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For Hotels, There’s No Room Left for Online Travel Agencies

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Re: For Hotels, There’s No Room Left for Online Travel Agencies

#121

Post by gimiluv »

yabatopia wrote: post #110
briandear wrote: post #46

I feel compelled to respond since I am on both sides of the hotel business.. I own a tiny hotel in the Luberon and I also fly about 50k miles per year (staying in hotels along the way.) Booking.com has been amazing for us. They take 15% but it is completely worth it. We don't have "a name" nor do I have time to invest in the relentless SEO content marketing necessary to differentiate us when people search "hotels in…

The 15% seems fair. I'm not that familiar with the travel industry, how much more is that percentage compared to the commissions paid to traditional travel agencies pre-internet age? There were always,or at least very often, middlemen involved in the travel industry. Is the cut that for example Booking.com takes really that much bigger than travel agents used to take in the eighties?

Traditional travel agencies take approx. the same amount as a commission and do so off of less competitive rates so the consumer ends up paying more. They don't notice because its usually bundled into the price with airfare.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#122

Post by PeterisP »

babuskov wrote: post #22
joshvm wrote: post #19

Earlier quoted context omitted.

Booking.com is an absolutely atrocious website. It's full of very pushy marketing that tries to convince you that every hotel is almost fully booked and the entire world is about to place a reservation. Not to mention the weird push-style notifications. That said, the 24 hour cancellation policy is really useful since some of the listed hotels wouldn't otherwise offer it.

I had a very interesting experience with booking.com. I found a hotel room, it said something like "Only one left". So, I quickly booked and by the time I entered the payment details the room was taken. Ok, so I went back to search for alternative, and it showed the same room again. I tried to book it again, and it simply went through. I actually stayed at that hotel in the end. It looks like some really weird algori…

There can be an interesting interaction between booking.com and the hotel's own booking - I mean, booking.com doesn't know how many such rooms the hotel has available, it only knows how many such rooms the hotel has reserved for booking.com that may be booked at any time without a feedback from the hotel.

The hotel wouldn't put all their rooms there because they also have other channels (that also need to promise the customer that they'll get the room, inform the hotel afterwards, and the room must be available), and they don't want to risk overbooking. On the other hand, if they get a booking and see that all their booking.com rooms are taken, they'll likely assign another room or two to booking.com if they have them available.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#123

Post by smacktoward »

mindcrime wrote: post #86
ForHackernews wrote: post #29

Earlier quoted context omitted.

I think that's completely wrong. Very few vendors want their product to be commoditized. From the perspective of a hotelier, reducing their property to a few lines of JSON data is a losing proposition. The result will be the same thing we've seen in the airline industry: a race to the bottom, competing only on price, with ever-crappier service and more nickle-and-dime addons.

Very few vendors want their product to be commoditized. From the perspective of a hotelier, reducing their property to a few lines of JSON data is a losing proposition. Meh. For that to be true, it would have to be the case that all consumers care only about price. I'm pretty sure that's not actually the case. As long as there are consumers who will pay more for $WHATEVER, there will be a market for $WHATEVER. The po…

> For that to be true, it would have to be the case that all consumers care only about price. I'm pretty sure that's not actually the case.

The current state of the airline industry makes a pretty strong counter-argument.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#124

Post by falsedan »

nunez wrote: post #112
falsedan wrote: post #34

Earlier quoted context omitted.

> they'd get together and form an industry working group, and design simple, standard data formats and querying/booking APIs, and then make all their data available through them Are you familiar with SABRE/AMEDEUS? The flight industry did exactly this and it's been a disaster for them. Heck, they even handle hotel bookings as well.

really? every single airline uses a common messaging format for reservations, routing and itinerary generation BECAUSE of SABRE/Amadeus and doesn't have to roll their own systems to do it. please tell me how this is disastrous.

Ok

Airlines can't publish their inventory because they agreed to only allow GDSes access to that data.

Getting access to the GDSes as a small startup is extremely difficult, and the obvious value-add (searching many possible trips) is punished by the pricing structure.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#125

Post by otterley »

smacktoward wrote: post #123
mindcrime wrote: post #86

Earlier quoted context omitted.

Very few vendors want their product to be commoditized. From the perspective of a hotelier, reducing their property to a few lines of JSON data is a losing proposition. Meh. For that to be true, it would have to be the case that all consumers care only about price. I'm pretty sure that's not actually the case. As long as there are consumers who will pay more for $WHATEVER, there will be a market for $WHATEVER. The po…

> For that to be true, it would have to be the case that all consumers care only about price. I'm pretty sure that's not actually the case. The current state of the airline industry makes a pretty strong counter-argument.

The barriers to entry are much higher for new airlines than for new hotels. Airlines need far more capital and labor, and getting access to airport gates at most major airports is extremely difficulty. There are also far higher economies of scale in operating airlines than in operating hotels. (In fact, most hotel chains are simply franchises; the properties aren't owned by the brands on the buildings.)

That's why we don't see a lot of competition and innovation in the airline industry.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#126

Post by mindcrime »

smacktoward wrote: post #123
mindcrime wrote: post #86

Earlier quoted context omitted.

Very few vendors want their product to be commoditized. From the perspective of a hotelier, reducing their property to a few lines of JSON data is a losing proposition. Meh. For that to be true, it would have to be the case that all consumers care only about price. I'm pretty sure that's not actually the case. As long as there are consumers who will pay more for $WHATEVER, there will be a market for $WHATEVER. The po…

> For that to be true, it would have to be the case that all consumers care only about price. I'm pretty sure that's not actually the case. The current state of the airline industry makes a pretty strong counter-argument.

Maybe. I can see how if you're only looking at "airlines" (eg, Delta, Southwest, American, etc.) then it might seem that way. But I'd argue that that's a somewhat overly narrow view and that there is still price discrimination in terms of people who charter private jets and what-not. And even among consumer airlines, choice is sometimes dictated by other factors like route availability / timing / etc., and that further complicates the picture.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#127

Post by mindcrime »

nunez wrote: post #111
mindcrime wrote: post #85

Earlier quoted context omitted.

I no longer travel frequently for business, but when I was a consultant I was constantly traveling around the US and staying in various hotels. I would say that to a large extent, I always saw them as just commodities. I only had one or two pet issues that occasionally cropped up, but 99% of the time I didn't care a lick about the "brand" of the hotel, nor did I want to. Maybe it's different for recreational traveler…

I am currently a traveling consultant, and I now care very much about staying at Hilton properties because I have Diamond status and get better rooms at lower prices and free Wi-Fi. I know I could stay anywhere else and expense these expenses, but why would I?

Yeah, I guess once you get to that level with a given brand then it comes more of an issue. I never had enough points with any given property to get enough perks to really make me care. And since the company I worked for took care of all the hotel bookings / payments / etc. anyway, there was no real friction for me to pay for wifi or something when it was needed.

The one place where I do feel some brand loyalty, is actually on the airline side, where I have a strong preference for Southwest. And that was even more true back when I still had elite status with them and got free early-bird boarding. That was something I actually cared about since my company wouldn't pay for early-bird, seat upgrades, and the like.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#128

Post by thaumasiotes »

collyw wrote: post #76
babuskov wrote: post #20

Earlier quoted context omitted.

> it is just as cheap to call the hotel itself Only if it's in the same country. > book through its website For some hotels, booking via website is often half-baked web app that's full of bugs, doesn't accept certain inputs, etc. Simply because webdev isn't the hotel's main activity. Reviews on the hotel's website are usually non-existent or only positive. I mean, I hate the booking sites as well, but they are often…

International calls (to fixed lines) are not expensive these days.

For people who have had their contract for a while, they still are. You can't get a new phone contract that gouges you on international calls, but you can keep your old one.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#129

Post by skinnymuch »

xadhominemx wrote: post #115
skinnymuch wrote: post #104

Earlier quoted context omitted.

Couldn't you have said the same thing about Agoda, Kayak, and Momondo? All of the other Priceline and Expedia/TripAdvisor properties are from before the 2001 bubble. Most in the mid to late 90s. The three newer companies I mentioned all came in the mid 00s. And the latter two acquired for good money. Hipmunk came around this decade. But no clue on how good the acquisition is. Trip.com and HotelTonight are the last tw…

The difference is vs the '00's is the big sites have 1) scale (= operating leverage and the best deals with hotel chains and better SEO), 2) years' of data and testing (which leads to higher conversion and an ability to pay more for inorganic traffic than newcomers), and 3) organic traffic (which subsidizes inorganic traffic). HotelTonight fills a niche but I think the market they play in is pretty small.

But yeah I mean, wasn't that all true, albeit to a lesser extent, by 2005-2006, when the 3 mid-00 companies were fully launching?

I agree, HotelTonight fills a specific niche and maybe that's what we'll see more of. A few sites filling niches. Trip.com itself also has to do some more superficial than substantial features to try to differentiate itself.

And maybe Hipmunk was always more hype than actually being big with it being a YC company and by a reddit co-founder.

Re: For Hotels, There’s No Room Left for Online Travel Agencies

#130

Post by babuskov »

briandear wrote: post #52
babuskov wrote: post #24

Earlier quoted context omitted.

> Most of the times I booked through booking.com it was "cash on arrival", so these sites are nothing more than ads. I can confirm this. I believe the hotels only pay a monthly fee for listing and that's all.

Not true. We pay a percentage of the reservation cost to Booking.com each month. TripAdvisor on the other hand, charges a yearly fee for an enhanced listing, no fee for the standard listing. So those pay on arrival bookings -- we get an invoice from Booking.com each month for those. Nothing on booking.com to my knowledge is pre-pay -- Booking never actually charges the guest's card. But we still get the invoice.

Thanks for clearing that up.
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