In making my research rounds visiting the hotels I recommend in my guidebooks, I heard a recurring frustration from hoteliers. Slowly a bigger portion of their business is coming from websites that book rooms for travelers.
Expedia is a powerhouse in this field. Hotels report that Expedia takes a 30 percent commission from the hotels and charges a 10 percent booking fee of the traveler. So for a $100 room, the traveler pays $110 and the hotel gets $70. Obviously, hotels (dealing with the very high costs of business, employing people and local taxes) need to jack up their rates to make up for the 30 percent loss.
One hotelier at my favorite hotel in Amsterdam said that when he travels, he (as an insider) employs a simple trick. He visits Expedia and finds a hotel he likes. Knowing that hotel will net 70 percent of the room rate listed, he then contacts that hotel directly and offers 75 percent of the rack rate listed on the Web. He gets that $100 room for $75 rather than the $110 less-savvy Expedia customers would pay and the hotel, which would be satisfied with $70 actually gets $75. Everybody (except Expedia) wins.
Reading my piles of feedback, I get many reports of bait and switch practices from hotels advertising online.
Here's an example from Julie Marcotte:
Remember that the Web can be a great source of supplemental information. But hotels tied in with online booking agencies offer "rack rates" and lose a cut to the agency. You're more likely to get the net rate when you book direct. Also, any place can look good online. Browse the Internet. But consider anything you see online an advertisement, not a review. These days non-nondescript hotels spend big bucks to look good in cyberspace. Guidebook writers personally visit hotels and give a frank appraisal of their value to travelers.
Next Avenue Editors Also Recommend:
Next Avenue is bringing you stories that are not only motivating and inspiring but are also changing lives. We know that because we hear it from our readers every single day. One reader says,
"Every time I read a post, I feel like I'm able to take a single, clear lesson away from it, which is why I think it's so great."
Your generous donation will help us continue to bring you the information you care about. What story will you help make possible?