Hotel Discounts for ‘Booking Direct’ May Not Be Working

Expedia says that efforts by chains like Hilton, Marriott, IHG, and Hyatt to offer lower rates on their own websites than through online travel agency signs isn’t hurting them.

    Hilton’s commercials tell you that booking direct is so alluring!

While bookings growth has slowed due to weakness in Europe,

We haven’t seen any real correlation in our performance in chain-heavy markets versus chain-light markets. You would think that in a market that has lots of chains, you would see some commercial or performance degradation to the extent that inventory quality is lessening. But we haven’t seen any of that whatsoever…

Expedia isn’t seeing any difference in markets where there are plenty of chains offering these direct booking discounts versus markets where those aren’t prevalent. (This may be less of a differentiating piece of data in the future as non-chain hotels get into the discounting for direct booking game too.)

The OTA’s CEO points out that they “attract brand-agnostic travelers,” people do not go to Expedia knowing they want to stay at a Hilton. Fewer than 0.5% of hotel searches specify a hotel chain.

People go to online travel agency sites to find out their options. They don’t go to Expedia because they want to stay at the local Marriott and think that’s the best place to book the Marriott. They go to Expedia to figure out where to stay, and Marriott is only one of many possible choices.

Online travel sites are useful as one-stop shops to compare options for consumers who don’t know up front which hotel they want to book. Their technology is at least marginally better than that of the major chains. They compete to show consumers what they want as quickly as possible. So they provide a better booking experience.

Expedia Dancers Don’t Provide Customer Service. Flickr: Juggernautco

There’s plenty of space to do online bookings better than Expedia does, after all:

For hotel chains to shift consumers to book direct, they need to:

  • Show consumers the product that best meets their needs
  • Offer consumers the best price on that product
  • Give them the best user experience

So far the discounts on their own hotels only gets them a small piece of the way there. They need to improve their websites. A daring chain might buy another booking site and leverage their technology to let consumers compare their hotels with hotels in other chains and non-chain properties and offer a real best rate guarantee. In other words, a hotel chain would become a quality OTA to beat the OTAs.

RoomKey’s efforts are a start but don’t always show the best prices or all hotel options.

And of course sometimes the OTAs do have better prices, despite chain promises to the contrary, because ‘best rate guarantees’ tend to be so fraught with loopholes that they often don’t have to be honored. The most common circumstance is a hotel site showing that a property is sold out of its basic room, while the less expensive rooms are still being sold on other websites.

Of course savvy consumers will still at least compare price with the hotel’s booking site — not just because of the potential for slightly better rates (that usually aren’t as good as AAA rates) but because booking direct will earn hotel loyalty program points (and elite stay credit) and may get the guest better treatment.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. You should do a piece on AAA rates. Are they aggressively negotiating for their members or is there just a cultural expectation dating to the 1950s that AAA just means 10% off?

  2. hotels should get into the booking game themselves like accor. when you search for a hotel on accor’s website, other hotels also show up… though not the chain compeitors.

    some of these other hotels, non-chain, still allow you to get benefits and accor points from the stay.

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