4 ms·

I’m a receptionist, handle about 150 bookings a week. Two-thirds direct, the other one-third are third-party booking sites. Booking.com (Agoda, Priceline, Kayak

by fwlr 4y ago

I’m a receptionist, handle about 150 bookings a week. Two-thirds direct, the other one-third are third-party booking sites. Booking.com (Agoda, Priceline, Kayak) makes up about half of that one-third. The other half of the one-third is equally split between Expedia (hotels.com, Orbitz, Travelocity, Wotif, Trivago) and a big bunch of various corporate travel agents and agencies. Despite the proliferation of booking sites on the web, all of them are either part of Bookings Holdings (Booking.com’s parent company, 17bln revenue last year), or part of Expedia Group (11bln revenue last year), and I would expect the distributions of third party bookings at most hotels to roughly reflect that revenue split. There is one other competing group, Trip.com (5bln), but they mostly service China and don’t have as much penetration into Western markets as far as I know.

gardenhedge 4y ago
Very interesting! Do you think there is space for small or niche players?
- fwlr 4y ago
  No. Yes, there is space for small niche sites with certain angles, but all of those sites will still be owned by one of the big two parents. There isn’t even much space for a niche player intending to eventually get bought out by one of the big groups like you see in some software fields, because hotels are pretty risk-averse in general and won’t just hand out access to their reservation channels to small players easily.
  - ricktdotorg 4y ago
    great mini-thread! thank you for your industry insight!
- splonk 4y ago
  I did some work on hotel booking for one of the the "small" players in the space (at the time, a distant third in the EU after Booking/Expedia). The majority of their room availability was sourced through the two big players. That's probably going to be the case for most aggregators, and there's a fair chance that your favorite non-Booking/Expedia aggregator is actually just selling you their content and collecting around 10%.
  - carlosjobim 4y ago
    Much less than 10% usually for these 4th-party aggregators.
severino 4y ago
In a hotel like yours, does making the reservation direct, rather than using third-party services, makes any difference (i.e., rates, more available rooms, etc)?
- fwlr 4y ago
  The only difference is price. The money we get from a third-party site after they take their commission comes out to the same as what we get direct, so the guest is simply paying the third-party site’s commission (usually around 10-12%). It’s that way because we set the price on their channel. The only other downside is changing your booking has to go through them instead of us, and cancellations have to abide by their policies in addition to ours. In practice this doesn’t make much difference to the end result, but it sometimes adds a bit of friction for some guests. Room availability, staff service, everything else is identical. We have no incentive to encourage you to cut out the middleman and thus we don’t, but to my knowledge we also aren’t prohibited from doing that. Customers do sometimes ask about this stuff and I say “if you know exactly where you want to stay, might as well book direct to save a few dollars, but those sites offer a real service in helping you find a good place when you’re unfamiliar with the area”. Customers also sometimes say they can get a better rate on an OTA than what we are offering, and I always encourage them to book with whatever method gets them the best deal - “we honor all bookings and you will get the exact same room either way”. Usually that better price does not materialize, the guest realizes they were looking at a cheaper room or even a different hotel, though it does happen from time to time even with us (which I have never been able to understand; the OTA must simply be choosing to lose money on those bookings for some reason). We do not overbook, nor do we allow OTAs to overbook. (I don’t know how representative this is of hotels in general; the owner is particularly upstanding and moral, kind of a “pillar of the community” guy, so this might be an unusually fair setup. But I’ve never heard a customer say we’re unusually fair, so I think this probably is pretty common.) Essentially the role OTAs play in our case is they are a search engine and perhaps a more convenient booking process, nothing more. I believe this is a common way hotels use OTAs, though that’s just my impression. The other common way hotels use OTAs is more tightly integrated, OTAs get to do variable pricing and probably other things I don’t know about since we don’t join any of those programs. I can’t speak to those arrangements but I imagine that’s what is going on when the OTA can offer you a better rate than the hotel direct, which definitely does happen with some hotels. That might also be what is going on when you ask questions about OTA rates and it feels like the staff member is under a gag order, but again, I do not know anything at all about that mode of OTA integration.
deleted 4y ago
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by fwlr 4y ago

gardenhedge 4y ago

Very interesting! Do you think there is space for small or niche players?

fwlr 4y ago
No. Yes, there is space for small niche sites with certain angles, but all of those sites will still be owned by one of the big two parents. There isn’t even much space for a niche player intending to eventually get bought out by one of the big groups like you see in some software fields, because hotels are pretty risk-averse in general and won’t just hand out access to their reservation channels to small players easily.
- ricktdotorg 4y ago
  great mini-thread! thank you for your industry insight!
splonk 4y ago
I did some work on hotel booking for one of the the "small" players in the space (at the time, a distant third in the EU after Booking/Expedia). The majority of their room availability was sourced through the two big players. That's probably going to be the case for most aggregators, and there's a fair chance that your favorite non-Booking/Expedia aggregator is actually just selling you their content and collecting around 10%.
- carlosjobim 4y ago
  Much less than 10% usually for these 4th-party aggregators.

severino 4y ago

In a hotel like yours, does making the reservation direct, rather than using third-party services, makes any difference (i.e., rates, more available rooms, etc)?

fwlr 4y ago
The only difference is price. The money we get from a third-party site after they take their commission comes out to the same as what we get direct, so the guest is simply paying the third-party site’s commission (usually around 10-12%). It’s that way because we set the price on their channel. The only other downside is changing your booking has to go through them instead of us, and cancellations have to abide by their policies in addition to ours. In practice this doesn’t make much difference to the end result, but it sometimes adds a bit of friction for some guests. Room availability, staff service, everything else is identical. We have no incentive to encourage you to cut out the middleman and thus we don’t, but to my knowledge we also aren’t prohibited from doing that. Customers do sometimes ask about this stuff and I say “if you know exactly where you want to stay, might as well book direct to save a few dollars, but those sites offer a real service in helping you find a good place when you’re unfamiliar with the area”. Customers also sometimes say they can get a better rate on an OTA than what we are offering, and I always encourage them to book with whatever method gets them the best deal - “we honor all bookings and you will get the exact same room either way”. Usually that better price does not materialize, the guest realizes they were looking at a cheaper room or even a different hotel, though it does happen from time to time even with us (which I have never been able to understand; the OTA must simply be choosing to lose money on those bookings for some reason). We do not overbook, nor do we allow OTAs to overbook. (I don’t know how representative this is of hotels in general; the owner is particularly upstanding and moral, kind of a “pillar of the community” guy, so this might be an unusually fair setup. But I’ve never heard a customer say we’re unusually fair, so I think this probably is pretty common.) Essentially the role OTAs play in our case is they are a search engine and perhaps a more convenient booking process, nothing more. I believe this is a common way hotels use OTAs, though that’s just my impression. The other common way hotels use OTAs is more tightly integrated, OTAs get to do variable pricing and probably other things I don’t know about since we don’t join any of those programs. I can’t speak to those arrangements but I imagine that’s what is going on when the OTA can offer you a better rate than the hotel direct, which definitely does happen with some hotels. That might also be what is going on when you ask questions about OTA rates and it feels like the staff member is under a gag order, but again, I do not know anything at all about that mode of OTA integration.

deleted 4y ago

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