Ever wonder who is ultimately behind the hotels and resorts you book online or through a travel agency?
Sunday, 12 Jan, 2017
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Of course, it could be direct with the hotel & resort, or equally or more likely from an online travel agency (i.e. Bookings.com, Expedia, Hotels.com..), metasearch sites (i.e. Kayak, Skyscanner, etc.) and intermediaries (i.e. Google, Trip Advisor, etc.).
The online travel agencies will typically have bulk contract special rates and block room inventory with hotels and re-sells them direct to consumers and/or to online and offline travel agencies, at a discount, who in-turn re-sells them to the consumer. The metasearch sites, search the hotels reservation system, as well as online travel agencies for the best hotel rates for consumers to shop and book.
At the end of the day, the price the consumer pays through the online and offline travel agencies, metasearch sites or intermediaries are usually lower or same as the hotel might offer directly to the general public. Many of the large hotel chains require consumer ‘rate-parity’ between what the re-sellers they sell to and what the hotel offers direct to consumers (i.e. you can’t sell it at a lower price than us).
Due to most hotels around the world operate with empty rooms throughout the year, ‘rate-parity’ will not apply in reality for dates they are likely to have empty rooms. The hotels are willing to sell low to the resellers and wholesalers who take care of the ‘customer acquisition’ distribution, and ensure the hotel is operating at full capacity. Of course, if the hotel believes they can sell the rooms directly to the public at less discounted rates for certain dates, they will not allocate rooms to resellers for those dates, or allocate much fewer rooms for them to sell.
The larger online agencies and hotel wholesalers (sell only through travel agencies and tour operators) will often negotiate with and pay hotels for an exclusive ‘room block’, in advance, to ensure they have rooms to sell during the peak travel season.
The hotel room inventory are rooms the wholesaler blocked with the hotel and/or via computer interface directly with the hotels’ inventory system, which allocate a limited number of rooms for these special contract rate rooms.
Charles Kao
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