA’s have to approve the replies from the accommodation and that means you are getting a filtered truth. If the OTA has done something wrong, we can’t tell you that. Google reviews are the only ones that are not filtered (yet).
The best about user reviews is when they reveal something that you cannot find out from an OTA or the accommodation providers, e.g. how was the service? Did the room smell?
On other matters, it can be very subjective if the guest review is fair, or at all useful to you. The best example is the bed. Whether it is brand new or very old, the comfort feeling you’ll get from the bed is a real Goldilocks thing… it should be not too soft, not too hard, just right! But what is just right for you will be too soft for someone else, or the other way around, so the bed comfiness review is pretty much useless. If you have a back problem, you should definitely contact the accommodation directly, they will know which bed/room will be best according to your request (you’ll need to tell them if you want hard or soft, they’re not trained physiotherapists).
Sometimes reviewers score low for silly reasons, for example “no air-conditioning” might be true, but unless the accommodation says they do have it… well, there’s no helicopter landing pad either!
Bottom line: Reviews can be helpful: YES; reviews are independent: MOST; reviews tell the real story: SUBJECTIVE; reviews tell the whole story: NO.
“Best price, guaranteed”
The first rule in buying anything is always: you get what you pay for and you pay for what you get. The OTA’s do a lot of great work for us all by making it easier to see an overview of availability, pricing and facilities. They also spend a good deal of money on advertising. Getting listed at the top of a Google search every time is not cheap, BookingCom pays millions for that. So who’s paying and how?
You pay a commission to the OTA when you book online with them. Some of the total commission may be paid by the accommodation provider. Some OTA’s offer discounted commission if you use them a lot (or your 1oth stay “free”, e.g. HotelCom), or get in a price war with each other. However the rates charged by the accommodation provider must be the same to each OTA according to their contracts.
The only place you can truely get the cheapest rate guaranteed is to book directly with the accommodation itself. This is especially true when you want to book more than 1 night, or more than 1 room, or on behalf of a group. It is also your way to get direct-booker privileges.
Bottom line: cheapest rate: NO
What they don’t tell you, about what you pay
Unless you book directly, you pay a commission. How much depends on where you book. Unless you book via a NZ iSite or the AA, all the commission charged to you goes overseas to companies that pay no taxes in NZ. We’re talking millions of dollars.
How much commission do you pay? You pay an OTA a minimum 12% of the booking price (in some locations such as Christchurch, Queenstown, it can be as high as 20 or even 25%).
How much are we all losing? A viral video by the well known Australian, Dick Smith, has opened the eyes of many and resulted in a 25% increase in direct bookings in Australia. So, how about a quick calculation for NZ: there are around 10,000 accommodation providers in NZ. If 75% of the bookings are through an OTA, and the average room rate is $150 (for arguments sake, and easy calculation), and an average commission of 15%… that is around $20-30 million per year going out of NZ, tax free!
Bottom line: booking direct keeps your money in NZ, commission free, tax paid.
It’s all automated, what can go wrong?
Making your actual booking on the OTA sites regularly results in errors in the booking. For some people the booking process is simply confusing. From our best estimate, on average around 1 in 10 bookings result in some issue or other. Common issues include:
- Booking for the wrong number of people, costing more on arrival or having paid too much in the first place
- Difficulty to alter a booking, e.g. to arrive a day earlier or later, to extend a booking an extra night or to reduce the number of nights, or change the dates, or cancel a booking
- Booking the wrong dates, getting a booking collision whereby the same room is booked by different people at the same time on different Online Travel Agent websites, resulting in confirmed double bookings until the error is identified and the later booking being cancelled.
- A mistake in your email address will result in you not getting a confirmation, so you’ll have no idea you are contracted to stay, no link to changing or cancelling your booking
- When you phone direct to the accommodation, you are talking with their own staff for any questions about the booking. Calling an Online Travel Agent for support typically includes waiting in a phone queue to a toll number, often giving up after 20 minutes on hold, or being answered by an overseas call-centre
- As described earlier, OTA websites’ descriptions of rooms and facilities can differ from reality, because they use standard descriptions for rooms regardless of variation from the actual room facilities and room type, so that their description can be translated to 80+ languages.
Bottom line: simple to use = no error: NO; easy to change a booking: YES/NO depending on how often you use their site, and can follow their instructions.
I prefer to book online, I don’t want to phone
That’s OK, most accommodation providers have their own booking system on their own website. So you can book direct and book online! Problem solved.
Who will help me when something does go wrong?
What went wrong? Who is at fault? Who will help? This is a tough one …you may not even know that something has gone wrong, and if you do, then it can be difficult to find out why something went wrong. Did you make an error when you entered information; your email address, phone number, credit card number? Did the OTA system make an error when sending the data to the accommodation provider’s system? Did the accommodation’s system or staff make an error?
It doesn’t really matter whose fault it is, you just need it fixed.
Who do you think you are making a contract with? The OTA’s view is, they’re just the middle-man, the guest is contracting with the accommodation provider. The bottom line is the OTA’s are not working in the interests more for the you or the accommodation over each other. All care, no responsibility. Some OTA’s work a lot harder than others to resolve issues for both ends of the contract (the best is probably BookingCom, at the moment, but that is a subjective view). In the end, they want a successful booking, or they get no commission.
Bottom line: it’s never your fault: NO; the OTA will solve it for me: SOMETIMES; the accommodation will solve it for me: PROBABLY YES, they want the best outcome for you and themselves, and that is a happy guest.
Recommendation: if something goes wrong get in contact with the OTA and the accommodation.
How should I find the best accommodation?
If you like using the comparison sites to do your basic searching, that’s where the OTA’s are most useful. And then when it comes to finding out true availability, price and facilities… contact the accommodation directly.
Most accommodation have good detail on their websites (and if they don’t, well maybe that tells you something too), usually including their own on-line booking system, and most have free-call phone numbers or an email address if you have questions or want to clarify information, or are booking several nights or rooms.
Bottom line: OTA’s are best: NO; accommodation websites are best: NO.
Recommendation: use both.
What do I get when I book direct?
Most accommodation providers will offer you some incentive to book directly with them, and to keep coming back. You will get personal service and you should feel confident that you have made the right choice of room and facilities for your needs …and if you’re not sure of that, then you can go back to the comparison site and contact your second choice place. It will be worth a little extra time spent if it makes the difference to a good holiday, and value for money.