7 ms·

Could you elaborate on how the merchant model vs the agency model works in online hotels booking sites? I have not heard this before.

sankyo 9y ago
Merchant model is where the OTA (online travel agency) is the merchant of record. Your credit card is debited by the OTA when you book. Behind the scenes, OTA buys N room nights from the hotel chain for some discounted price, and sells the room nights via their site. Agency is where OTA acts as an agent between customer and lodging supplier. The OTA takes a fee and/or percent cut of the booking. Usually the customer pays the hotel directly upon checkin, and the hotel in turn pays the OTA. Booking.com uses the Agency model and they dominate Europe. Expedia is strong in North America and struggles to get a foothold in other regions. Expedia now uses the agency model and merchant model. Europeans understandably do not prefer to pay for the hotel stay at the time of booking. There are more nuances, but that is basically how it works.
- beambot 9y ago
  > Europeans understandably do not prefer to pay for the hotel stay at the time of booking. I do not understand the obviousness of "understandably". Seems like a likely culture difference. Explain?
  - paganel 9y ago
    Not sure what the OP meant, as I'm an European who does all of his traveling through Booking.com and as such I've encountered both situations, I'd say in equal measure: i.e. I've either paid the booking up-front or I've paid it after the stay was over (at check-out). I slightly prefer to pay at check-out, but that is in no way a stopping point for me when shopping for accommodation. What Booking.com is really excellent for is that it just works and that it takes away a lot of the stress when traveling. Just by filtering on 8+ -rated reviews and by your desired nightly pay and you're sure to get what you want, no hidden gotchas, no anything.
    - DrScump 9y ago
      It "just works"... except when reviews and ratings and inventory ("just 1 room left!") are bogus, as I experienced last week.
      - paganel 9y ago
        Yeah, I've recently noticed the "just 1 room left!" thingie, I generally tend to ignore it, as I travel by myself or with my gf. The reviews have held up for me, though. Granted, I also look at the number of reviews and at way those reviews are written, if it seems like there's something fishy I just skip it. On top of that I use TripAdvisor, which is really holding up pretty well for me in terms of traveler reviews.
        user5994461 9y ago
        FYI: TripAdvisor is an expedia brand.
        blackoil 9y ago
        Expedia sold trip advisor few years back, now they own another Meta Trivago.
        user5994461 9y ago
        It was never sold. They are both part of the Expedia brands.
        skronch 9y ago
        In December 2011, TripAdvisor was spun off from Expedia in a public offering. [https://en.wikipedia.org/wiki/TripAdvisor#cite_note-16 https://en.wikipedia.org/wiki/TripAdvisor#cite_note-16]
        user5994461 9y ago

sankyo 9y ago

Merchant model is where the OTA (online travel agency) is the merchant of record. Your credit card is debited by the OTA when you book. Behind the scenes, OTA buys N room nights from the hotel chain for some discounted price, and sells the room nights via their site. Agency is where OTA acts as an agent between customer and lodging supplier. The OTA takes a fee and/or percent cut of the booking. Usually the customer pays the hotel directly upon checkin, and the hotel in turn pays the OTA. Booking.com uses the Agency model and they dominate Europe. Expedia is strong in North America and struggles to get a foothold in other regions. Expedia now uses the agency model and merchant model. Europeans understandably do not prefer to pay for the hotel stay at the time of booking. There are more nuances, but that is basically how it works.

beambot 9y ago
> Europeans understandably do not prefer to pay for the hotel stay at the time of booking. I do not understand the obviousness of "understandably". Seems like a likely culture difference. Explain?
- paganel 9y ago
  Not sure what the OP meant, as I'm an European who does all of his traveling through Booking.com and as such I've encountered both situations, I'd say in equal measure: i.e. I've either paid the booking up-front or I've paid it after the stay was over (at check-out). I slightly prefer to pay at check-out, but that is in no way a stopping point for me when shopping for accommodation. What Booking.com is really excellent for is that it just works and that it takes away a lot of the stress when traveling. Just by filtering on 8+ -rated reviews and by your desired nightly pay and you're sure to get what you want, no hidden gotchas, no anything.
  - DrScump 9y ago
    It "just works"... except when reviews and ratings and inventory ("just 1 room left!") are bogus, as I experienced last week.
    - paganel 9y ago
      Yeah, I've recently noticed the "just 1 room left!" thingie, I generally tend to ignore it, as I travel by myself or with my gf. The reviews have held up for me, though. Granted, I also look at the number of reviews and at way those reviews are written, if it seems like there's something fishy I just skip it. On top of that I use TripAdvisor, which is really holding up pretty well for me in terms of traveler reviews.
      - user5994461 9y ago
        FYI: TripAdvisor is an expedia brand.
        blackoil 9y ago
        Expedia sold trip advisor few years back, now they own another Meta Trivago.
        user5994461 9y ago
        It was never sold. They are both part of the Expedia brands.
        skronch 9y ago
        In December 2011, TripAdvisor was spun off from Expedia in a public offering. [https://en.wikipedia.org/wiki/TripAdvisor#cite_note-16 https://en.wikipedia.org/wiki/TripAdvisor#cite_note-16]
        user5994461 9y ago