What You Need to Know About Hotel Discount Shopping

woman in yellow sweater sitting on hotel holding suitcase_hotel discount shoppingOK, here’s the deal. Despite what you’ve been spoon-fed over the years, Travelocity is not a discount website. Neither is Expedia, Booking.com, Kayak, Orbitz, or Priceline. In fact, you may actually be getting a worse deal on your hotel room when you book on these travel sites.

If you’re scratching your head wondering why you’ve been booking travel on these sites for so long and how you didn’t realize these weren’t discount websites, you’re not alone. We’re here to give you the skinny.

These mega booking sites, also known as OTAs (online travel agencies), are travel aggregators. They enable travelers to search for hotel rooms, flights, and rental cars all in one place. That can be a convenient service, but there are a few things you should know about OTAs before proceeding further.

1. OTAs Bias Their Search Results

You’ve probably assumed that as you review OTA search results, you’re seeing the best results for you, but you may not be. OTAs use all sorts of factors to determine their sort order, including how much money they are paid by the listed hotel properties. This means that the results you are seeing are likely inherently biased. You’re not seeing what’s necessarily best for you, you’re seeing what’s best for the OTA’s bottom line.

2. Beware of OTA Discount Claims

Peppered throughout OTA search results, you’re bound to see hotels with prices that have been crossed out, followed by a second price that is lower than that crossed out price. This makes it appear as though a discount is at play, but don’t be fooled. As a rule (which we’ll explain in #3 below), OTAs can’t actually offer public discounts on hotel stays. What you’re seeing here when you see crossed-out prices is merely a marketing ploy to make you think you’ll save money if you book your hotel on that site. Here’s an example:

Comparing Outdated Prices

A recent search for a Dallas hotel on Expedia.com returned this search result for a Crowne Plaza property:

Crowne Plaza Hotel on Expedia.com

Notice how the $166 rate is crossed out and the lower rate of $118 stands out next to it. If you click on the small info icon next to the rates, a text box appears that defines the crossed-out rate: “The comparison price is the third-highest price for this room type at this property (with the same length of stay and cancellation policy) that customers have found on our site during a 30-day window around your selected check-in date.” Huh? Yeah, that’s a mouthful. But we’ll explain…

Expedia’s data systems are able to keep track of all the rates that get displayed for any given set of search criteria. Anytime someone searches for a hotel in Dallas for these particular dates, the rates that get returned are recorded. Now, it’s important to remember that hotel rates fluctuate over time—this article gets into the nitty-gritty of that—so sometimes the hotel has higher rates, sometimes they have lower rates.

What Expedia is doing is selecting “the third-highest” price that it has seen for this hotel over the past 30 days and showing you that price as compared to the current rate. So, in reality, the current rate is not a discount at all because the comparison rate is no longer relevant. We also don’t know exactly what room amenities were baked in to the comparison rate that might have made it so high. There is a lot about this comparison that is very confusing for customers, but OTAs bank on you not questioning their game. Instead, if you’re not careful, you might fall into their trap to get you to book your hotel through them.

Comparing Apples to Oranges

Another search on Travelocity.com returns similar results. In this example, their listing for a Super 8 property also shows a crossed-out price, and they are even bold enough to state that the lower rate is “15% off,” which implies that they are offering you a discount.

Super 8 Hotel on Travelocity.com

But upon further investigation, the initial $105 rate is simply the hotel’s standard rate for that property while the $89 is their prepaid rate. (Prepaid rates are offered by many hotels to give you a lower rate in exchange for the ability to cancel or modify your reservation.) While the $89 prepaid rate is indeed 15% lower than the $105 standard rate, this is comparing apples to oranges because booking a standard rate is completely different than booking a prepaid rate due to the differing cancellation policies.

3. OTAs Can’t Actually Offer Public Discounts

Thanks to rate parity agreements between OTAs and hotels, OTAs are not allowed to offer lower rates than the hotels themselves are offering. This means that OTAs are legally restricted from selling hotel rooms at discounted rates. A rate that is publicly available on one site will be the same publicly available rate that you’ll find on other sites. So even if an OTA tries to entice you with percent-discount language or scratched-out prices that indicate a deal, there’s not actually a deal.

In other words, the rates on Expedia (or Travelocity, or Booking.com, or Hotels.com, etc.) are the same rates that are offered on the hotels’ websites. Or at the very least, they will not be lower—at least not legally. The OTAs simply can’t offer you better rates. But there is still a way to dig up discounts for hotel stays…

4. The Loophole That Will Get You Discounts

Hotels are bound to the rate parity agreements as well. Just as OTAs can’t offer lower rates to undercut the hotel, hotels can’t undercut OTAs either. This keeps competition fair in the hotel industry. But the hotels have a way to work around these rate restrictions and reward their own customers at the same time.

The secret lies with loyalty rates. Loyalty rates, AKA member rates, are hotel rates that are lower than the public rates available to non-members. This simply means that in order to book one of these discounted rates, you must be a member of the hotel’s loyalty program. Loyalty rates are allowed to circumvent the rate parity agreements because these rates are offered only to private groups, not to the open public.

Beyond the Discount

As a hotel rewards member, you get perks in addition to the lower rates. You can ask for late checkouts, use their Wi-Fi for free, and access members-only lounges with free snacks, coffee, drinks, and breakfast. You can also save up the points that you earn when you book hotel rooms and redeem them for free stays later on. There are even more free perks, such as suite upgrades—good luck scoring any of that as an OTA rewards member! Hotels love their loyalty members, and will treat you like royalty when you arrive. On the other hand, you might be at risk of losing your reservation if you book through a third-party site like an OTA.

How to Book a Loyalty Rate

Loyalty rates are true discounts that you can’t and won’t find on an OTA site. In fact, the only place you can book these lower rates is by booking on the hotel’s site as a member. Signing up for these programs is free and easy, and you can sign up for as many as you want so you can get a discount no matter where you stay.

To make your hotel comparison easy, Roomkey.com is the only hotel search site that compares loyalty rates from multiple hotel programs at once. Search across hotel brands, browse their lower prices, and choose the hotel that best fits your trip. We show loyalty rates alongside the regular rates as well as flexible versus prepaid rates so you can see all your options at once.

At Roomkey, we believe in transparency in search and honesty in booking. Once you find a hotel and a rate that you like, we’ll take you directly to the hotel’s site where you’ll complete your booking with them. No middle-men, no fees hiding in the fine print, no confusing cancellation policies. That’s our game… No tricks, just travel. Give Roomkey a try next time you’re on the hunt for a hotel. We think you’ll like what you find.