Want the cheapest rate for a hotel room? Do what I do

Can an online travel agent (OTA) such as Expedia or Booking.com get you a better hotel deal than booking directly with the hotel? They’d like you to think so. Since they bulk buy millions of hotel rooms, OTAs make much of their power to deliver cheaper prices to consumers, but is that really the case?

Most of the time you’re better off booking directly with a hotel.Credit: iStock

Do OTAs deliver cheaper prices?

It’s hard to find any instance where an OTA will offer a cheaper price than the hotel on its own website for the same room and the same dates. If the OTA was the only seller of hotel rooms, they would control the market, and the price. But they’re competing with the hotel, the owner of the product they’re selling, and that acts as a brake on the OTA’s ability to charge a lower price than the hotels themselves.

In favour of OTAs

OTAs will sometimes let you book without paying a deposit, and cancel at the last minute, even a day or two before your booking. Hotels might also offer a similar book now, pay later facility, but their cancellation conditions are often more restrictive. Since they have huge market penetration, an OTA can probably re-sell a room that suffers a last-minute cancellation. A hotel has a tougher time replacing that late cancellation.

You’ll occasionally strike bargains on OTAs that are otherwise hard to find. New hotels might struggle to get a foothold in the marketplace. An OTA gives them instant market presence, alongside long-established players in the hospitality game. Until they achieve the occupancy rate they’re looking for, they might offer reduced prices via an OTA. The same applies to hotels with promotional deals: an OTA gives the hotel the facility to promote that deal to a wider audience than they could relying solely on their in-house promotions.

OTAs provide instant prices. To find out the price a hotel is charging for the same dates might take longer. You might even have to fill in a booking form and wait for a response.

How to make the best use of the information that OTAs provide

The OTAs have a tremendous overview of the hotel market, and that makes them invaluable when you’re doing your research. Say you want to book a hotel for a few days in Noosa. You’re not too fussed about staying in any particular hotel, you just want the best bang for your buck.

Head for Booking.com, Expedia or another major booking site, search “Noosa” and your dates and you’ll get a list of hotels in various price brackets. Choose a hotel, but then go to that hotel’s own website and check the price. Compare like with like – cancellation policies, deposit, whether breakfast is included. Almost certainly your chosen hotel will have a better price. If not, take a screenshot and ask the hotel if they can match the OTA’s deal.

If you want to book a particular hotel Google the name and you’ll usually get a box with prices from several OTAs, and sometimes the hotel’s own price.

OTAs have price parity agreements that prevent hotels from undercutting the OTA’s prices. While booking direct with a hotel might get you the same price as via an OTA, there are still plenty of good reasons to do so. There are subtle ways that a hotel can add value for guests who have booked direct, such as room upgrades, earlier check-in and later check-out, free in-room Wi-Fi. Guests who are members of a hotel’s loyalty scheme often get a warm welcome at the check-in desk. That’s rarely going to happen to those who book regularly through an OTA, and those bookings don’t earn reward points.

Booking direct establishes a relationship with the hotel. If you have a problem with your booking, if your room has a faulty air conditioner or a delinquent shower, the front desk is far more likely to go an extra mile to sort out your problem if you’ve booked and paid them rather than an OTA. That applies even more so if it’s a small hotel, or if it’s one you plan to visit regularly.

Bottom line, I’ve bought 300-plus hotel room nights this year and more than 95 per cent have been direct bookings with the hotels, the remainder via Booking.com.