It has become a key question for a traveler: is it smarter to book a hotel room directly with the hotel or, instead, with an online travel agency - aka OTA - such as Expedia or Booking.com?
Ask hoteliers, and they will shout at the top of their lungs, "Book direct!" That is because they pay the OTAs commissions that range from maybe 15% to 30%, the higher rate paid by small, independent hotels with minimal bargaining clout. Hotels passionately hate those fees, but that does not necessarily make OTAs bad for us.
A fact: contracts with the big OTAs insist on what is called “rate parity,” which means that, at least in the US, you won’t find a cheaper price for a room at a hotel than at an OTA. Sort of. The complexity is that parity applies only to publicly published rates. That means a hotel can offer you a lower rate if you call in, if you email in, if they email you directly -- in any of many ways, just so long as it is not a public web page.
Complexities multiply. HotelTonight, which specializes in last minute deals served via a mobile app, is construed as publishing “opaque” rates, which mean they are exempt from parity. Rates at some other providers likewise are exempt.
In Europe, too, parity is under assault by European Union regulators and OTAs have tweaked - read: watered down - parity rules to make the regulators happy.
Confused? You have every right to be. Hotel rates are a jungle, and what you don’t want to be is prey.
Start by recognizing that if the lowest price is key to you, always check the OTAs, if not directly, then through tools like Kayak and TripAdvisor that gather up multiple quotes. Don’t be surprised, but prices may vary significantly - price parity requirements notwithstanding. That’s why even bargain hunters who intend to buy directly at the hotel always glance at a roundup of prices, just as a double check.
In most cases, deals just will be better when you go direct. Room rates may be the same at an OTA but the hotel can and will sweeten the deal for travelers who book directly, said Chris Guimbellot, president of Hotel Internet Strategies. He elaborated: “hotels should offer value adds such as breakfast, bar credit, etc. to entice guests to book directly.”
Many hotels will offer free - or faster - WiFi to direct bookers. Also free parking. Sometimes, too, perks like upgrades are available - bigger rooms with better views go to direct bookers. “They save the best rooms for direct books,” said Billie Frank who runs the website Santa Fe Travelers. Industry scuttlebutt - unconfirmed but widely repeated - is that guests who come in via OTAs invariably are assigned the worst rooms.
Do the math. On a $200 room, if the hotel is paying 25% to an OTA, that leaves $50 in play for a direct booker. Throw in a free breakfast and WiFi and the hotel comes out ahead - but so does the guest.
Hotels with lots of business travelers often pass out drink coupons, not breakfasts, because traveling employees can expense breakfast but not booze at many employers. If you are in that boat and are offered a free breakfast, ask to swap it for a couple cocktail chits if that’s your pleasure. Most hotels are happy to play.
There's one factor that may be the clinching reason to book direct. “You cannot accumulate hotel loyalty points unless you book directly,” said Kristina Portillo, founder of BusinessTravelLife.com. If you are an accumulator of loyalty points - which can be exchanged for free rooms - you want to get in the habit of booking direct or get used to rarely seeing any points at all. Hotels - unlike airlines - are pretty insistent that booking with them is the only way to score points.
A final reason to book direct: what happens if there’s a screw up with a reservation?
Said Charles McCool, who blogs at McCoolTravel.com, “booking direct with the travel supplier means one less layer of communication,” and, he suggested, that alone should cut down on snafus. A related fact: book directly with the hotel and, said multiple sources, resolution of what problems do arise just is generally simpler.
True: when there’s a problem with a reservation made through an OTA many hotels just punt the problem back to the OTA - which could leave you sleeping on a plastic bench at the airport.
Add it up, and for most travelers, much of the time, going direct really is the shrewder path. You may pay the same room rate, but if you ask, perks will be yours and you will also get loyalty points. That’s a win for going direct.
This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.