To really predict or gauge the impact a new third-party booking channel will have on the hotel industry, it’s often best to take the simple approach: Put yourself in the shoes of a consumer and ask what the benefits are to you. If there’s no reason YOU would book through a third party, then typically there is no reason anybody else would either. And if no one books, the third-party company isn’t going to have much success, no matter how much media coverage or marketing dollars they throw behind it.
When Expedia executives first introduced the agency model on the company’s second-quarter earnings call three months ago, I began thinking what the ramifications would be. So now I can book a room on Expedia.com and pay later at the hotel. OK, cool. But what else does it allow me to do?
A Gamification experiment:
Armed with the ability to make a hotels reservation today, pay later and shop around in between, I decided to conduct an experiment using these new(er) third-party sites that promise me, as a consumer, a great deal. In the process, I learned a lot about how these sites operate and that, in fact, they really aren’t getting me a great deal at all.
First, I booked a hotel room for an upcoming stay on Tingo, the site that promises to monitor your reservation; if the rate at that hotel drops, Tingo will cancel the reservation and re-book for you, then refund you for the difference. The rate I booked on Tingo was the exact same as it was on brand.com for the same room on the same nights (in parity).
Then, I sent my reservation to Backbid, the site that promises to send you “bids” for your business from competing hotels in Philippines are the same category and geographical area.
The trip is still nearly three months away, but here are the results so far: Tingo continues to “constantly (obsessively) watch the rates for my reservation” but hasn’t saved me $1 yet. Every two weeks or so I get an email saying they’re still monitoring, but I have zero faith that the rate will actually drop at this hotel. In fact, the rate for a reservation similar to mine has increased (must have a smart revenue manager).