With high occupancy, hotels seek to avoid online booking services
Hotels and online travel booking companies tend to have a marriage of convenience, one that savvy travelers can exploit.
When hotels struggle to fill rooms, they reluctantly pay Expedia and other online travel agencies 15-30% commissions to help reduce vacancies. But when beds fill up, hotels much prefer to avoid those hefty commissions by asking travelers to book directly through the hotel’s website, call center, or licensed travel agent.
That’s why lately, with average occupancy rates in the United States at the highest level in at least a generation, hotels are hesitant to entice you to book direct. Tensions between hotels and online agencies are not new. But the continued rise in occupancy levels makes hotels feel like they have increasing leverage.
Lures can include upgrades to better rooms, free shuttle service to and from the airport, free breakfast, or drinks at the bar.
But lately, the big savings are available to travelers who have signed up for a hotel’s loyalty program — usually at no cost to the consumer — and book directly through hotel channels. Room rates can often be 10-20% lower.
“The biggest weapon now is member-only rates,” said Lorraine Sileo, senior vice president of research at Phocuswright, a travel research firm.
As a group, online travel agents still account for about a third of all bookings, compared to only about a quarter for hotel websites, according to Phocuswright.
But hotels have a growing influence. In the 20 years since Expedia, Travelocity and other online players began making it easy for consumers to act as their own travel agents, the American hospitality industry has never had a better occupancy rate than today.
This year through July, on average, more than two-thirds of hotel rooms nationwide have been occupied, according to STR, a hotel research firm in Hendersonville, Tennessee. That’s the highest average occupancy since 1984, said Bjorn Hanson, a professor at New York University’s Jonathan M. Tisch Center for Hospitality and Tourism. A big reason is that the supply of new rooms has not kept up with the growing demand.
Megan Klein is one of the travelers who now book directly with the hotel as soon as possible. “If there’s a good rate on the hotel’s website, I’ll book online,” said Ms. Klein, 37, president of FarmedHere, a sustainable indoor farm just south of Chicago.
She also likes to call the hotel to speak to someone at the front desk. “I like having a more personal experience at the hotel,” she said. “I like to support real business.”
But that’s only possible when Ms. Klein already knows which hotels to check in a given city. During a 10-week international trip in 2011, she relied on Agoda.com to find and book hotels in Cambodia, Hong Kong, Laos, Singapore, Thailand and Vietnam.
Some travelers simply prefer the convenience and ease of comparison shopping through online agencies.
Trevor Schneider mainly travels within the country. He usually waits to fly to his destination to book a room with the online travel agency Hotels.com, comparing last-minute prices in several hotels simultaneously. He also appreciates the free night offered by Hotels.com after booking 10 nights.
“I love all of this in front of me at the same time,” said Mr. Schneider, 37, brand ambassador for wine and spirits importer William Grant & Sons. “I can book a hotel in a minute.”
A recent report by Morgan Stanley Research describes the relationship between hotels and online travel agents as a relationship between “enemies”.
It is especially when hotel business is down, such as during the 2008 financial crisis and subsequent recession, that hoteliers are more willing to use online travel agencies to move excess inventory.
But online travel agents say they can provide hotels with additional business in any economic cycle.
“We bring them additional business, business they can’t get on their own,” said Melissa Maher, senior vice president of Expedia, owner of Hotels.com, Trivago.com, Hotwire.com, Orbitz.com and Travelocity. com, among other sites.
As an example, she cited the “package trade,” where hotel rooms are sold with an airline ticket, a rental car, or both for a single price. “Our customers tend to be brand agnostic,” Ms. Maher said. “They usually don’t look for a specific brand.”
But hotels themselves want travelers to be aware of their brand. “Hotels are trying to build brand loyalty,” said NYU’s Hanson.
In February, Hilton Worldwide launched an ad campaign called “Stop Clicking.” Geraldine Calpin, Hilton’s chief marketing officer, said it aims to “change the perception that the best place to book is on an OTA”, using an industry abbreviation. for online travel agency.
Hilton offers discounted rates to members of its loyalty program, Hilton Honors, who book through company outlets.
“Hotels are all about the guest experience,” said Michelle Woodley, executive vice president of Preferred Hotels & Resorts, a company that provides sales and marketing services to independent hotels.
In an effort to compete with price comparison sites like Hotels.com, Preferred Hotels & Resorts has developed a pilot program to allow travelers to compare its own rates with what online travel agencies are offering for its rooms.
Booking directly with a hotel does not always mean doing it yourself. Rebecca Proctor, based in Aurora, NY, is the Creative Director of MacKenzie-Childs Home Furniture and spends a lot of time in India, Shanghai and Hong Kong. She tends to rely on word of mouth about where to stay and then book on the hotel website.
Recently, when planning a trip to Hong Kong, she thought she had a pretty good hotel rate. But his local sales agent was able to call and get one for 20% less.
“People locally can negotiate a better rate,” Ms Proctor said. ” I’m a businessman. I manage a budget. Negotiating the best price is essential for me.