Which online booking site will be the first to get direct hotel rates?

Skift grip

On direct hotel booking rates, one of the big chains is already in talks with traditional travel agencies to divest them. Additionally, Choice Hotels, for its part, reports that better deals from online travel agencies could go a long way to ending its boycott of distributing member loyalty rates. If every person has a price, so do hotel chains.

Dennis Schaal, Skift

It will happen – eventually.

While many large hotel chains have begun offering loyalty program members who book directly through their own websites lower rates than they distribute to online travel agencies and meta sites, as well as traditional travel agencies, the calls for change are already increasing.

Among them, Expedia officials have been the most outspoken, warning hotels that they will be shooting themselves in the foot if they persist in their blunt and stingy OTA strategies.

And on Thursday, TripAdvisor CEO Stephen Kaufer announced that he would like these special hotel rates and can consider a model where he can get them.

Why a few dollars or euros here and there are so important

These direct-to-hotel rates for loyalty program members are usually only a few dollars in savings — perhaps a rate of $208 per night for two double beds instead of $212 — but it’s clear from the travel and online distribution story that such discounts can be very significant in triggering share change.

This is why online travel agencies such as Priceline.com, for example, began to eliminate booking fees for airline tickets in 2007, because the difference in price caused travelers to book on websites instead. airlines.

Online travel agencies and metasearch engines today desperately want access to these lower hotel rates. If you look at hotel prices on TripAdvisor, Kayak and Google, there are indeed price differences, but very often all distributors offer the same hotel rates.

If TripAdvisor can offer a rate for the Holiday Inn in Chicago from Holiday Inn that is $3 less than what Expedia or Booking.com offers for the same property, then that is meaningful and will eventually attract more of consumers on TripAdvisor as the place to find the lowest prices. .

Thus, with their direct booking rates, major chains such as Hilton, Marriott, Hyatt, InterContinental and Choice are making a very strategic decision to finally mark time and regain market share with online travel agencies.

Why split the revenue when you can win those customers on your own?

George Harrison knew everything had to pass

But it won’t stay that way forever – online travel agencies and metasearchers have too much market power and too many tools at their disposal.

One of the major chains told me that they are already talking to traditional travel agencies to give them the chain’s direct-only rates, although the chain hasn’t had discussions with online travel agencies or metasearch sites about it.

I’m not saying that Expedia, Booking.com, TripAdvisor or Kayak will have access to special hotel rates in 2016 or that there will be an avalanche of third-party distributions – but the boycott will eventually break down.

Do you remember airline internet rates?

For example, who remembers airline web fares?

Were these special fares in the early 2000s that many airlines only offered on their own websites? For a few years, Orbitz.com was the only online travel agency with access to it, as major US airlines owned Orbitz.

It was a big deal with antitrust implications. On a Wednesday or Thursday, perhaps, the airlines would send promotional emails or advertisements informing travelers that they could purchase discounted fares that day on the airlines’ websites – fares you couldn’t not find on Travelocity, Expedia or ebookers, for example.

But in 2002 Saber signed a full deal with US Airways that started to put an end to all that as Galileo, Worldspan and Amadeus and the other airlines followed. In exchange for lower booking fees from global distribution systems, airlines have agreed to offer them almost all of their fares, including those that were previously only available on the web.

Leak?

One or two of the chains – or perhaps more – will eventually enter into an agreement with Expedia, Booking.com, TripAdvisor or Google to provide them with hotel direct booking rates in exchange for reduced commissions or other marketing/promotional benefits.

One of the chains is already talking about it to traditional travel agents.

Choice Hotels officials pointed this out Thursday when discussing the chain’s recent move to offer lower rates to loyalty program members who book direct.

Joyce said he had nothing against online travel agencies as distribution partners in theory, but they needed to provide more services and at lower prices for such partnerships to be beneficial to Choice.

Choice CFO David White also responded: “‘So listen, we openly welcome them. [OTAs] as a channel,” White said. “We just want the price to be appropriate and with a commercial relationship that makes sense to us, but we will continue to drive our business and our proprietary channels because it creates the strongest loyalty loop with the customer and because ‘they’ are the most profitable for us.

Every person – and every hotel chain – has a price.

Expedia is already experimenting with new models to attract hotel distribution, including fueling direct hotel booking efforts, in this new era. These new models, such as Expedia’s connection to metasearch-style hotel chains, coupled with significantly lower commissions, could eventually be enough to tip the scales.

Wait and see.

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