I looked at, completely arbitrarily, expedia/hotels.com, orbitz, travelocity, and AA vacations (that last just to cross some lines). I only compared them for 5 randomly chosen hotels, which of course does not make for a very thorough survey at all, with no statistical value. But the anecdotal value is pretty clear. I didn’t have time for anything very involved, so I just chose those four providers and my 5 hotels more or less at random, but they all come from different chains spread across very different destinations. In no case did a hotel have a lower price than one of the first three providers. AA Vacations (ezRez?) did have a huge markup for a couple of the hotels, but then they had lower prices than the others for a couple of other hotels. In no case did all four offer the same price, and it was rare in fact for more than 2 of them to have the same price.

Not that this is surprising, but it tends to suggest that hotel sites should not expect to see more direct reservations over time unless industry economics change. So it seems that savvy travelers should continue to use these major online services, perhaps with a federated search on top, seeing as no one aggregator (not expedia or anyone else) has consistently lower rates for all chains and all holiday destinations.

What does this mean for the OTAs ? Clearly they have to be able to differentiate themselves more and more from the hotel websites.

One can see this already in things like reduced booking fees, increased and new types of OTA guarantees… but what they still have going for them is some negotiating power with the airlines to take net rates and package with hotel rooms etc… at a better price than the consumer themselves can do. Nobody has yet come up with a way for hotels to package air (and so give them their own opaque channel) in a way that competes with the OTAs.

Hmm… packaged hotel/air to give opacity to hotels… what goes around comes around (for those in the room old enough to remember!)

The figures for Priceline go up around 20% year-on-year for 09/10/11/12 (the figures are increases of 20.3%, 25.8%, 19.7%, 16.7% for these four years)

The figures for Orbitz are much less uniform. For the same four years the changes are -8.6%, 6.4%, 8.4%, 7.5%.

So these figures suggest that Orbitz will react next year to the decrease this year, but afterwards will only see a modest growth (the same goes for Expedia). Yet Priceline will continue their growth of about 20% each year.

Looks like there’s quite a few assumptions being made!

As the old quote goes, “may we live in interesting times”