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November 2005 : Quick Guide to Online Hotel Booking
- Beware of Hidden Service Charges – In the “Taxes and Charges” section of many popular websites there are extra service charges increasing your rates between $4.00 to $10.00 per night.
- Think Twice before making Upfront Payments – Even though the hotels themselves don’t require full payments in advance, many popular travel sites require advance payments in full.
- Are You Losing your Points – Keep in mind that when you book on many popular travel sites that arguably offer discounted rates, you will not earn frequent guest points from the hotel you are staying at.
- Be Wary of Lowest Rate Guarantees – Lowest Rate Guarantees are generally no more than gimmicks. Check the fine print, because generally they only apply for a very short period of time, like 24 hours, and if you qualify, you only get to avoid cancellation fees.
- Be Wary of 60% and 70% Discount Claims - Popular web sites claiming “as much as 60% or 70% off” may be misleading and are often not the lowest rates available. These claims are made based upon the hotel’s published off-the-street rate.
Advice: Check the individual hotels sites directly or use some of the newer online hotel consolidator sites that use direct only rates but cover all hotels in a global search with a booing capability, such as www.RoomRate.com.
A Hotel Wake-up Call – Many Mega-Travel Sites Not Such a Bargain
Washington, D.C. - You think you just saved loads of money booking a hotel room on one of the popular travel booking web sites, but the truth may have you tossing and turning all night. The fact of the matter is that you probably paid an extra $4 to $10 per night in additional hotel booking fees. Worse yet, there is a good chance that you probably did not get the lowest rate available, had to pay in full upfront and probably did not earn your frequent guest points from the hotel. If you think this is limited to fly-by-night web travel sites, think again. If you have used one of the mega-travel sites, such as Expedia, Hotels.com, Travelocity or Orbitz, you may have gotten less than you thought you bargained for.
Most people do not realize they are paying additional fees and their final rates are higher than initially quoted, because they are added at the very end of the booking process. We recently compared rates for a popular hotel in Washington, D.C. For the dates selected, the rate was $215 per night, the same as quoted on the hotel’s own site. The local tax rate for hotels was 14.5 percent, so the final rate should be $246.18 per night. But the Expedia rate was $251--a difference of $4.82 per night. It was hidden under the term “service fees.” For a typical three-night stay, that amounts to almost $15 in extra fees. For other hotels in downtown Washington, D.C. and nearby Arlington, Virginia suburban hotels, we found hidden fees that ranged from $4 to $9 per night. The same type of fees were found on Travelocity, Orbitz, and Hotels.com.
O.K., but you might be saying I saved on huge discounted rates, right? Not necessarily. In fact, in most places like Washington, D.C. it can be just the opposite. The popular mega-sites often use so-called “merchant model” rates. They contract with the hotel for inventory, mark up the rate to include taxes and fees, and sell it directly to the customer. The incredibly attractive discounted rates they advertise are usually based on the hotel’s published “rack rates”. Rack rates are typically the highest standard rates published by hotels, thus giving the appearance of massive discounts. However, the hotels themselves often have rates available that are lower than the supposedly super discounted rates advertised by the mega-sites. The reason is simple. The hotels are competing against their web discounter partners. The rates the mega-received from the hotels were pre-negotiated and fixed. The hotels, on the other hand, can quickly respond to market demand and offer better or the same pricing without all the hassles and restrictions imposed by the mega-sites.
The problems with merchant model based rates offered by mega-sites are not limited to possibly missing out on getting the lowest rate. There are other major potential drawbacks for the consumer. For example, on the mega-sites, a customer is typically required to pay the entire hotel bill on his credit card at the time of booking, even when only a credit card guarantee is required at the hotel. When you need to cancel or modify a reservation, the mega-sites may charge $25 or more to cancel, even though that charge is not required by the hotel and you could have cancelled at any time up to as close as 24 hours from check-in without penalty.
In addition to the pitfalls discussed above, there are other drawbacks that should be considered. When booking with mega-web sites you are often not earning frequent guest points with the hotel chain with whom you booked a room. Moreover, if there is a problem with your rate or reservation, chances are that the hotels cannot help you, and you will be referred to the mega-site’s reservation center to sort the problem out.
Finally, what about the “lowest rate guaranteed” deals that are promoted. Doesn’t that solve many of these problems? No, not exactly. Most of the guarantees are hardly worth their while. Many of the “lowest rate guarantees” are loaded with limitations and restrictions. For example, common “lowest rate guarantees” are limited to only 24 hours after you book. Even if you manage to find a lower rate within the small window of time provided, you don’t necessarily get the lower rate from the mega-site. Instead, they only allow you to cancel without a penalty. Yes, that is the same cancellation penalty would not exist in the first place if you booked a direct rate with a hotel.
Some Advice. By all means you should check the popular travel mega-sites for deals. However, before you take the next plunge, be sure to check direct hotel rate sources. Check the hotel web sites for competitive direct rates. Alternatively, if you want the convenience of searching and shopping multiple hotels, try one of the newer direct-only web sites such as www.RoomRate.com, which offers a wide range of hotels direct without any extra service fees, upfront payments or cancellation penalties.
Disclaimers and Notices:
Readers are free to fairly use and copy this article and redistribute it without prior permission, provided all copyrights, marks and attributions are retained.
Orbitz, Travelocity, Expedia, Hotels.com and RoomRate.com are either registered trademarks or trademarks of Orbitz, LLC, Traveloctiy.com, L.P., Expedia, Inc., Hotels.com, L.P. and Hotel Direct Networks, Inc, .respectively, and the author asserts no interest or claim in such marks, and all rights are owned and reserved by their respective owner.
The information provided herein is based on personal research conducted in August and September of 2005 and do not constitute a scientific study or definitive statement of the results that a consumer may experience at any particular time with any one or more travel sites. The statements provided in this article are based upon the author’s assessments of such search result information and should be considered opinions.
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