5 Myths About Online Travel Agencies

hotel room with orange pillows and blankets and elephant towelYou’ve probably been using travel booking sites to reserve hotel rooms for years. You know… those sites like Hotwire, Expedia, Travelocity, etc? Mega booking sites like this are called Online Travel Agencies—OTAs for short—and they’re where you might go to find hotel rooms or book flights. This might even feel like second nature to some of you.

When Travelocity first came on the scene in 1995, it was a game-changer. It was the first travel website to allow customers to search, book, and pay for travel without the need of a human travel agent. It made trip planning so much easier. But much has changed in the travel industry since then. Today, there are so many travel booking sites designed to help travelers find hotels, flights, cars, and even experiences. Many of these sites like to let you believe that they have the best prices. But do they?

It can be hard to tell what’s fact and what’s fiction when it comes to online travel sites. There’s a lot of information out there that can get hidden in the fine print. This makes it hard for customers to have the full picture of what they’re actually doing when they use one of these sites to book their travel. As an example, many customers think they are doing their research when they hop from one site to the next, digging and searching for the best deals. Better check them all, right? But did you know that Expedia, Travelocity, Hotels.com, Hotwire, Orbitz, and more are all owned by the same company? Yes, it’s true.

Follow along as we pull back the curtain on the world of online travel agencies. We’ve busted five commonly held myths about OTAs to help you make better and more educated travel booking decisions.

Myth #1: The current breadth of competition among OTAs is great for customers.

It’s true that there are a lot of travel booking sites available to customers. But many of the most popular ones are actually owned by one of two giant corporations: Expedia Group or Booking Holdings (the parent company who owns Booking.com). Here are two quick visuals:

Expedia Group sites:

ota myths_brands owned by expedia group

Booking Holdings sites:

ota myths_brands owned by expedia

Expedia Group and Booking Holdings don’t exactly shout from the rooftops that they own all of these sites. Many customers have the perception that they are comparing competitor prices by hopping from site to site. Doing so leaves you feeling accomplished in your research. On one site or another, you’ll end up booking your trip somewhere. Do you think Expedia Group cares if you book through Travelocity or Orbitz?

The problem here takes us back to our Economics 101 class from college and learning about fair market competition. In general, whenever there are more independent competitors in a marketplace, the more things will be price efficient for customers. Independent competition will keep one company from jacking up prices or imposing unfair customer service—or else customers would take their business elsewhere. Competition from supplier to supplier keeps things fair for customers. In the current OTA marketplace, does such a concentration of ownership across Expedia Group and Booking Holdings maintain a fair playground? Makes us wonder.

Myth #1… busted!

Myth #2: OTAs are discount booking sites that give travelers the lowest hotel rates.

There’s not really such a thing as “discount sites” for hotel rates. In fact, OTAs are legally obligated to offer the same public rate that the hotels offer. This is due to what’s called rate parity agreements. These clauses in OTA-Hotel contracts state that a hotel room must be sold for the same price regardless of the online site used to book the room.

Many OTAs like to lure customers in by adding verbiage like “Great Deal,” “Instant Discount,” and “Sale!” to hotel listings on their sites. However, you’re not actually getting a better deal or a special discount by booking through an OTA. In fact, the best way to get around these rate parity agreements is by booking a loyalty rate on the hotel’s own website. Loyalty rates can bypass the rate parity rules because they are sold to “closed user groups” instead of to the open public. Basically, you have to be a member of the hotel’s loyalty program to book that discounted rate. More on how hotel loyalty rates actually get you a discount here.

Myth #2… busted! Which leads us to…

Myth #3: OTA reward programs are better than those offered by hotels.

Many OTAs offer member rewards programs similar to the loyalty programs offered by hotels. You might think that an OTA loyalty program would be better than a hotel’s because it doesn’t matter where you book. Hilton, Marriott, Best Western? Doesn’t matter to an OTA. While there might be some truth in this for some customers, what gets left out of that equation is customer service.

Hotel loyalty programs, like Hilton Honors and Marriott Bonvoy, are all about the customer service. Not only can you score special rates that you won’t find on OTA sites, but you are often greeted at check-in with drink vouchers, room upgrades, and additional points. You can also get late checkout, free WiFi, and access to members-only lounges with free snacks, beverages, and breakfast. Hotels can offer all of these perks to you firsthand because you are a direct customer with them. The same cannot be said about a third-party booking site.

Myth #3… Well, we admit that there is some gray area here. What is “better” for one traveler might not be “better” for another. Just don’t let OTAs tell you what’s best for you; that’s for you to decide.

Myth #4: The first hotel listed in OTA search results is the very best match for my trip.

Nope. Unless the very best match for you just so happens to be the property that paid to be the first hotel listed. Flags like “Promoted” or “Sponsored” accompany search results on many OTA sites. In other words, these listings are advertisements. These properties are paying the OTA site extra money in order to be bumped up in line. Yes, sadly, OTA hotel search is becoming a pay-to-play game. Some sites are even openly admitting this on their websites now:

Clicking on the info link from Travelocity’s site explains, “The compensation which a property pays us for bookings made through our sites is also a factor for the relative ranking of properties.” While we’re glad that sites like Hotels.com and Travelocity are being more open about this now, we don’t think your search results should be influenced by how much money the OTA gets from your booking. That seems a little backwards to us.

Myth #4… busted, straight from the horse’s mouth.

Myth #5: When I book through an OTA, my reservation is seamlessly transferred to the hotel.

While we wish this were the case, there is always a chance for failure when working with a third-party. Think about who you are doing business with: The OTA site. Who are you paying? The OTA site. Who has your contact info? The OTA site. It’s on them to transfer all of your booking information to the hotel for your stay.

But that’s not always as smooth as it should be. Your details could get passed incorrectly. Worse, your reservation could get completely lost. When this happens, the front desk agent at the hotel will be helpless. How can they locate a reservation that was made in someone else’s system? They’ll ultimately tell you to contact the site you booked with but, unfortunately, many OTA sites don’t make this easy. You may get stuck going back and forth from the OTA customer service department to the hotel front desk. Trust us, that’s a wild goose chase you don’t want to go on. Book direct, and you won’t have this problem.

Myth #5… busted.

At Roomkey, we love busting travel myths like these. We also love simple and honest hotel search. We’re not a third-party booking site or a middleman, and we’re certainly not an OTA. We’re a direct connection to some of the world’s largest hotel chains. The information and rates you see on our site come straight from the source, giving you greater peace of mind when you search for hotels. On roomkey.com, when you find a hotel you want to book, we instantly transfer you to the hotel’s website to complete your booking with the hotel itself. No third-party OTA sites. No tricks, just travel.