3 ms·

Now I understand why hotels.com charges your credit card, then gives the hotel a different card number to charge.

• lotsofpulp 3y ago
  Hotels.com (Expedia) also has an option to pay the hotel directly. They used to require paying Expedia, and then Expedia pays the hotel, and I am guessing it was to expedite receipt of commissions (since they receive cash immediately and pay hotel the same cash minus commission at a later date). However, I think the integrations and payment terms with the major hotel brands have gotten good enough that Expedia now prefers to be paid a commission by the hotel. This benefits Expedia as they are no longer wasting money dealing with chargebacks and card processing fees. FYI, typically, a hotel franchisee will pay 10% to 15% to the hotel brand franchisor (Hilton/marriott/etc), and if the guest uses a travel agent like Expedia or Booking or any of the corporate travel ones, another 15% or more to the travel agent, and then the 3% to the payment processors. So for a guest who reserved via travel agent at a franchised hotel, ~30% of the room rate right off the top will not make it to the hotel itself. And that is excluding the typical 10% to 20% sales tax the guest pays the government on top of the room rate!
  • Scoundreller 3y ago
    > Hotels.com (Expedia) also has an option to pay the hotel directly. They used to require paying Expedia, and then Expedia pays the hotel, and I am guessing it was to expedite receipt of commissions Depending on the jurisdiction, if credit card commissions are high and the vendor/hotel aren’t setup for bank transfers, this avoids paying 2x Amex/mastercard/visa commissions.