The Lies Online Travel Agencies Tell You
The other day I was on Trivago doing some price comparisons and I noticed something fascinating.
Do you see it?
How about in this example?
If you’re like me, you like finding the best deal possible, and doesn’t that little red sticker look enticing? 31% off! Amazing! That must be cheaper than booking through an agent or direct with the hotel, right? Not so much.
See, that 31% off is based off a price listed for EXPEDIA, not 31% off the rack rate at the hotel itself.
And, according to the hotel, Expedia shouldn’t be $250. That 31% off rate is what the hotel has identified as the every day rate Expedia should be offering.
Trivago, Expedia, Booking - in the industry, they are known as ONLINE TRAVEL AGENCIES and they account for a massive chunk of the bookings in the travel world. But should they?
THE RISE OF THE OTA
Many moons ago, Online Travel Agencies (or OTA for short) were proverbial dumping grounds for suppliers trying to offload the last of their product. Hotels had a handful of rooms they wanted to sell, so they offered them at ridiculously low prices to OTAs, because it allowed the product to be seen by large masses of people and get bodies in the door.
What happened though, was that these OTA’s were requiring huge commissions. That meant that a hotel was paying a site like Expedia upwards of 30% to sell that room, increasing the loss for the hotel.
As time has gone on, hotel’s have faced additional challenges by putting their product up on an OTA’s site. Hotel’s branding is lost to that of the OTA (I mean, you're more likely to recognize Expedia's logo than that of Marriott Hotels, right?), the policies of the OTA outweigh those of the hotel meaning customers requiring assistance find themselves flying solo because the hotel can’t help, and their customers aren’t engaging with them.
In today’s market, hotels have smartened up. Discounts, booking packages, loyalty programs, and ensuring that the hotel is offering the cheapest price are becoming strong operating practices.
WHAT YOUR OTA’S DON’T WANT YOU TO KNOW
Recently, an article came out about Trivago's new lawsuit for false advertising in Australia. So what are the secrets the OTA's don't want you to know about?
1. Their customer service is garbage
Harsh? Yes. Too harsh, no. There's no real way to tip toe around this.
If you’ve ever had an issue with your OTA booking, you know that getting quality customer service is a tough go.
Sadly, there are many reviews like this one of abysmal service being offered to customers.
2. The price you see is not always the final price
Have you ever found a great price, selected it on an OTA’s site and then when you get to the next page, the price has changed and is now higher?
While prices in the travel industry do fluctuate, especially if flights are involved, the practice of “click baiting” you is unfortunately common. You may not notice that a $109 a night room is now $111 (especially after they add in all the tax), or it may seem small enough that it doesn’t matter. But it’s the OTA’s way of trying to reel you in by playing a psychological game with you.
3. They track your cookies and adjust the price based on what your online activity is like
Now, this tactic can *sometimes* actually work in your favour. The guiding principle is flexible pricing in an attempt to barter with you. The algorithm figures out what you are willing to pay based on your cookies - what other sites have you visited, how much have you paid for similar products and so forth.
But it does mean that the price you pay with an OTA isn’t the same price your friend might see.
CBC did a fascinating piece on this practice, and used three people shopping in different ways to showcase this tactic. Spoiler: there's some shady stuff going on.
4. OTA room are sometimes the worst
Below are the views of two different “River View” rooms at the Port Orleans French Quarter at DisneyWorld.
View 1:
View 2:
Same room category, same price, but one obviously has a “leg up” on the room. The kicker - these rooms are side by side. Amazing what one door over can do, right?
Hotels have rooms in every category that just aren’t quite amazing as it’s sisters. This can include better views, yes, but also location - rooms next to the elevator, or perhaps a loud ice machine. Maybe the room is right over a bar and the bass carries upwards at 1AM. Perhaps the hotel is undergoing renovations and it’s the difference between an old room and a renovated one. Or maybe due to a cleaning closet, this standard room is just ever so slightly smaller than the others.
Now, guests who book with OTA are sometimes intentionally placed in these poorer rooms.
During one of my training sessions, a hotel in California was used as an example, where some rooms look at Disneyland and the other half of the rooms overlook the freeway. Both are the same price, but the freeway rooms were described as the “Expedia Rooms”.
5. If Things Go Wrong, the Hotel Can’t Help Easily
Things happen. It’s just how life goes. And sometimes those wrong things happen with hotels or airlines.
So let’s say a pipe bursts and your room floods. Booking a more direct route means the hotel can refund you your room. Booking through an OTA means the hotel can’t - you have to try and convince the OTA to refund you. And if reviews online are any indication, this is not a simple task.
This is with airlines as well. And at times, the OTA policies have trumped the airlines. In the USA, you have 24 hours to amend your airline ticket at no additional cost. You change your mind, need to make a name change - whatever. But when a client books with an OTA, it’s a lot harder to get that 24 hour freebie, often with the company telling you things are non-refundable.
Visit here for the USA policy: https://www.transportation.gov/airconsumer/notice-24hour-reservation
In addition, flights booked direct or with a Travel Agent are less likely to be bumped than those booked through an OTA. While not all airlines do this, many still overbook, knowing that on average, a percentage of folks on a flight won’t show. If you don’t want to be bumped, don’t book with an OTA and don’t wait until you get to the airport to check in.
6. You Are Just A Number
As a Travel Professional, my entire goal is to build a relationship with you, my client, and act as a consumer advocate for you and your trip. But with an OTA, you are one of millions. It’s estimated that staffing for Expedia alone is around 18,000. That’s larger than the city I grew up in.
Now imagine trying to get in contact with just ONE of those 18,000 with a job title that will (hopefully) be what you need. They'll hopefully make notes in your file, so if you have to call back in, the next random person you get (after two hours on hold) will hopefully see what's already been discussed.
It's a whole lot of hoping.
Agencies like mine (and many others, both home-based and brick and mortar shops) don't operate that way. I'm your Professional, so you know exactly who to call if you have any issues.
Being a number means that there’s always a bottom line, and you’re rarely a part of it, just like this poor fellow.
The reality is that things are not always the way they seem and when billion dollar revenues are on the line, OTA’s know how to work you and the system to maximize their profits, even if it comes at the expense of their clients.
If you want to book online that's up to you, but I want to ask you to carefully think through what it means if you book with an Online Travel Agency and if you're willing to accept the risks that come with it. It's my hope with this article that you'll be able to be a smarter travel consumer who is well informed in the decisions you make, because I would have never known myself prior to becoming a Travel Professional, and it's changed drastically how I approach my own travel.