Third-party Online Aggregators
Watch-out for Hidden Motives
By: Neil Salerno – February 2006
Thanks to electronic online newsletters and other media, we have access to news and articles from all over the world. This is how we stay current with travel industry trends and learn new ideas. Whether or not we agree with everything that is said, these online publications have become a necessity to those who want to stay informed.
Prejudiced articles are usually taken with a grain of salt, when we realize that the information contained in the article is heavily slanted towards promoting the author’s own business. The trick is to discern the motive.
You can imagine my surprise when I read such an article (You Paid How Much?), written for and by a major UK consumer online and offline newspaper, about third-party travel aggregators. It was only after reading the entire article that I realized that the author is obviously biased and has a lot to learn about hotel Internet sales; especially bizarre when the sign-off line leads to the newspaper’s own online booking portal.
The premise of the article was “Do online travel agents always offer the best deals?” Not any more, said the author. That statement immediately grabbed my attention. Apparently the author doesn’t consider his company’s booking portal to be an online booking agency. The article discussed air travel as well as hotels; since I am an hotelier, I will only address the field with which I am most familiar.
The author goes on to say that he checked several booking portals (online agencies) and found that the rates on the online travel sites were higher than the hotels’ own web sites; amazing; this, in spite of the fact that one of the travel aggregator sites “guaranteed” having the lowest rates.
First-off, I was unaware that any online travel agents ever really offered the best deals, no matter what their web sites may have said. Hotel franchises started all that nonsense. Apparently, the author doesn’t understand that first, hotels submit rates to the travel sites and that one rule of hotel electronic marketing is to create and maintain rate parity among all sales channels. Apparently, the sample hotels used in his article don’t understand rate parity either.
Online travel agents or travel aggregators use the rates provided by the hotels they sell. If these hotels are foolish enough to offer higher rates through online agents than they do on their own web sites, that’s their big shortsighted mistake.
The author of that article attributes the latest increase in direct-booked sales to the assumption that some hotels offer lower rates on their own sites than they do through third-parties. The premise is that people use travel sites to shop rates; then book direct. This may be true for many people, but frankly, I think the increase in direct bookings is more a result of improved online marketing and better site design on the part of hotels.
Unfortunately, many hoteliers resent the fact that online agents are in business to make a profit. Shameful, I know. Can you imagine actually wanting to make a profit?
Third-party agents spend $millions to expose hotels to the marketplace; even hotel franchise chains can’t afford that kind of exposure. It’s their “cost of sales”. Thanks to third-party web sites, hotels get world-wide internet exposure, which would be difficult to obtain through their franchises, alone; impossible for Independent hotels.
Short-sighted hoteliers want the business, which the third-parties can provide, but resent paying commissions and marketing expense. The rate games these hotels play are designed to make the guest absorb the commission by marking up the rates they provide to online agents. Does this make any sense to anyone?
If you hired a high-powered sales person to sell incremental business, would you give them only higher rates to sell and resent paying this person? Maybe some hotels would resent it, but they would be darn happy they got the extra business.
If you need business, and third-party online aggregators can provide that business, then “suck it up, folks”. They can produce needed business, but not for free. To make any attempt to pass this expense on to your guests is irresponsible and threatens to weaken public credibility in the entire online travel industry.
So everyone understands; hotels, and only hotels, control the rates which are offered on third-party web sites. To twist the facts and place the blame on the third-parties is unfounded. To be foolish enough to believe that guests only use third-party sites to comparison-shop is laughable. To encourage people to do so is just as laughable.
Frankly, I wish third-party sites would exclude rate cheating hotels and insist on rate parity. It would be a cleansing action.
There will always be many people who prefer the convenience of one-stop shopping for airline, hotel, and car rentals. There will also be many people who will forgo the extra effort to search the net for what may be the “best bargain”. This was true before the Internet, with offline travel agents and is still very true today.
For hotels that need additional marketing and the incremental business available through travel intermediaries, online or offline, please understand that the cost of this new business is an investment in future business. Next time, they may book directly with you anyway.
|Also See:||Great Opportunity for Independent Hotels - Cash-in on Electronic Sales / Neil Salerno / January 2006|
|Some Hoteliers Still Don’t Recognize the Benefits Derived from Third-party Listings; Shame, Shame, Shame on You! / Neil Salerno / January 2006|
|Online Hotel Rating Sites Driving Anxiety into the Hearts of Many Hotel Managers / Neil Salerno / December 2005|
|Hotel Web Site Priorities –Some Do’s, Don’ts; Why the Heck Did You Do That? / Neil Salerno / November 2005|
|The Best Hotel Sales Director I Ever Met; What Do The Good Ones Have in Common? / Neil Salerno / November 2005|
|The Best Hotel General Manager I Ever Met / Neil Salerno / October 2005|
|What’s your eMarketing Proficiency? Using Electronic Marketing Tools / Neil Salerno / October 2005|
|When Times Get Tough…Get Tougher! Sell Harder Before You Cave-in on Rates / Neil Salerno / September 2005|
|The Web Site Conundrum…Are You Winning the Electronic Marketing Game? / Neil Salerno / August 2005|
|Lions and Tigers and Bears…Oh My; The Hotel Yellow Brick Road is Less Scary than It Used to Be / Neil Salerno / August 2005|
|Running Dry on Good Hotel Ideas? It’s not What You Know - It’s Who You Know / Neil Salerno / July 2005|
|Revenue Grabbing Tips for Independent Hotels; Start Thinking Like the Chains / Neil Salerno / July 2005|
|Hotel Web Basics That Really Work…Content is King / Neil Salerno / July 2005|
|Hotel Supplier Sites versus Online Travel Agents; The War Chronicles / Neil Salerno / June 2005|
|New Hotel Technology Surround Us; Yet Face-to-face Selling is Still Most Productive / Neil Salerno / June 2005|
|The Internet…The Great Equalizer For Independent Hotels / Neil Salerno / June 2005|
|Third-Party Booking Sites Still Dominate Internet Sales; Why Do So Many Consider this Bad? / Neil Salerno / April 2005|
|Now That Online Hotel Booking Is Here to Stay, New Challenges Emerge / Neil Salerno / April 2005|
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|New Consumer Hotel Booking Preferences - They Love the Internet…Now What? / Neil Salerno / March 2005|
|Who Would Have Thought - Today's Hotel Marketing Necessity Is Also its Best Value / March 2005|
|Time For a Hotel Web Site “Make-Over”? Methods for Building a Successful Web Site Change / Neil Salerno / March 2005|
|Create Impact by Developing a Link Strategy For Your Hotel Web Site / Neil Salerno / February 2005|
|Steps to Develop Your Hotel's Presence on the Web / Neil Salerno / February 2005|
|Five Hotel Internet Marketing Myths - Busted!/ Neil Salerno / January 2005|
|How Does Your Hotel Web Site Measure-Up? 2005 Will Be the Internet’s Most Productive Year so Far / Neil Salerno / January 2005|
|Are You Being Out-Hustled By Your Competition? How to Dominate Your Hotel's Market Set / Neil Salerno / December 2004|
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|Don’t Compromise Your Goals In 2004; Five New Year’s Resolutions You Will Want To Keep / Neil Salerno / January 2004|
|No More Whining About Third-Party Suppliers; You Control Your Own Fate On The Net / Neil Salerno / December 2003|
|Six 'Maxi’s' Guaranteed To Boost Hotel Sales / Neil Salerno / November 2003|
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|Hotel Web Site & Search Engine Optimization; Always A Work In Progress / Neil L. Salerno / October 2003|
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|Are You Treating Third Party eWholesalers As Competititon Or a Valuable Marketing Partner? / Neil L. Salerno / August 2003|
|How Often Have You Heard, 'I could have gotten a better rate but the client saw our rates on the Internet' ? It’s Time To Get Back To Selling Location, Facilities, and Services / Neil L. Salerno / August 2003|
|Before You Begin that Marketing Plan Challenge Your Sales Team; Expect More and Get More / Neil L. Salerno / July 2003|
|Jump Up and Shout Yes - Delivering Best Online Customer Experience, Nice Job Vividence! / Neil L. Salerno / July 2003|
|Is The Internet Delivering On Its Promise? Well, It Depends on How you Look at It / Neil L. Salerno / June 2003|
|Coaching and Mentoring, Sometimes A New Paradigm Can Go A Long Way / Neil L. Salerno / June 2003|
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|Is It Time For A Sales Tune-up? How Healthy Was Your Last Forecast? / Neil L. Salerno / May 2003|
|Hotel Web Sites; Want it Creative or Effective? / Neil L. Salerno / May 2003|
|If You Always Do What You Have Always Done.... You’ll Always Get What You Always Got! Hotelier’s Mantra... Thinking Outside The Box / Neil L. Salerno / April 2003|
|Good Sales Planning - The Basics Still Work / Neil L. Salerno / April 2003|