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I was actually surprised (some) online booking agencies actually vet the locations they sell. So there is significant cost to scouting and vetting the hotels, i
by rplnt 9y ago
I was actually surprised (some) online booking agencies actually vet the locations they sell. So there is significant cost to scouting and vetting the hotels, i.e. to protect the customer. They also offer some various guarantees which have to be factored into the commission.
I'm fairly certain Google skips all of this, so I would say their profit is effectively (much) higher.
What sucks about the former approach is that booking portals make sort of an exclusive deal, where the price they advertise (with their cut) is as low as a direct sell.
- jpalomaki 9y agoWhat I find interesting is that I've seen cases where you don't even find a matching price from the hotels own booking system. I understand they can't go lower than booking site due to contracts, but it would make sense to offer at least similar rates in order to attract direct bookings.
- notahacker 9y agoThey'll pick up direct bookings from people who aren't interested in price comparisons and "special offer, only three rooms left, no refund" though. Same as few service providers choose to match their Groupon price on their own website. They'll have done some sort of estimate that the revenue they lose from charging direct bookers lower prices is greater than the revenue they lose from people comparing their price with the OTA price, even if that estimation is on the back of an envelope.