Holidaymakers can get a better deal if they book directly with their hotel rather than through an online travel agent like Booking.com or Expedia, a new Which? Travel investigation has revealed.
Online travel agents (OTAs) are often thought to be the most convenient way to get the best price on a hotel room, with many comparing the cost of hotel rooms across different websites under the promise of allowing the customer to find the best deal.
However, when Which? contacted 10 hotels to ask if they could offer a better deal than that offered by an OTA or on their own website, eight were able to offer a better price or other incentives such as free breakfasts or upgrades, with the research suggesting travellers are paying up to 12 per cent more for their rooms than they need to.
Which? Travel checked the cost of a room in 10 different hotels across the UK on Booking.com, before phoning each of them to book directly. In eight out of the 10 instances, the hotels were able to offer a better deal, with one hotel offering a £20 discount – saving 12 per cent of the cost of the same room booked online – as well as a free upgrade. Offers from other hotels included discounts on food and spa treatments, free breakfast, and free parking.
The research found that it is usually more expensive to book a hotel room online than booking directly by phone or email, due to a combination of commission charged by OTAs like Booking.com and Expedia on every booking made through their websites, and OTAs enforcing ‘rate-parity clauses’ in their contracts with hotels – clauses which prevent hotels from offering lower prices on their own websites than those listed on the OTAs’ websites.
OTAs charge high levels of commission (typically between 15 and 25 per cent) on every booking, which hotels – especially smaller properties like family-run B&Bs that cannot afford to absorb the cost – often have to pass on to customers.
Both Booking.com and Expedia denied to Which? that their commissions are driving up prices. But Which? has found that more often than not, hotels will be able to offer a better rate if they are contacted directly, either over the phone, via email, or in person, as rate-parity clauses only apply to prices offered online.
These rate-parity clauses have been banned in France, Italy and Austria for preventing competition. However, the Competition and Markets Authority (CMA) in the UK chose not to ban the clauses in its recent review of the hotel booking industry.
The consumer champion also heard from a small B&B owner who claimed that the OTAs’ control of the market resulted in them stealing direct customers from them, and that they were “punished” for challenging them on their control of search engine listings by displaying their rooms at inflated rates and falsely listing their property as fully booked. A letter seen by Which? Travel from Booking.com to another B&B owner who attempted to offer better prices on their own website warned them that by undercutting prices they risked “lower visibility and slower business growth”.
The consumer champion is concerned that rate-parity clauses could potentially result in higher prices for consumers, and has shared its findings with the CMA. Which? is also urging travellers to always contact their hotel to book directly to avoid paying more than they need to for their room.
Rory Boland, Editor of Which? Travel, said:
“Customers shouldn’t be duped into thinking they’re getting the best price from a hotel booking site when more often than not, they can get a better deal by avoiding its commission and booking directly with the hotel.
“Hotel booking sites might be a good place to start your search, but you should always call or email the hotel for the best chance of getting the cheapest deal – even in cases where they can’t offer a better price, there’s a good chance they’ll throw in a freebie or two.”
Notes to editors:
- Which? Travel looked up the price of 10 hotels on Booking.com for popular UK destinations in December 2019 for a Saturday-night stay on 28 March 2020. It then contacted each of the hotels directly to ask if they could better the price online.
- Which? has a case study of an anonymous B&B owner – for more information, please contact the press office on the contact details above.
- Booking.com still duping consumers with pressure selling tactics, despite regulator action – 19 September 2019
- Booking.con – Travel websites still duping customers with dodgy discounts – 24 May 2019
- For more tips on how to find cheap hotel rooms, visit: https://www.which.co.uk/reviews/uk-hotel-chains/article/how-to-find-cheap-hotel-rooms
Email from Booking.com to B&B owner offering lower prices on own website:
How to get the best room rate:
- Find a hotel on Booking.com (or similar).
- Google the name of the property (watch out for ads from hotel booking sites hijacking the search results – scroll down to find the official site).
- Email or, better still, call the hotel directly.
- Quote Booking.com’s rate and ask if they can better it.
- Calculate 15 per cent to 25 per cent of the rate. This is the potential saving for the hotelier and an indicator of wiggle room.
Rights of reply:
A spokesperson from Booking.com said:
“Properties choose whatever prices they want to list on Booking.com, which they can do at will and free of charge. Then Booking works hard to advertise their property for them to customers all over the world. If Booking can indeed find them a customer, the property then (and only then) pays a small fee in exchange for the service. By contrast, if a hotel or small bed & breakfast in the countryside for example, were to advertise on TV in markets all over the world in order to find customers and generate business, it would likely be so expensive that the properties would need to charge even higher prices for their rooms in order to stay in business. Booking is a much more cost-effective platform for properties to advertise, allowing them to pay only when they generate actual business.”
A spokesperson from Expedia said:
“For the past 20+ years, Expedia Group has helped hundreds of thousands of hoteliers compete for consumers’ business and provided transparency to the market, helping consumers discover these hotels quickly and efficiently. We provide a global marketplace for chains and independent hotels alike to compete with their peer hotels, by making them visible and bookable to consumers worldwide. Our focus is on ensuring that the best rates and availability are presented to consumers in order to attract travellers to our sites to book with our partners. The ability to book packages with Expedia is a great example of this, where many hotels and certain airlines give us special discounted pricing as part of an ATOL protected package that are not offered as standalone purchases.
“Hotels pay no upfront cost for using an OTA. They have the freedom to review their room demand and availability across their different distribution channels and, using our technology solutions, update the rates and availability that they provide for display on Expedia Group websites. This combination of attributes is particularly valuable for Europe’s small independent hotels. According to Oxford Economics, Quantifying the Impact of OTAs, as much as 82% of bookings through an OTA go to independent hotels whose share of the overall EU market for hotel bookings is much lower at 57%, making it fair to say that OTAs level the playing field for small hotels vs the big global chains.”