OPIN­ION: WHY PAY­ING A LIT­TLE MORE CAN BE A GOOD IDEA

Don’t al­ways be drawn in by com­par­i­son sites

Business Traveller (Middle East) - - Contents - DEREK PI COT A HOTE­LIER FOR MORE THAN 30 YEARS AND AU­THOR OF HO­TEL RESER­VA­TIONS

E very­one wants the best price when buy­ing a ho­tel room, but you often get what you pay for. Com­par­i­son sites and on­line travel agents (OTAs) of­fer a use­ful ser­vice, al­low­ing con­sumers to eas­ily price check ac­com­mo­da­tion. And no one in the ho­tel busi­ness re­ally likes them.

The main de­mand for OTAs – or “third-party oper­a­tors” ( TPOs), as ho­tels re­fer to them – comes from in­di­vid­u­als who are spend­ing their own or their own com­pany’s money. But many in­de­pen­dent trav­ellers tell of dis­ap­point­ment upon ar­rival when the room they have booked through an OTA over­looks a kitchen ex­trac­tor fan, or has been con­verted from the house­keeper’s broom cup­board.

The book­ing process can seem easy and prices cheap via an OTA, but all may not be as it seems. There is pres­sure to buy, as OTAs cre­ate the im­pres­sion that the last rooms are quickly sell­ing out. In re­al­ity, this may be re­fer­ring only to those rooms al­lo­cated to the OTA’s site, with rooms still avail­able at the ho­tel; ho­tels cease to sell via third-party sites when de­mand picks up.

Ad­ver­tised dis­counts can also be mis­lead­ing, es­pe­cially where com­par­i­son prices may be us­ing high mid-week rates against a low week­end tar­iff. In the UK, reg­u­la­tion stip­u­lates that to ad­ver­tise a dis­count, the higher price must have been avail­able for at least 28 days prior. Un­for­tu­nately, this is not an in­ter­na­tional reg­u­la­tion, and so trav­ellers are ad­vised that

caveat emp­tor – buyer be­ware – ap­plies.

ROOM WITH A VIEW?

So why are rooms booked through OTAs some­times dis­ap­point­ing? Most ho­tels seg­ment their in­ven­tory (the in­dus­try term for rooms), and charge staged pre­mi­ums for things such as a bal­cony, sea view, moun­tain view, east view, west view or in fact any view, and la­bel the rooms as such. Then there re­main those rooms that are per­haps less de­sir­able, with features less ap­peal­ing to pro­mote. They should re­ally be called “next to the el­e­va­tor” or “room over­look­ing the fire es­cape”. Th­ese sit at the bot­tom of the in­ven­tory and are given the cheap­est rates.

The rea­son ho­tels aren’t en­am­oured with book­ings made via OTAs is easy to un­der­stand. On­line travel agents and third-party oper­a­tors such as Book­ing.com and Ex­pe­dia re­ceive a com­mis­sion for book­ings made through them. Rates vary, but they usu­ally start at ten per cent and can be as high as 25 per cent. To­tal in­ter­net-driven busi­ness ac­counts for at least onethird of al­most any ho­tel’s busi­ness, but per­haps less than a quar­ter of that one-third is gen­er­ated by the ho­tel op­er­a­tor’s own web­site; the OTAs can take a big chunk out of the profit mar­gin.

In re­sponse to the threat from OTAs, mid-sized ho­tel brands have started to con­sol­i­date to com­pete, in an at­tempt to con­trol the mar­ket bet­ter. Mar­riott has bought Sher­a­ton; Ac­cor has pur­chased Fair­mont, Raf­fles and now Mantra in Aus­tralia. In­ter­con­ti­nen­tal Ho­tels Group and Wyn­d­ham are also ag­gres­sively ac­quis­i­tive. I pre­dict that as ho­tel brands gain city-cen­tre con­trol, sites such as Book­ing.com will be left to mar­ket only the more ob­scure ho­tels in sec­ondary lo­ca­tions. The ho­tel chains’ aim is to sell rooms ex­clu­sively on their own web­sites and drive con­sumers to ho­tel brand loy­alty.

While a high de­gree of in­dus­try con­sol­i­da­tion is still some way off, the chains and the in­de­pen­dent ho­tels are cre­at­ing at­trac­tive deals for those who book di­rect. OTA con­tracts in­sist that ho­tels guar­an­tee that they are get­ting the low­est price, but con­tracts al­low ho­tels to of­fer “add ons” on an ex­clu­sive ba­sis via their own web­site. Th­ese in­clude in­vi­ta­tions to the bar, two din­ners for the price of one, happy hour drinks with canapés, early check-ins or free wifi. You may well also find some of th­ese of­fers if you join the ho­tel chain loy­alty scheme.

Any­one who books via OTAs should con­sider the fol­low­ing. Hav­ing se­lected your ho­tel on the OTA site, look at the ho­tel’s own web­site and cross check the price. If the OTA prices are cheaper, see if the ho­tel of­fers a low­est price guar­an­tee. Be aware that ben­e­fits might ac­crue by join­ing the ho­tel’s loy­alty scheme. A fi­nal word of ad­vice, al­ways be nice to the front desk staff – not just be­cause you should any­way, but be­cause they can im­prove your stay. Ask for a great room; you could even stoop to say­ing it’s your an­niver­sary. But don’t tell them it’s your birth­day – they can check that on your pass­port.

The chains and the in­de­pen­dent ho­tels are cre­at­ing at­trac­tive deals for those who book di­rect

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