There are lots of things businesses don’t advertise. They tend to focus on the positive aspects of the service they provide and skip over the not so desirable parts. Airlines, for example, don’t advertise the 87 minutes you’ll sit on the tarmac before being told that your pilot just went overtime and now you have to get off the plane and wait for a new one. Understandably, they tend to stick with the “we take you to exotic destinations” line instead.
Online travel agencies (OTAs for short) are no different. OTAs are travel booking sites like Expedia, Travelocity, and Priceline; and many sites like this don’t advertise everything they’re doing to try to win you over. But, that doesn’t mean they’re not happening. Many customers have complained about feeling duped when travel sites lead them to think they’re getting a hotel room for a low price, only to see extra taxes and fees at checkout that the site conveniently didn’t mention until that point.
OTAs might be doing a lot of other things they don’t want you to know about, because if you did know, you probably wouldn’t trust them for much longer. Well, here at Roomkey, we don’t pull the wool over your eyes. We’re dedicated to bringing truth and transparency back to an industry that’s been lacking it for way too long. That’s why we’re shedding light on four things that many OTAs aren’t telling you.
1. They Track Your Buying Interests
Cookies are the darling and the demon of the internet. They’re wonderful when you can just type in “g” and hit “Enter” and you’re magically transported to your Gmail account. They’re tolerable when they deliver you ads that are actually relevant because of the shirt you’re considering buying on your favorite retailer website. But cookies are evil when they’re used to charge you more.
You’ve probably heard the rumor that you should look up flights in an incognito window or delete your cookies before you book because travel sites might increase prices the more you show interest. Some online travel sites have been accused of using a similar strategy for price gauging hotel rooms. A 2015 study by the Algorithm Auditing Research Group at Northeastern University’s College of Computing and Information Science concluded that, “Yes, in some cases [the website’s software recognizes you and adjusts the price displayed based on that recognition], but the price differences are generally small.” In other cases, their tests found that OTAs sometimes returned hotel lists in differing order to returning site users, thereby steering some user groups toward higher-priced hotels.
In 2017, Wired magazine examined OTAs to see if they really do give travelers bargains like so many people think. Their short answer was, no. In fact, booking through the hotel or airline directly yielded them the best deals. In their research, they also uncovered some concerning findings about price discrepancies on OTA sites:
“Browser cookies give information to [OTAs] that can trigger price disparities. Your zip code and even your device can make a difference. For example, if you’re looking for a hotel room at 5 p.m. for that evening and you’re using your phone to search, the [OTA’s] algorithm will assume you’re more desperate than if you were using your desktop computer.”– Wired, Why Bargain Travel Sites May No Longer Be Bargains
After the 2015 study findings were released, Orbitz was exposed for steering Apple OSX users to more expensive hotels. Orbitz denied the claim, but ended the practice soon after. They later said that it was just an “experiment” and it was “short-lived.” Even if tactics like this are just short-lived experiments, do you really want travel sites manipulating your booking experience like that? We don’t.
2. Their Search Results Are Influenced by How Much Money They Make
A lot of customers are under the impression that travel booking sites like OTAs are a free service. But nothing is ever truly “free.” OTAs sell their listed hotels on a commission-based structure. That is, when you book a hotel stay, that hotel property pays the booking site a certain percentage of the total booking price. These commission rates have been on the rise in the last few years, growing from around 10% to an average of 15-30% today. What the commission percentage is set to per hotel depends on the contract that the hotel has with the OTA.
Over time, OTAs figured out that their site visitors really only look at the first page or two of search results before booking. So, they strategically bias their search results based on which hotels will make them the most money. Travelocity even openly admits to this, “The compensation which a property pays us for bookings made through our sites is also a factor for the relative ranking of properties.”
This directly impacts you in two ways. For one, your OTA search results order might not be what you thought it was. Did you think they were sorted by best customer reviews? Or maybe by price? At Roomkey, we sort our search results by distance to city center. (Personally, we think that is the most unbiased sort preference.) Secondly, higher commissions impact travelers because they reduce profit margins for hotels. Instead of using that money to cut you a deal or contribute to amenities or other things guests can enjoy, that money is going straight into the pockets of a third-party corporation.
3. They Don’t Tell You Where the Money’s Coming From
What was preached to us by our mothers as the hallmark of relationship success also tends to be a red flag in the OTA arena: open communication. The rise of ethical and sustainable businesses like Everlane and Patagonia proves that we, as consumers, are more interested than ever in the inner workings of the businesses that we support. We want to know where the products are coming from, what they’re made of, and the financial breakdown of the whole thing. Supporting local businesses rather than giant corporations is also important to many consumers.
OTAs can be very opaque about how they turn their profits. After all, specific hotel commission rates are hardly ever disclosed to the public. If they are, they certainly aren’t disclosed to the customer at the moment that they are searching or booking hotels. Consumers think they’re getting a good deal on a hotel without realizing what the actual cost of their room is or how much the OTA is pocketing for that transaction.
4. They Will Bury Taxes and Fees Until the Last Second
Nothing is worse than getting ready to buy something, putting it in your cart, getting out your credit card, and bidding farewell to your collected dollars, only to find a $40 shipping fee, or that the discount you expected didn’t work, or, in the case of many OTAs, potentially hundreds of dollars in taxes, service charges, and booking fees they didn’t tell you about upfront. These fees make you feel scammed. You’d gotten your hopes up about the lower price, but now, none of that feels worth it. If this happens to you often, you’ve probably gotten used to the feeling of seeing your price double at checkout. Over time, this can cause you to be more willing to pay more than you’d originally expected on travel expenses.
This is where Roomkey comes in. Our mission is to provide an honest hotel search experience. Whenever we can, we display the taxes and fees upfront before you decide to book. If the hotel passes us these details, we display them in a rate breakdown box directly underneath the nightly price. Like this:
At Roomkey, we want you to know your estimated room total as soon as possible. We also don’t alter our search results based on what makes us the most money. We’re upfront and give you the information you need, presented in a way that makes sense. With us, you can rest assured you’re making an informed booking decision that you’ll feel good about. No tricks. Just travel.
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