A new investigation by UK consumer watchdog Which? has found up to eight out of 10 hotels offer cheaper deals if booked direct as opposed to through OTAs and booking sites.
The convenience of booking through OTAs has long appealed to customers taking advantage of comparing hotel room costs across different websites, but Which? has advised holidaymakers that they could be better off booking direct over the phone.
Which? claims it contacted 10 hotels asking if they could offer a better deal than is offered by an OTA or on their own website and found eight said they were able to offer a better price or other incentives including breakfasts or upgrades.
The consumer champion compared room costs in 10 different UK hotels on booking.com before phoning them directly. In eight out of 10 instances, Which? says the hotels offered a better deal, with one hotel offering a £20 discount – saving 12% of the cost from booking online – and a free upgrade.
Other hotels reportedly included discounts on food and spa treatments, free breakfast and free parking.
The research highlights commission fees charged by OTAs like Booking.com and Expedia and ‘rate-parity clauses’ which prevent hotels from offering lower prices on their own website than those on OTA websites.
Rory Boland, editor of Which? Travel, said: “Customers shouldn’t be duped into thinking they’re getting the best prices from a hotel booking site when more often than not, they can get a better deal by avoiding its commission and booking directly with the hotel.”
A spokesperson from Booking.com said: “Properties choose whatever prices they want to list on Booking.com, which they can do at will and free of charge. Then Booking works hard to advertise their property for them to customers all over the world.”
“If Booking can indeed find them a customer, the property then (and only then) pays a small fee in exchange for the service.”
According to Which?, OTAs typically charge between 15% and 25% on each booking, which hotels and smaller accommodation properties often pass on to customers.
A spokesperson from Expedia said: “For the past 20-plus years, Expedia Group has helped hundreds of thousands of hoteliers compete for consumers’ business and provided transparency to the market, helping consumers discover these hotels quickly and efficiently.
“Our focus is on ensuring that the best rates and availability are presented to consumers in order to attract travellers to our sites to book with our partners.
“The ability to book packages with Expedia is a great example of this, where many hotels and certain airlines give us special discounted pricing as part of an ATOL protected package that are not offered as standalone purchases.”
Which? says rate-parity clauses have been banned in France, Italy and Austria for preventing competition, however the Competition and Markets Authority (CMA) in the UK chose not to ban the clauses in its recent review of the hotel booking industry.
Expedia added: “According to Oxford Economics, quantifying the impact of OTAs, as much as 82% of bookings through an OTA go to independent hotels whose share of the overall EU market for hotel bookings is much lower at 57%, making it fair to say that OTAs level the playing field for small hotels versus the big global chains.”
Which? says a small B&B owner claimed that the OTAs influence over the market resulted in them stealing direct customers from them, and that they were “punished” for challenging them on their control of search engine listings.
A letter seen by Which? Travel from Booking.com to another B&B owner who tried to offer better prices on their own website stated that by undercutting the OTA they risked “lower visibility and slower business growth.”
A spokesperson for Booking.com said: “If a hotel or small bed & breakfast in the countryside for example, were to advertise on TV in markets all over the world in order to find customers and generate business, it would likely be so expensive that the properties would need to charge even higher prices for their rooms in order to stay in business.
“Booking.com is a much more cost-effective platform for properties to advertise, allowing them to pay only when they generate actual business.”
According to Which? the ways to find the best room rate include searching property names, emailing or calling the hotel directly and ask if they can better their rate.
Boland said: “Hotel booking sites might be a good place to start your search, but you should always call or email the hotel for the best change of getting the cheapest deal – even in cases where they can’t offer a better price, there’s a good chance they’ll throw in a freebie or two.”
Simon Llanos, marketing director at Hong-Kong based attraction tickets retailer Klook, said:
“Hotels are in a legacy state which means they can find it challenging to innovate as quickly as tech firms.
“Comparison sites strive to offer travellers the best deals, and online travel agents are able to connect hotels, tour operators and merchants, particularly those who are off the beaten track, to travellers around the world.
“In doing so it helps to boost both their exposure as well as the experiences of those travelling, and looking for something unique and exciting.
“Online travel agents provide a huge number of benefits to travellers, from ease of search and discovery to ease of booking.
“Many travellers now are spontaneous and mobile first. 75% of our bookings originate via app, and 90% of our tours, travel options and places to stay are available for instant booking, providing a level of spontaneity, speed, and access to alternative experiences, that could be more challenging to find if travellers needed to manually search and find the cheapest prices.
“The industry average for instant bookings is less than 15%, highlighting the need more than ever for technology to improve the experience for travellers.”