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Why it doesn’t always pay to book a hotel directly (and what to do instead)
Hunting for the best possible deals while planning for your next travel destination can be a rather involved process. If you’re anything like me, aside from the best airline prices, you like stretching that dollar for the best possible hotel room and lodging rates you can get. This usually means combing through different travel agency websites and hotel direct booking services in search for the best discounts available.
Right now, you can search through numerous travel services including Expedia, TripAdvisor, Priceline.com, Booking.com, and Kayak or go directly to a hotel chain’s website to compare prices.
So to give you some idea of where all this is leading to, the main question is this – Does it always pay to do a direct booking with a hotel as opposed to online travel services?
This study sought to find out.
Piper Jaffray Report
A report from research company Piper Jaffray indicates that you won’t necessarily save money if you book directly with hotels instead of online travel agencies like Priceline, Expedia or Booking.com, or with travel search sites like Kayak.
Piper Jaffray analysts sampled data of hotels from the top four chains, namely, InterContinental Hotels Group, Marriott International, Hilton, and Wyndham Hotel Group in the top 25 largest cities worldwide and found that booking on a hotel’s website directly will only save you money in about 14 percent of the hotels in the study.
In fact, 21 percent of the bookings in the report were cheaper when done via online travel agencies or travel search site.
A majority (66 percent) of the hotels in the sample had the same listed price via online travel agencies and travel search sites, which means that 34 percent of the hotels in the study had inconsistent pricings across different sources.
Online travel agencies or search sites that offered cheaper prices can save you money by an average of 4.2 percent. Direct hotel bookings that are cheaper than online travel agencies or search sites were less expensive by an average of 3.8 percent.
All in all, Piper Jaffray analysts found prices for 86 hotels worldwide on both the hotel’s direct booking website and from online travel agencies and search sites, comparing the regular/flexible rates between them.
To eliminate bias, they took the largest 25 cities worldwide and “randomly chose the hotels within one of those four hotel chains within each city.”
Keep in mind that Piper Jaffray did not include loyalty member discounts and compared just the normal rates in the study.
According to Michael J. Olson, co-author of the Piper Jaffray report, their results provide evidence that “consumers will not begin to shift towards hotel direct as a primary booking option” despite the perks, marketing efforts, loyalty plans and product enhancements that hotel chains have put in place to attract more customers.
Results from another Piper Jaffray study that surveyed 1,000 customers showed that while more travelers are starting to book their trips online, fewer are opting for direct booking on hotel websites.
Do this instead for the cheapest possible rates
These studies suggest that if hotels want to increase their direct bookings, they will have to raise the public’s awareness about the benefits of direct bookings through loyalty membership programs that are cheaper than online travel agency and search site rates.
But even then, as long as there are pricing inconsistencies across different booking sources and online travel agencies periodically offer cheaper rates, consumers will keep checking and comparing multiple sites before booking.
This means non-direct hotel bookings and online travel agencies and search sites will continue being viable avenues for cheaper rates.
However, if you’re a frequent traveler, joining a hotel chain’s loyalty or rewards program is still the best way to get the cheapest rooms.
Want more savings? Here are the best money-saving tips for the frugal traveler.
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