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Show HN: Scout – See lower direct hotel rates as you browse online travel agents

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Re: Show HN: Scout – See lower direct hotel rates as you browse online travel agents

#31

Post by manicminer »

ceejayoz wrote: post #5
manicminer wrote: post #2

Nine months ago, an article "For Hotels, There’s No Room Left for Online Travel Agencies" sparked some interesting discussion on HN [1]. Many of the topics discussed informed the development of our new product, Scout. The perception of many travelers is that the best hotel prices are to be found at the big online travel agencies. The hotel chains have recently been attempting to alter this perception by offering lowe…

I'd appreciate a "how we make money" section on the site. It's not clear how (if?) you do, and that scares me a bit when considering an extension that'll run on sites that take my credit card.

Great suggestion. We'll look into it.

We do make money from booking commissions, but our commissions are much lower than those of the OTAs and more importantly go to a company that is trusted by and founded by the hotel industry.

Room Key's raison d'être is to lower the cost of hotel distribution for the hotel industry and to be an advocate for the traveler in what is a very confusing marketplace for the average consumer. Price confidence is severely lacking hence why consumers are often searching up to 6 sites before making a booking decision.

Very few people understand how the online hotel industry works and we would like to start to cast some light on that.

Re: Show HN: Scout – See lower direct hotel rates as you browse online travel agents

#32

Post by jaclaz »

degenerate wrote: post #22
eldavido wrote: post #18

I've spent the last three years building a hotel property management system. I hate OTAs. They are gross middlemen who charge criminally high commissions to hotel operators. And as much as I philosophically support what you're doing here, both Roomkey in general and Scout in particular, you're barking up the wrong tree. At the point where a customer is searching on Expedia or booking.com, you've lost. These sites hav…

What I completely don't understand is, I have tried calling hotels directly when looking at the hotels.com/expedia price, and asking if they can give me that rate directly or even a little cheaper. They never can. They always say "you'll have to book it through them" to get that rate. I've tried this at least a dozen times, always with the same answer. Do these chains have some kind of written agreement with the webs…

>Do these chains have some kind of written agreement with the websites where they are NOT allowed to undercut those prices, ever?

It depends on where (which country) and when.

In Europe there were contracts with that "no lower rate" provisions, which have been (in some countries) deemed illegal.

To give you some loose data points, that was 2015 for France and Germany, August 2017 for Italy, here is a map:

http://hotelmanager-blog.trivago.com/rate-parity-hotel-indus...

Re: Show HN: Scout – See lower direct hotel rates as you browse online travel agents

#34

Post by shanghaiaway »

eldavido wrote: post #19
empath75 wrote: post #14

Earlier quoted context omitted.

How is that different than a regular travel agency. It’s still a middle man taking a cut.

No it isn't. The big chains are fighting to stay relevant against the channels (Expedia, Priceline, Airbnb). Franchisees don't want to pay 6-8% of revenue to a chain and then another 10-15% to a channel. They're going to pick one or the other, and right now, my bet is on the OTA or "online travel agency" aka Expedia. This battle is existential for the chains (they're out of business if they lose). They need to be see…

Yes it is.

Roomkey is just another middleman alternative to Expedia.

Re: Show HN: Scout – See lower direct hotel rates as you browse online travel agents

#35

Post by smueller1234 »

eldavido wrote: post #25
degenerate wrote: post #22

Earlier quoted context omitted.

What I completely don't understand is, I have tried calling hotels directly when looking at the hotels.com/expedia price, and asking if they can give me that rate directly or even a little cheaper. They never can. They always say "you'll have to book it through them" to get that rate. I've tried this at least a dozen times, always with the same answer. Do these chains have some kind of written agreement with the webs…

Yes, it's called a MFN clause ("most favored nation") and is a standard deal term the channels negotiate with the hotels. They accept it because they have no choice. Hotels play all sorts of games with this, including throwing in free stuff if you book direct ("it's the same rate") and doing "non-advertised" rates through loyalty and reward programs. If you can't book directly with the hotel, it's very likely they do…

Except the MFNs were significantly weakened or struck down entirely by a number of the largest European countries. For better or worse: I think OTAs have brought many good things to consumers (efficient comparisons, more competition amongst accommodation for example) and they depend somewhat on being able to offer the best prices. After all, the point is to make the search easier and more efficient.

Disclosure: used to work for an OTA.

Re: Show HN: Scout – See lower direct hotel rates as you browse online travel agents

#36

Post by smueller1234 »

manicminer wrote: post #28
degenerate wrote: post #22

Earlier quoted context omitted.

What I completely don't understand is, I have tried calling hotels directly when looking at the hotels.com/expedia price, and asking if they can give me that rate directly or even a little cheaper. They never can. They always say "you'll have to book it through them" to get that rate. I've tried this at least a dozen times, always with the same answer. Do these chains have some kind of written agreement with the webs…

For rates that are available to everyone, the hotel chains are generally contractually restricted from offering a lower rate than the OTA. Currently the Priceline/Expedia duopoly wields a huge amount of power which IMO is ultimately bad for the consumer. The way that hotel chains can undercut the OTA price is via their loyalty programs. If you sign up as a member then you can very often receive a lower rate. All the…

I think you're pushing your agenda pretty hard here. Not that everything you say is entirely wrong either, but I think you're overstating benefits of one side and ignoring the others'.

You mention that the big OTAs seek (online only btw!) price parity. But you don't mention that the largest of the OTAs hasn't enforced it much for many years if ever (source: I wrote code for price parity analysis for them back in 2011). You also conveniently omit that MFNs have been tremendously weakened or outlawed in much of the EU.

I'd also like to challenge the notion that direct bookings are always better for you as a traveler. Hotels do play funny games with customers (eg overbookings) all the time (source: family from the hotel industry and I worked for an OTA where you could experience a day in the shoes of a customer service agent). Booking through large OTAs had two possible (albeit not guaranteed) advantages. The OTAs generally consider the traveler their customer. Not the hotel. So if there is a conflict ("I'm sorry - it looks like I dont have your reservation on file..."), they will put their considerable influence behind the shunned traveler. The fact that online ratings have significant impact on the rate of bookings that hotels get also means that they have an additional incentive to not mistreat the customers that can submit these ratings on the large OTAs.

Finally, let me make one more argument in favor of OTAs. I'll claim that consumers WANT to be able to efficiently search for accommodation that matches their criteria incl budget. I sure do! And it just makes sense: do you all remember the times when you had to call lots of hotels before you finally found that one that had a free room? Travel sucked a great deal more. And it was a lot more a matter of luck whether you'd hit a good one. So people WILL use modern technology to search places to stay. Without the OTAs, the search engines will fill that gap. And lo and behold: a very, very large percentage of the commission that OTAs charge goes to online performance marketing. (Some of those numbers are public so I could likely quote, but I don't want to accidentally disclose anything I contractually mustn't, so please look them up in the filings.)

Disclosure: used to work for an OTA, now for Google (but not anywhere near the travel or ads products).

Re: Show HN: Scout – See lower direct hotel rates as you browse online travel agents

#37

Post by helb »

manicminer wrote: post #29
degenerate wrote: post #23

Earlier quoted context omitted.

If instead it said "Read and change data on Expedia, Orbitz, Priceline, Booking.com, Hotels.com, Travelocity" then I would be OK with it. But unfortunately they want full access!

Thank you for pointing this out. We'll look at this and see if we can enumerate the OTAs on which Scout works as you suggest. I can assure you that the extension collects only what it needs to do in order to function.

It is possible to enlist websites you want access to: https://developer.chrome.com/apps/permission_warnings#warnin...

I don't know if/how is it compatible with Firefox and other browsers…

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