When you're looking online for somewhere to stay, there's so much choice.
Well, there seems to be anyway.
When you're looking for a good-value hotel on Trivago, do you know that it's owned by Expedia? When you're looking for a fun holiday rental on HomeAway, do you know that it's also owned by Expedia? When you're looking for a cool apartment on Kayak, do you know that it's actually owned by The Priceline Group, which owns Booking.com? When you're looking for a luxury tent on Agoda, do you know that it's also owned by The Priceline Group?
Suddenly, there's not quite so much choice, is there?
In fact, Expedia and The Priceline Group control a huge percentage of the online booking market. One projection suggests that by 2020, they will control 94% of it.
Wow. That's pretty impressive. Not such great news for consumers though.
Do you know that Expedia and Priceline charge accommodation providers A LOT of commission? They pay between 15% and 20% per booking for a standard listing. This means hotels are forced to raise their prices, which comes out of your pocket.
By the way, do you also know that when you are offered 'preferred' or 'featured' properties that they are usually just paying more money? We think that is pretty misleading. So, if an accommodation provider wants to be ranked on the first few pages of the search results, then the commission is even higher, sometimes up to 30%. Ouch. That means even higher prices for you.
Well, I can just book directly on the property's website, right? The problem is that the online travel agents (OTAs) have this naughty little clause called rate parity in their terms and conditions. This means that accommodation providers have to agree not to sell cheaper on their own websites. Now that's really not fair, is it?
These are just a few of the clever tactics OTAs use to increase the price of online accommodation - and their profits - rather than reduce it. They definitely don't want you to know that though. That's not how you get to be worth $93 billion.
We at Hotel Bonanza are on a mission to change the way OTAs work as we prepare for our launch in the new year. This blog will lift the lid on how both consumers and accommodation providers are the victims as the big OTA juggernauts power their way towards dominating the online travel market, and making even bigger profits.