Online travel agencies often provide the bulk of bookings to many hotels and resorts. Revenue estimates for 2016 for OLTA’s are expected to surpass $40 billion dollars!
Hotels and airlines have mixed feelings towards OLTA’s. On one hand, the OLTA’s provide much-needed exposure to hotels and resorts by consolidating a destination’s available accommodations in one easy to browse webpage. On the other hand, OLTA’s take an average of 15% commission for this service.
Consolidated hotel reviews and ratings provided by the OLTA help the consumer make an informed decision on where to stay. One caveat, especially on TripAdvisor, Google, Yelp and Facebook reviews, is that the reviewer doesn’t necessarily have any experience staying at the resort in question! Why would someone write a review if they have not stayed at the resort? Personal vendettas and attempts to inflate/deflate a hotel’s rating to gain an advantage in search are typical reasons, as the highest rated resorts are generally listed first when searched. For these reasons alone, an objective person may consider dropping the highest and lowest reviews of any one location to get a true feel for the experience they will expect to receive at their destination.
Rate parity is an issue forced on the hoteliers by all major OLTA’s. In other words, all OLTA’s require the best price! A hotel can’t even make a private offer to a prior guest who used an agent in a prior booking without being punished. It seems like collusion, and well, it is. The problem is that if a hotel doesn’t want to play by the rate parity rules, the OLTA will simply reduce their ranking in search or drop the hotel from their listings all-together. This may not matter to a large chain like Hilton Hotels, but it certainly greatly affects the mom and pop or boutique hotel. Many boutique hotels receive 30% to 50% of their bookings from one major OLTA. If they were dropped, it would be devastating to their business.
Many OLTA’s keep the hotel’s money for up to 30-days putting an unnecessary burden on the hotel’s cash flow. After all, there is a lot of interest to be had on $40 billion dollars of commissions!
What does this mean to the prospective hotel guest? Invariably, the OLTA’s put a stranglehold on the special offers and extras that can be provided to a guest who books directly with the resort. Additionally, many OLTA’s have more restrictive cancelation policies than the hotels themselves! If you have an emergency preventing you from making your trip, you may find yourself paying for a stay that you can’t complete. The hotel manager may have no discretion in forgiving or lessening the penalty for a no-show due to the OLTA’s stricter policies.
Note, some OLTA’s show prices with taxes and fees, others do not. Others have a markup that you don’t know about until you checkout. OLTA’s try to mask the true price from consumers in order to make it make it hard to compare the true price before fully completing your shopping cart.
Additionally, please remember that many OLTA’s prohibit hotels from reaching out to guests booked through the OLTA. This can make it harder for you to book transportation, diving and local events through the hotel concierge. Remember to contact your hotel directly after ou book, especially if you have location questions or transportation concerns. This can also lead to your dissatisfaction (bad review) of a hotel when it isn’t really their fault. They simply had no way to contact you to help with your pre-arrival.
We recommend always booking directly with your destination hotel after making a decision based on various OLTA data. It is our belief that 95% of hotel reservation desks will “price match” any OLTA price that you can show in a screenshot with an additional 5% off. It’s a win-win for both the guest and the hotelier. Try it and let us know how it goes for you.