
Bargain Travel Sites May No Longer Be Bargains - nols
https://backchannel.com/why-bargain-travel-sites-may-no-longer-be-bargains-979e8bbf47a8
======
VSpike
One thing the aggregators do well is offer a consistent and more flexible
search than the airlines' own sites which are often pretty terrible. For
example, I live within 2 hours of about 5 airports, and when flying within
Europe there are often two airports near the destination. Being able to search
with multiple departure and arrival locations, with flexibility across several
days, in order to find the cheapest combination of airports and dates is
_still_ a useful service.

I'm interested to know where Google Flights fits in to this picture. It is not
well publicised but suddenly seems to have become quite good. A key feature
for me is inclusion of the two big UK low-cost carriers, Ryanair and Easyjet.
I'd assume Google are not working on commission but are just trying capture
another area of search with their algorithms and data. Does anyone know more
about it?

~~~
lucaspiller
Usually I search with an aggregator find the cheapest carrier, then book
directly with that carrier. I've found booking sites to be a bit hit and miss
- often they add extra booking fees that make the chosen flight more expensive
or you miss out on certain options. In Europe I usually use a combination of
Momondo, Skyscanner and Kiwi (formerly Skypicker).

~~~
colinbartlett
The aggregators are also always showing the cheapest fares, regardless of the
restrictions on those fares. More and more airlines have fares like Delta's
"Basic Economy" which does not even let you pick a seat. Everyone is familiar
with the long standing "non refundable" restriction on most of these fares but
the newer restrictions vary from airline to airline and the aggregators don't
do a good job of detailing those.

Contrast that to booking on most airline sites where they very clearly and
very obviously show you the restrictions because they publish the fare
alongside of the less restrictive fares as a way to up sell.

------
massysett
Hard to get through this article. It repeatedly insists that "everyone" uses
aggregators, when airlines and hotels sell much of their product directly. In
particular, Southwest does not sell through aggregators at all and they are
the highest volume US airline. Personally I refuse to book through aggregators
because I don't want finger-pointing between aggregator and airline if
something goes wrong.

I stopped reading when the article said travel agents are irrelevant for
anyone but boutique wealthy travelers. A large amount of corporate and
government travel is routinely booked through agents, who receive a routine
fee.

Hard to believe there is anything good in this article when so much of it in
the opening paragraphs is facially inaccurate.

~~~
GFischer
I work in the industry, and I disagree. If we want to be more exact, most of
the airline volume is through Global Distribution Systems (GDSs). I'd say that
truly "direct" sales are in a minority.

But sales through aggregators have soared (mostly using the Amadeus GDS)

As mentioned in other comments, corporate travel does not buy direct and,
along with luxury travel, are the two last holdouts of travel agents - I agree
with the article in that agents are becoming more irrelevant for non-corporate
bookings, although they're fighting back :) .

See for example:

[https://seekingalpha.com/article/3110756-global-
distribution...](https://seekingalpha.com/article/3110756-global-distribution-
systems-a-bright-spot-in-a-disappointing-airline-industry)

 _" market share loss due to disintermediation, which was starting to become a
problem for GDS companies, has slowed considerably, according to Amadeus.

Airlines have realized that the reach GDS companies provide -- especially to
business travelers -- cannot be matched by the airlines themselves.

Low-cost carriers (LCCs) like RyanAir (NASDAQ:RYAAY) and Southwest Airlines
(NYSE:LUV) didn't use GDS to sell their tickets. After their initial growth
period, during which they tapped deal-seeking customers, their growth slowed
down. They couldn't access the higher-margin business travelers. Hence, most
of the LCCs, including Southwest, RyanAir, and jetBlue (NASDAQ:JBLU), had to
come back to GDSs to increase their growth rates."_

~~~
dingaling
That last quote is somewhat misleading; Southwest adopted the Amadeus GDS for
their internal reservations in 2007, replacing a homegrown system. In their
2015 exposed their bookings through Amadeus but only through i:FAO for
corporate customers, not the public who still have to buy direct.

Also, the definition of 'most of the LCCs' conveniently excludes, well, most
of the World's LCCs...

~~~
tyingq
That's true at a high level, but off on some dates.

Southwest cut a deal with Amadeus in 2007, but is still using the internal
homegrown copy of Sabre for all domestic bookings. If you book something that
lands outside the US, it goes via Amadeus. They will move all reservations to
Amadeus, but over the next year or so.

They exposed bookings to corporate booking tools starting in 2009, but not via
a GDS, but rather by a private connection.[1]

Then, in 2015, they exposed bookings via Amadeus, including domestic, to
corporate travel tools. But, the booking itself does land in the
aforementioned homegrown reservation system.

[1][https://www.concur.com/newsroom/article/concur-and-
southwest...](https://www.concur.com/newsroom/article/concur-and-southwest-
airlines-sign-new-access-agreement)

------
manicminer
It's very true that in terms of hotel booking many consumers still see the big
OTAs as the "bargain" sites and are often surprised to find that you can
usually get an equal or better rate by booking directly with a hotel chain
itself.

The company I work for, roomkey.com, was founded by six of the largest hotel
chains to address this problem and bring more direct bookings back to the
chains. The OTA duopoly of Expedia and Priceline have many of the hotel chains
over a barrel with very aggressive contract terms that do not allow the hotel
chain to advertise a lower direct rate than those they supply to the OTAs. And
added to this, the OTAs take a pretty eye-watering commission.

However, most of the big chains are able to provide a lower rate to their own
loyalty members. Room Key is unique in that we can access and aggregate these
lower rates into a one-search solution. But, we are a tiny voice and competing
with annual online marketing budgets of over a billion dollars each for the
big two OTAs. Our job is a very hard one.

I'm glad articles like this are starting to paint a truer picture for the
consumer. It really does make sense to book direct almost every time. It's
easier to cancel/modify. You are the customer of the hotel, not a third party.
You get loyalty benefits. And more of your money goes to those who take on the
overhead of your stay and ensure the quality of your experience.

The OTAs used to be both cheap and convenient. Now they can only really lay
claim to convenience through aggregation, and we at roomkey.com are trying to
change that too.

~~~
philliphaydon
Agoda often offers discounts to hotels you've viewed if you're browsing around
and I always get the hotel cheaper than what's on offer at the hotel directly.
For example the hotel I'm currently staying at in Taiwan cost 2500 NT, booking
directly with the hotel is actually 4100 NT...

I don't understand how this is possible but this is how it seems to me.

I don't use things like flight scanner because booking directly with the
airline is always cheaper from experience.

~~~
philliphaydon
Actually. Google flights usually has prices that match the airline. I
sometimes use that to compare. Then go to the airline site directly to do the
booking.

~~~
abandonliberty
I haven't seen Google offer booking.

~~~
philliphaydon
Flights.Google.com doesn't offer bookings but it's good for comparing.

------
NikolaeVarius
I'm ehhhh on this.

I've worked with these systems. Airlines are pretty much never worth it
through these sites. Margins are so damn razor thing that everyone pretty much
scrambles for the last dollar. (Literally like 3-5 dollar margin"

Hotels are MORE worth it, in that they do offer deals through aggregators.
Partially due to name and partially through exposure.

Booking.com is pretty good for this as they index alot of smaller hotels that
generally are hard to find.

------
hn_throwaway_99
While I thought this was a pretty good article, the author is confusing what
is an OTA vs a meta-search engine, even though he spends a paragraph
explaining the difference. From one of the comments on the article:

* Expedia is not an aggregator/meta-search, it is an OTA itself. Meta-search engines are sites like skyscanner, hipmunk, trivago and kayak to mention some.

Another further confusion is when the author compares TripAdvisor with
Hilton's own site. The screenshot even shows that TripAdvisor just redirects
to Booking.com (Booking.com is owned by Priceline), who is the OTA.

The other thing the author doesn't discuss, but is an important part of the
story, is that large OTAs spend billions advertising through Google, and are
experts at it. Booking.com is _the_ largest spender of _any_ company on Google
Adwords: [https://venturebeat.com/2015/11/05/booking-com-largest-
googl...](https://venturebeat.com/2015/11/05/booking-com-largest-google-
advertiser-facebook-hasnt-cracked-the-code-on-direct-response/)

~~~
jmarbach
Yes, exactly, the author confuses the term OTA versus a metasearch engine.
Expedia and Priceline are the largest OTA's after consolidation in recent
years, creating what is now a duopoly. Furthermore, Expedia and Priceline have
created an illusion of choice by acquiring the majority of the high traffic
metasearch sites and then deciding to maintain their separate brands.

Disclaimer: I built a flight search tool,
[https://concorde.io](https://concorde.io)

------
walterbell
The lifecycle of aggregators may have some parallels with the fall of high-
frequency trading. Eventually, the technology barrier to entry falls,
incumbents fight back and the ecosystem rebalances.

Two topics missing from this article are AirBnB and low-cost airlines that fly
to smaller airports. AirBnB does not compete with aggregators and cannot be
shut out on the supply side by hotels. Do low-cost airlines (like Norwegian)
benefit from customer discovery via aggregators?

Do aggregators change prices based on geographic location of the buyer? The
article mentioned an experiment with higher prices for OSX buyers.

~~~
paulgb
"Do aggregators change prices based on geographic location of the buyer"

Anecdotally, I booked a flight a few weeks ago through expedia.hk for an
itinerary that was not even available through expedia.com. I'm not sure if
they geotarget, but for Expedia at least, the TLD you go through matters.

I've also found a South American carrier (I forget which) to have
significantly different prices depending on whether the website is in Spanish
or English (alas, they wouldn't accept my US card through the Spanish site).

~~~
stirlo
LAN is 100% cheaper on the Spanish website. I had no difficulty booking using
an AU credit card. Also sells return tickets with a total cost less than the
cost one way ticket to the same destination. Weird business model but my
wallet was happy that I figured it out. :D

~~~
DrScump
If it's _100%_ cheaper, why does it need a card in the first palce?

~~~
davind3r
Just to verify if you are adult enough //joking

------
joshvm
Who thinks that $2000 for a transatlantic trip is a good deal?

I just looked at Google flights and most offerings are under £400 return (GOA-
JFK). Even in mid-august I struggled to find flights above £600. Either that
guy is flying business (management consultant, maybe then) or he seriously got
shafted on price.

Just had a look - premium economy is £900, business is almost £2000.

EDIT: Interesting, it gets a lot more expensive the other way around. Though
Google does suggest Milan as an alternative route, which drops the price to
£400 again. It seems like the hop from Genoa to the international hub makes
the difference.

Or you could get a train from Milan, which is only 85 miles.

~~~
tuananh
to some, convenience and time worth more than money.

------
TheChaplain
I had a somewhat similar experience as Mr. Giacobbe in the article.

Recently I had to make a last minute change in a hotel reservation via Agoda,
but they require you to pay the full amount in order to cancel the
reservation, and then re-do the booking.

So instead I called the hotel directly and got my reservation changed without
any extra cost.

------
sersi
It's been this way for a long time. It's often cheaper to book directly from
the airline than through an aggregator so it always pay to check (and use a
tool like [http://matrix.itasoftware.com](http://matrix.itasoftware.com) to
also look for fare prices)

It makes sense, it's not in the airlines or hotels best interest to give lower
prices to external OTAs and by providing better fares on their website they
cut the middleman. It's also the reason why hotel chain tend to not reward
user with status and points if they book through an aggregator.

------
bsder
I can tell you that the aggregators were totally useless when booking a hotel
in New York.

"$99 for a room!" Great!. Erm, for tonight. Only. It's "$299 for every other
night". Not so great.

Eventually it became clear that staying in Connecticut and taking the train in
was a huge improvement.

~~~
verelo
This has been my experience, until recently. I started not booking ahead and
just using the Hotel Tonight app to get something (literally minutes before i
get on my flight). I feel like one day i'm going to get screwed, but so far
I've never slept on the street (around 20 months of doing this) and the rates
are often no more than $160 CAD for great hotels in midtown [area sucks, but
its where the office is]. I also like that it shows currency in my local
currency, not the destination currency.

~~~
lotsofpulp
The reason this works for you is not anything to do with Hotel Tonight, it's
because NYC hotels price high early and then drop prices heavily because
they're market is hurting (lots of new supply, and fewer customers).

At any chain hotel (Marriot/Hilton/IHG/Choice/Wyndham/Starwood), you'll get
the cheapest price by being a rewards member (free, just like airline mile
programs) and reserving directly on their website, or www.roomkey.com which is
also owned by the hotel chains itself.

Next time, reserve the room from far out, then pay attention to the
cancelation policy. Just before the cancelation policy ends, check the prices,
they've probably dropped. You can then cancel and get the new price, and it
will be cheaper than Hotel Tonight, because the hotel doesn't need to pay
commission to Hotel Tonight, and you get the benefits of being a rewards
member.

~~~
verelo
Yeah I'd 100% believe this. And to throw another data point in here, i just
did it now at got a room at the central park hotel for $180 CAD / night for 2
nights.

The only other good thing about this approach is that I find meetings often
get canceled or delayed due to flights not getting in. Canceling hotels is
expensive, when you do not book till the last minute canceling becomes very
rare.

------
petecox
I travelled to Spain in low season recently. For accommodation it doesn't hurt
just to turn up, old school, without a booking.

Trivago have been blitzing our TV stations with ads, so I thought I'd give
them a try. But their searches seemed just to redirect to booking.com so I
couldn't see much value-adding.

Forget the 'only 2 left at this price' deception. I door knocked at a couple
of places and they were half empty for the night - owners offered cheaper in
cash than off a website! Now maybe this doesn't work in high season when
everything is full but I found it liberating to stumble out randomly from a
bus station to the tourist information centre who would plot for me on a map
the best places to stay!

------
jamez1
The author missed a major driver of this - which is that the hotels etc are
not allowed to undercut the OTAs, or the OTA will boot them off.

This is why you can call and get a better deal, and why many hotels are
aggressively trying to build loyalty programs

~~~
anjc
As far as I know too the OTA can legitimately under-price the supplier's
products down to their wholesale price right? Which I'm guessing would mean
that the largest volume OTAs should have better deals due to lower wholesale
prices, but could cause consolidation to continue, meaning higher prices
eventually....which happened in car rental and seems to be happening now in
travel

~~~
tuananh
i dont think they can, unless they package it with something else eg: flight
and hide the actual price.

------
einrealist
Recently left a startup in that business. The article is spot on.

And there may be technological opportunities here, like open APIs to hotel
property management systems or even property management systems as a
service....

------
splonk
One thing not mentioned yet is that "resort fees" are basically just a way to
avoid paying commission to the aggregators. The combination of the ~20%
commission and the most favored nation status that aggregators require from
hotels without the negotiating power of Hilton limits the options hotels have
to raise rates. And as the article mentions, this leads to hotels trying
harder these days to establish a relationship with customers as an end run
around the MFN clauses.

Also, I've probably booked 100+ hotels in the past few years, and I still do
the majority of them through booking.com. I am aware that I can sometimes get
cheaper rates by booking direct, and I do sometimes, if the delta is high
enough. (On the other hand, I actually just booked a Hilton that was cheaper
on the aggregator than on their own website.) I'm also aware that every hotel
employee will tell you that 3rd party customers get the worst rooms in the
place and are the first ones to get walked when overbooked. I can't say I've
ever noticed any problems there. I'm even aware that booking's rating system
is skewed - their 10 point scale actually only runs from 2.5 to 10, and the
median rating is something like 8.1, so keep that in mind when you book your
"Very Good, 8.1" hotel.

Despite all that, it has one killer feature that making direct reservations
doesn't have - a uniform interface for making/changing/canceling bookings.
It's a tremendous benefit in countries where I don't speak the language. I can
do it fairly reliably on either the app or the website even when my network
connection is dodgy, at any time, and without having to speak the language. I
do admit that my requirements are fairly specific and most people traveling
within their own country with reliable phone/internet service are generally
better off doing the search first on an aggregator, and then booking direct
(after signing up for loyalty programs) if the price is close.

(I work in the industry, but not for any of the companies mentioned.)

~~~
phreeza
It's interesting that you say third party customers get worse treatment. I
always assumed the opposite would be the case, because people booking through
a portal can leave a rating, while many direct customers will be one-time
business, with little to no recourse of things are sub-par. Do you know what
the reason might be that this is not the case?

~~~
splonk
Worse treatment doesn't really mean much unless the hotel is close to 100%
capacity. I may have phrased that part badly - what I meant is that 3rd party
customers are lower priority than 1st party, so if it comes down to a question
of who gets the nicer room, 3rd party will lose.

With respect to ratings, very few people actually leave them. So you're
looking at the uncommon case of a traveler being negatively impacted,
multiplied by the chance they even notice or care (e.g. someone who sleeps
like a log getting the noisy room), multiplied by the chance that they
actually bother reviewing. Couple that with the fact that pickier customers
(frequent business travelers, points bloggers, or just brand loyalists) are
vastly more likely to book direct, since you generally can't use/gain loyalty
program points when booking through an aggregator, and it's understandable why
direct customers might get preferential treatment. Not to mention that they're
making more money from the direct customers to begin with.

------
Terretta
Use Lola.

[https://www.lolatravel.com/about](https://www.lolatravel.com/about)

 _" We’re a new kind of travel company that provides on-demand, personal
travel service through a smartphone app. The Lola app instantly connects
people to our team of travel agents who find and book flights, hotels, and
cars for our customers. We also provide support while they’re on their
trips."_

Aggregators are all fun and games till your plans change. And Lola gives you
human curated travel (they really do consider your tastes) at aggregator
costs.

~~~
tuananh
looks like bot to me.

[https://www.lolatravel.com/](https://www.lolatravel.com/)

~~~
Terretta
Not a bot. Not remotely a bot.

Multi-tasking humans who are pretty damn good and making your travel feel
important to them to get right.

------
carlmungz
I've been running citybreakflights.com since Jan this year and one thing I've
noticed is that buying tickets directly from the airline tends to be much
cheaper than using an OTA. I track prices of flights from the UK to Europe for
people wanting to go away for a few days. I don't track hotels but when I go
away on a city break I use booking.com. Might start going directly and
comparing the difference in price.

------
TorKlingberg
Skyscanner is great, but I get the sense that the airlines have cut them off.
They used to show almost every carrier, and sent you straight to the airline
website to book (I assume they got paid for referrals). Now they seem to
search other aggregators, who have spotty data themselves. The great whole
month price overview never works any more.

~~~
Kliment
Skyscanner got acquired recently, maybe this is what triggered the change.

~~~
Marazan
There hasn't been any change, Skyscanner has been adding airlines over the
years.

Of the GP, is there any example you can think of where airline coverage is now
missing?

------
emodendroket
I find the aggregators still offer better deals if you're willing to forego
stuff like being able to cancel or selecting the exact hotel you want to stay
in.

------
obstinate
It makes sense. Companies will use price discrimination to offer higher prices
when they are able to segment the market. This would happen regardless of
whether the lazy people were on aggregators or going direct. If they're able
to separate the groups and one is more price sensitive than the other, that
group would tend to be charged higher prices.

------
elastic_church
So how does Google flights compare

