The relationship between when you book and what you pay has been manipulated by the travel industry from the day we realised that guests would change their behaviour to benefit from discount prices. In the 1980s, the hotel industry conditioned people to wait until the day of arrival to negotiate the best deal. In the 1990s, the industry, following the airlines, prioritised its rates so that booking early, particularly with the biggest brands, guaranteed the best rate – day of arrival bookers were forced to accept the highest rates.
Last month, I realised I needed to attend a meeting in Cape Town the following day, so I opted to see what online last-minute deals I could find for car hire and hotel accommodation.
Lastminute.com and Expedia are the market-leading sites, with Expedia the undisputed biggest travel agent in the world – $29 billion worth of bookings placed by them in 2011. Expedia’s huge purchasing power is applauded by some, but in practice, having such a large portion of rooms transacting through one agent actually sucks a large amount of value out of the industry.
In most mature hotel markets today, the ‘opaque’ booking engines such as Priceline and Hotwire have carved out a niche promoting bigger rate discounts at a specific location and star grading. These opaque sites can often secure lower prices than other platforms, as the hotel name isn’t disclosed until the guest commits to the deal – the brands prefer this practice to merely discounting their brand openly on a third party booking engine.
It was an opaque engine that I used to book the hire car in Cape Town. Unfortunately, rentalcars.com proved a little too opaque – nothing on the online confirmation or on the emailed receipt said which car rental company I was to use. Arriving late in Cape Town, it took a phone call to rentalcars.com’s international helpline to discover that Hertz held my reservation. The supposed convenience of booking online was eroded when Hertz refused to accept my debit card, despite being happy to accept payment from it! So, around 11pm I became a walk-in customer at Avis. It cost me R250 more, but next time I will book direct with Avis.
Hope to see you in departures.
Ewan Cameron – CEO: Lonrho Hotels