Online hotel booking websites are good at making you think you’re getting a bargain. And they want you to move fast because, as they put it, ‘there are only two rooms left’ and the hotel is experiencing ‘high demand’.
But last week, the Competition and Markets Authority (CMA) announced that it will take ‘enforcement action to end misleading sales tactics, hidden charges and other practices in the online hotel booking market’.
And it made a point of naming booking.com, Expedia, agoda.com, hotels.com and Ebookers among others as the companies under investigation for pressure selling, issuing misleading information, levying hidden charges and determining a hotel’s position on their websites based on how much that hotel has paid in commission.
‘Online hotel booking websites are good at making you think you’re getting a bargain’
But many in the travel industry think this is too little too late and have no confidence that the online agents will clean up their act.
‘Many people are unaware that by booking through an online agent they will often get a worse deal than if they book directly with the hotel,’ says Adam Raphael, editor of the Good Hotel Guide.
‘We will have to examine the fine print of any new regulations, but these huge corporations will find ways to pursue their commercial interests. They have vast resources to throw at any legal challenges made against them and they will argue endlessly about the interpretation of any new code of conduct.’
Online travel agencies, which have been given until September 1 to change their ways, account for half of all European hotel bookings, and the commissions they levy on hotels range from 15 to 30 per cent.
Even finding the official website of a hotel can be difficult. One ploy is to make you think you’re about to click on the official site when, in fact, it’s a booking agent, and when they say that ‘four other people are looking at your top choice’ the inference is that they are looking for the same day as you, but that is unlikely to be the case.
It’s also worth remembering that these agencies practically run the whole show. Expedia and Booking Holdings between them control 95 per cent of the online hotel booking businesses.
Expedia, scheduled to move its headquarters later this year from Bellevue to nearby Seattle in the U.S., was launched as a division of Microsoft in 1996 before being sold on in 2001. Since then, it has taken over dozens of online affiliates, such as tripadvisor.com, hotels.com, trivago.com, travelocity.com and hotwire.com.
Booking Holdings, which until last February was called Priceline, was founded in 1997 and became a public company only two years later. Based in Norwalk, Connecticut, its revenues in 2017 amounted to nearly £10 billion. Its subsidiaries include booking.com, Kayak, agoda.com, cheapflights.com, rentalcars.com and opentable.com.
The table above shows that is really does pay off to book directly through a hotel or B&B
As well as paying commission to an online agency, hotels also have to pay Google and TripAdvisor a per-click fee — often as much as £2.50 — for every click that brings people to their websites, regardless of whether it leads to a booking.
David Farrance, 54, and his wife Louise, 50, ran Frog Street Farmhouse, near Taunton, as a B&B for ten years. But their experiences with the booking sites made them give up at Christmas in favour of renting the whole house on a self-catering basis, using a local agency.
‘They made our lives a misery and we felt we were running a business over which we had no control,’ says Mr Farrance.
For example, the Farrances had been paying £70 to £90 a month to the agencies in click-through fees, usually picking up half a dozen bookings in the process.
Then, suddenly, they had 40 clicks from India and 21 clicks from Japan. Their monthly bill almost doubled, but not one booking was produced. ‘I told TripAdvisor the clicks were not legitimate, but they didn’t want to know. They just said: “If you don’t like it you can always cancel your contract.” ’
The Farrances also had an issue with Expedia, whereby there was a double booking due to a glitch on Frog Street’s booking platform.
‘Expedia found the guests a place to stay which cost £240 rather than our £120 and said we would have to pay the difference, even though there were cheaper places nearby. The agencies take all the pleasure out of a business like ours.’
The online sites are undeniably fast and efficient, but what they tell you and the promises of ‘best price available’ are clearly meant to pressurise guests into booking.
We contacted eight hotels and B&Bs inquiring about a double room on February 20. Each time we were offered a better deal than the price given by the online agents.
This came as no surprise because it is always in the interests of hotels to do so. While it might not be a cheaper upfront price (because the online agents will penalise hotels by dropping them down the rankings if they do not agree to a rate parity), most hotels will throw in an upgrade or free breakfast or bottle of prosecco, anything to entice you to book direct so they don’t have to pay the booking fee.
When you go direct you can request a particular room, perhaps one with a bath rather than shower or one overlooking the garden.
You have no such control when booking with an online agent. So don’t fall for the alarmist language. Pick up the telephone and speak to someone. It will pay off.