Which? criticises online travel agencies - and rightly so

Booking a hotel falls right in between booking a restaurant and finding a reliable doctor in most people's priorities (the restaurant being 'low priority/risk' and the medical practitioner being 'critical'), but it's amazing how little time and effort some people are prepared to put in when there are thousands of pounds and their comfort and happiness are at stake.

Why is this the case? There would appear to be one reason that rises above all others when we mine down: people believe the online travel agencies' marketing. The example above is a particularly egregious example: there is no way the same room - for the same date - would show anything like that price variation across differing OTAs (online travel agencies). In our extensive experience consumers are far more likely to get a result like this:

Shocking, isn't it? No wonder Which? and the CMA are interested (we think the ASA ought to be as well).

For Times subscribers, here's a link to the full article.

The Times of 3 March scratched the surface, on the back of a Which? survey, but Mary Wakefield at the Spectator had a much firmer grasp of just how sinister the OTAs are:

You can read the full Spectator article here (no paywall)

Some of you will by now be wondering 'what has this to do with reviews?' The answer is simple: many - most even - people go to these sites in the first instance because they host guest reviews.

We wrote this article back in February of last year:

And it's not the first time we've been critical of OTAs. But we rely on the CMA to take action to protect consumers, so when these businesses are providing absolutely no added value - bar the reviews - we implore them to take swift action.

• Does booking through an OTA save you money? NO - and the Which? survey proves that.
• Does booking through an OTA get you any other benefits? NO, none that cannot be obtained by booking direct with the hotel
• Do OTAs boost hotels in their search results as a result of payment by those hotels? YES, many do
• Do hotels use OTAs to sell their substandard/less popular rooms? YES, the best rooms go to regular guests (who book direct) and those that book direct with the hotel
• Why are the booking sites (OTAs) allowed to impose a 'no discounting below the rates offered on our site' rule on hotels? We don't know, and it's illegal in Germany and Australia

Here's a comment on the Times article that neatly sums up our position:

How to book your holiday - 2020s style

It's that time of year again. We may not be in time to save you making a mistake with your skiing holiday but we guarantee you'll have a better experience this summer if you spend 5 minutes reading what follows.

But first, some statistics:

Booking.com sucked in $14.5 billion - yes that's $14,500,000,000 - in 2019. That's your money. Paid out in commissions by the hotels you are booking. The commission rates? generally between 15 and 28 percent.


Value for money?

Now, all of this would be fine if you - and the hotels - and all the other travel businesses - were getting value for money. But are you? Let's look at some of the practices of these online travel agencies (OTAs) and their clients (and when we say Booking.com we mean all the OTAs, from Hotels.com to Expedia to Trivago and TripAdvisor)..

1.  Can you book direct with the hotel and receive a discount that acknowledges that you are saving them a shed-load of commission?

No: most of the OTAS have a clause in the small print that prohibits the hotel from undercutting the rate published on their site (and this is backed up by teams of mystery shoppers phoning the hotels and checking that they are not discounting to direct bookers).

2.  But surely I will be saving money by booking with them?

No: have another look at their advertising, which admittedly at first glance cleverly infers that will be the case, but it categorically is not; a good example is a well-known advertisement where two women are checking out of the hotel - and being charged wildly different rates. The inference is that the one using the booking site has cleverly got a bigger discount. Not true - see point 4 below.

3.  But they have other benefits - no cancellation fees, for example?

No: Very few - if any - hotels will deny a direct booker any of the so-called advantages offered by the booking site.

4.  So why am I being given the impression that I will get a) a better rate and b) extra benefits by using the booking site?

Because most hotels, in Europe at least, have good and not so good (often downright bad) rooms. The room may be the same grade or standard and even size, with the same facilities but it will suffer from one or more of the following...

• view - none or impaired
• location - far from amenities - sea, pool, dining area etc. - or, worse: the reverse!
• proximity to antisocial areas - kitchen, smoking area, staff parking, refuse collection, nightclub, busy road, noisy lift

And guess what? Those are the rooms that the hotel sells through the travel website.

What should I do?

Just one of a slew of articles about questionable practices at OTAs.

By all means use the OTAs to conduct your research - and read the reviews they invariably host. But book direct. Always. Here's a checklist...

• Call or email the hotel direct

• Tell them your preferred dates and ask for rates (often a hotel will reward you for choosing a marginally different date)

• Ask what other incentives they have for direct booking (hotels are increasingly good at negotiating their way around the OTAs restrictive practices): free upgrade, free meals and/or excursions, other added extras (e.g. free sports, free childcare)

• Ask for them to send you a photo of a) your exact room and b) the view from the window

• Pay your deposit by credit card - so you are covered in the event of no-performance by the hotel

• Get that all confirmed in writing

A bonus will be the fact that you will be on the hotel's unofficial list of guests saving them that stonking great commission - and how do you think that might alter their attitude towards you on your stay?

And finally: if you do manage to bundle up all the so-called advantages of booking your trip through an OTA and gain a marginal financial saving (do tell us if you do!) what will that be set against the goodwill of the hotel when you book direct? Do you want a happy holiday or a cheaper holiday? By following the six steps set out above you should achieve both - every time.

Hotels - OTA commission or PPC?

Adam Raphael's latest article on the GHG blog - always good value - focuses on the behaviour of the OTAs.

But he also asks a pertinent question of hoteliers:

"If hotels, particularly the sort of small owner managed properties that the Guide specialises in, spent more time and resources on direct marketing that would help wean them off the quick fix that hotel booking sites provide."

An example of TripAdvisor's unfriendly behaviour is given, using Frog Street Farmhouse Hotel near Taunton (read the full article here). This is what they look like in search...

...and this is what they look like in a map search...

...so what could they do? How about the following...

• ask all their guests to post a review to Google - they currently have just nine
• tell all their guests who have booked through an OTA just what the OTA has creamed off - and encourage them to tell all their friends and acquaintances
• tell all their guests that they are prevented from offering a discount by the OTA T&Cs
• tell all their guests to book direct next time - and every time they stay at a hotel (and tell them exactly what the OTA T&Cs will allow them to offer in return for doing so)

...and what could the GHG do? How about a campaign to alert guests to just how much of their hard-earned cash is being trousered by the OTAs? A PR push (after all, the mainstream press has lost all that revenue from hotel advertising to the OTAs!)? Just a thought.


Are the OTAs offering added value for their enormous slice of the hospitality cake?

They were. When the internet was in its infancy, and hotel websites were next-to-useless - and, most important of all, before Google became as dominant as it now in the world of reviews - using a site like Booking.com or TripAdvisor short-circuited the tedious job of finding a hotel and seeing what recent guests had to say about it.

But now, in 2018? A decent website, returned in a Google search for the hotel's location, with plenty of reviews on Google, is all that should be needed. It would be a brave hotel indeed that unilaterally cancelled all its agreements with the OTAs, but that does not mean they should simply lie down an accept that a massive chunk of their revenue is going to be passed through organisations whose software will cream off fifteen to thirty per cent of the gross while their shareholders are asleep in their very profitable beds.


And finally...

As much as the OTAs will shout about how they 'help' hotels and 'help' consumers, it may surprise some of our younger readers to know that people stayed in hotels well before the OTAs existed, and that it's conceivable that the one business the OTAs has really helped is AirBnB - by driving hotel margins down so far - and the resulting service - that many people see no added value in staying in a hotel any more. £35 for breakfast anyone?

OTA Commissions: Hilton fights back

Here's Hilton Honors' campaign designed to encourage their guests to book direct:

It addresses half the problem: the perception that guests will get a better deal by booking through an OTA.

The other half? Your potential guests' insatiable thirst for reviews - and by reviews we mean words and pictures. To satisfy this demand the hotel needs independently verified reviews hosted on their own site - preferably right next to their booking engine. Then - at last - perhaps they may have a solution. We'll - at least half a solution, which has to be better than none at all.

  Here's the Venetian in Macao's 'Best Rate Guarantee'

Our suggestion for the 'price' half? Well, it's really none of our business as professional review managers, but how about a banner with "Guaranteed best rate available" on your site, accompanied by a John Lewis type 'refund the difference' policy?