Are you getting the best travel deals by booking thru online booking engines (OTA’s)? Or are you losing options because the travel industry is being gobbled up by key players like Expedia, Sabre (the booking engine for American Airlines) and other large players, not unlike the Walmart experience in the 1980’s and 90’s? What does that mean to you as a traveling guest? Since travel statistics tell us we shop 4-6 sites before we then book online, is the ease of using a large booking engine like Expedia or Travelocity costing me? The answer to that could be, maybe. Maybe more than you understand.
History of Travel Websites
The last couple of years have seen lots of consolidations and mergers. Google, Facebook, and TripAdvisor are trying to find ways to make their free websites money makers. Besides having to deal with maddening ads on our emails and other places that were once free, many of us are beginning to find out there really is “no free lunch”. So what’s the back story?
In the last year or so, Expedia has bought up several smaller players, Bedandbreakfast.com, Homeaway (which had mainly dealt with vacation rentals), Rezovation, which was one of the several small lodging system reservation softwares and was previously purchased by HomeAway. Sabre, (one of the top systems used by travel agents), recently bought InnLink, one of several channel managers (the software companies that allows properties to connect to travel agents). In addition, Expedia had long owned Travelocity, Hotwire, Hotels.com, Orbitz and probably a few others. Priceline owns Booking .com. All in all, that looks like a pretty decent growing monopoly.
Bill McGee, contributing editor to Consumer Reports, in a 2015 article for USA Today wrote ” …there’s a long history of consumers not benefitting from mergers and acquisitions. And in most industries, customers are best served when competitors fight fiercely to please them, not link arms as siblings. Gobbling up the competition may help a parent company’s bottom line, but it weakens the marketplace for consumers”.
Changes Affecting The Bottom Line
Small boutique hotels, inns, and bed and breakfasts have only recently had the opportunity to be recognized on the large travel search engines. And previously, with the introduction of the internet, these small properties could easily be seen thru their websites and compete head to head. But with the advent of paid positioning, large companies like Expedia and Priceline can again knock out the presence of smaller properties. To be seen, these small properties are forced to be on the large travel sites, at a cost of somewhere between 15-20% of their revenue when booked thru the OTA’s (online travel agencies) .
The original thought was that the exposure to much larger sites and more people would increase occupancy allowing for the best travel deals, but the fact for most smaller properties, already offering many more amenities and usually at a lower price than hotels, (such as: free gourmet breakfasts, free wifi, free parking, free snacks, complimentary wine, jacuzzi’s, free VCR movies, and concierge service, just to name a few), is that their bottom line is decreasing due to the middle man. Many have already cut as much as they can and now are beginning to raise rates. So who bears the brunt of this, as the OTA’s offer their “best travel deals” and take their bite out of the middle; the traveling public.
What is the Solution?
The solution, since most people check several sites before they book a specific property: check the actual website of the property you’re interested in before you book and look for special offers that reduce price, amenities that are offered when booked directly that are not offered anywhere else. Properties that are on top of their game are offering more if you book directly and allow booking right on line, taking credit cards as larger properties do.
Supporting small business in America, in the words of our newest President, will “make America great again”. But this act doesn’t require anything but a desire to get the best travel deal that’s available and a realization that there really is “no free lunch”. Businesses who consistently sell less than their bottom line won’t be around for very long, and that hurts us all. And most of us are more interested in a good experience, although none of us want to pay more than we have too.
The Best Travel Deal?
YOU MEAN CHARGE FOR EVERYTHING??
So what can savvy customers do to make sure they get the best deal? Do your shopping online, then book the property directly. Make sure you’re actually on the individual properties website. OTA’s are working to fool you online into thinking they are the actual property. Individual properties offer travel specials not available on OTA’s. For an example of the discounts properties offer directly, check out the rooms at the Empress.
The Pot of Gold
You’ll win by getting more bang for your buck, they’ll win, keeping their bottom line down and at home, the industry wins since competition will give us all more choices. Buy local, buy small business, buy American! What could be more American, except maybe applie pie!!
Special credit goes to Stephen and Keegan at Q4Launch Marketing for their expertise and help.
Sharon Welch-Blair has been an innkeeper, inn-owner for 23 years and seen amazing changes from the internet to mobile booking. She is also a Financial Planner and Investment Advisor and owns her own business “Empire Financial Architects” for 30 years. She holds two degrees from the American College of Insurance and Financial Planning. Contact Sharon directly at hostess@theEmpress.com.