Getting the Best Hotel Rate

Pic 1I was talking with some recent guests about booking accommodations and they were unaware that booking direct can often times save you money, so I though I would share my thoughts on how to get the best price when you are booking lodgings for your trips, be it here in the Cusco region, or almost anywhere around the globe.

Pic 2

 

So how do you get the best price on accommodations? I am glad that you asked, and the short simple answer is go direct to the accommodations when booking. Now for an explanation as to why this is, some exceptions to this general rule, and instructions as to how best to find and book an accommodation, please keep reading.

OTA’s

Pic 3If you believe their claims, OTA’s or Online Travel Agencies like Expedia or Orbitz, offer the best pricing, normally due to rate parity clauses (see below), but in reality properties that advertise on them must pay a commission to them to be listed there, as such by going directly to the accommodation you may be able to save this commission amount.

Rate Parity

Pic 4Every OTA that we have ever dealt with has a “Rate Parity Clause” which basically states that there can not be a lower published rate offered, than what is offered on their website for the same room with the same amenities. Because of this any rate you see on one site, should not be lower on another site, for the same room and dates, even rates on our own website can not be lower than what we have on Booking.com or other OTA’s.

Commission’s

Pic 5So just how much is the commission on a booking? This really depends on not only the OTA, but also the property, for example Trip Adviser has at least two pricing models, one where properties pay a commission on bookings, and another where an annual fee is paid. Booking.com has a commission range from 14% to 32%, allowing properties to adjust the commission amount to improve their placement on searches. Airbnb charges one of the lowest fees for the accommodation at only 3%, but then charges the guest a booking fee to offset this.

Credit Cards

Pic 6The services and systems necessary to be able to accept credit cards for guest stays cost money to maintain, this cost is generally passed on to the guest in one of two ways. 1) The cost is charged on a per-use basis, meaning if you pay cash, no fee, but if you use a credit card you will pay a fee (usually an additional percentage) 2) The costs are figured into the room rate so that all guests are paying for the service, whether they pay by cash or card.

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Pic 7OTA Pros

There are a few positives when it comes to the OTA’s and the first is convenience, they give you one place where you can search through a lot of options, for example a quick search of Cusco on Booking.com will give you around 870 options to choose from. The second is the search filters that most have available like price, star rating, property type and other amenities, so by just selecting 4 filters one can reduce the 870 options to a more manageable 24. Additionally some OTA’s like Booking.com offer free cancellations, which may be a pro for travelers, but is often times a con for the accommodation owner as people will sometimes book a room, then change their mind and never cancel the first booking as there is no penalty. Please keep this in mind when booking as for small accommodations like ours, a last minute cancellation or now show can make for a possible loss of income.

Pic 8OTA Cons

People may not realize it but there are also some negative sides to the OTA’s, and the commission is one of them, you may be thinking that this is not a big deal as the accommodation is paying it, but like any business cost, it is passed on the the consumer, or in this case the guest, in the form of higher prices. Another down side is that not all properties are listed on these sites, some property owners that I know refuse to list on the OTA’s as they do not want to have to pay commission on their bookings, this is of course their decision but it also means that if you only use OTA’s, you might be missing out on some very nice places to stay. Another down side is that even those properties that do list on the OTA’s, may not list all of their rooms, so you may find a property that you like and want to stay at, but it is not showing any availability, even though the property still may have rooms available.

Exceptions

As I mentioned above, there are those exceptions to what I have mentioned above, for example Trip Adviser is actually not my favorite OTA to try and search for a property on because they only have 4 accommodation categories and currently, only limited filters. We have also found properties in the past that have indicated that the rate booking direct with them would be higher than what was shown on an OTA, not the best business practice in my opinion, but if they want to loose money, that is on them. Additionally some places listed on sites like Airbnb may not have websites as they are just basically rentals and not actual accommodation businesses, in these cases contacting the property directly may be almost impossible. You may also find that large chains may not be as willing to offer discounts for booking direct, which could be for any number of reasons.

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Pic 9“So just how do I go about getting the best rate?”, well when we are looking for an accommodation when traveling we generally run through the following steps.

  1. This is the most obvious step, but I did not want to leave anything out, you must first decide on a location and dates, which may require at least a rough draft of an itinerary.
  2. Do an initial search for an accommodation. We usually start with sites like Booking.com, Expedia and/or Airbnb. It is important to remember at this point that not all properties are listed on these sites, so it is just as important to do a web search with key words for what you are looking for, like B&B in Cusco or hotel in Cusco, which may produce options that you wont find elsewhere. Generally at this point we try and narrow things down to 2 or 3 properties we like.
  3. Check out reviews, while many OTA’s like those mentioned above will have reviews, we usually check Trip Adviser as well. There are a few things to keep in mind when reading Trip Adviser reviews, with the main thing being that there is no verification requirements, so it is possible for properties to be miss identified, there are also companies that offer paid reviews, and bad reviews by competitors or vindictive guests are also possible. I tend to try and read between the lines and always consider the properties response to a review when reading as well. There is also a site called Review Skeptic where you can actually test reviews to see if they are fake, at least according to their algorythems.
  4. At this point you should have a preference as to where you would like to stay, and unless it is an apartment or other type of rental that my not have an actual website, you should be able to find contact information for the accommodation so that you can contact them directly. For an example I just did search on Booking.com for accommodations in Iquitos Peru, one property I found is the Victoria Regia Hotel, a quick Google search found me their website with phone and e-mail information. I even checked the top 10 properties on the search results and 7 out of the top 10 properties, had their own websites with contact information.
  5. All you have to do now is to contact the properties, tell them the lowest price that you saw on line and where, and then ask them if they can beat it if you book direct. I usually phrase it like “I see that on ____ you have a price of $___ per-night, If I were to book direct with you and save you the commission, would you be willing to give me a discount?”. Once they respond you can then ask about a cash discount (if you intend to pay with cash), and at this point you should have their best price.
  6. Now it is decision time, based on responses you can decide who to book with and know that you did your best to get the properties best rate. If the property that you want to book with will give a discount for booking direct then book direct, if they will not give you a discount to book direct, then I would use the OTA so that they have to pay the commission, no sense saving them money if they are not going to share.

Pic 10For reference, here at GringoWasi we do offer discounts for those that book direct and ask for one, and as we only charge a fee to those that wish to pay by credit card, no extra discount is available for using cash.

Disclaimer

This is an example of how we book when traveling and may not always work, contacting the manager or owner or the accommodation usually provides the best opportunity for a discount, but can also require making a phone call. This will not guarantee a discount but generally only takes a few minutes to do and in my opinion, is well worth the time.

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About Lyle

I love travel and am currently operating a Bed and Breakfast called GringoWasi in Cusco Peru with my beautiful Peruvian wife.
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2 Responses to Getting the Best Hotel Rate

  1. Cathy Fulton says:

    This is excellent information, Lyle. Actually, I think I originally found you through AirBnB (or maybe it was another OTA) way back in 2014, but then searched for you directly and found your website that gave me better info than AirBnb. I also knew you would save on the commission, so I booked through your website even though it was the same amount. (I guess I should have emailed and asked for a discount 😉 ) At any rate, from now on, I will also contact directly when I can.
    Of course, I am glad I found you guys–no matter where it was I first saw you–there is no way I can come to Peru and not stay at GringoWasi!! BTW; You are getting to be a real travel agent. You must love your life!

  2. Lyle says:

    We are glad you found us to, we really enjoyed having you here with us and we hope to see you again some day, either here or there in Maui.

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