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3 Mar 2020

Why you're paying too much for your hotel

The secret Booking.com and Expedia don't want you to know

Travellers are paying up to 12% too much for their UK hotel room, an investigation by Which? Travel has found.

Booking.com and other big multi-national sites, such as Expedia and Hotels.com, claim to offer the best price when you book accommodation through their platform.

But there's a little-known trick that will save you money. When we tried it, we got a better deal eight out of 10 times.

Rate-parity clauses

The reason for these inflated prices is something called 'rate-parity clauses'. Online travel agents (OTAs) want the best deals for themselves, so they ban many hotels from advertising lower rates on their own websites.

This small print is written into their contracts - a practice which is illegal in Austria, France and Italy, where it's considered anti-competitive.

In the UK, the Competition and Markets Authority (CMA) stopped short of doing the same, despite a recent crackdown on unfair practices in the hotel-booking industry.

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Up to 25% commission

OTAs also charge a commission - typically 15-25% for every hotel room booked on their site.

Small, family-run B&Bs can't afford to take that sort of a hit, so they have to raise their prices. And because of these parity clauses, price increases apply to all platforms - even the hotel's own website.

It means the customer gets an inflated price, whether they book on the hotel's website or with a third-party site.

The OTAs justify this by citing the billions of pounds they spend on advertising each year. They say that hotels benefit from this visibility and shouldn't get a free ride.

A spokesperson for Expedia told us: 'We provide a global marketplace for chains and independent hotels alike to compete with their peer hotels, by making them visible and bookable worldwide.'

Booking.com agreed, saying: 'Our platform is a really cost-effective marketing channel. Hotels only pay if we do our job well and get them a booking.'

Both deny that their commissions are driving up prices.

Book direct and save

However, we've found that consumers can often get around this price hike with one simple trick.

Rate-parity clauses only apply to prices offered on the hotel's website - not on the phone, by email or in person.

Contact the property direct and you can often negotiate a lower rate or additional perks, such as a free room upgrade or bottle of wine.

When we tried it out for 10 hotels on Booking.com, we got a better deal on eight occasions. For one Cornwall hotel, we negotiated a £20 discount, plus a free upgrade. Other sweeteners included free breakfast and parking.

The Google graveyard

But OTAs don't make it easy to contact the hotel directly.

Between them, Booking.com and Expedia own most booking sites, which dominate the top search rankings on Google.

Frank McCready, owner of the Old Brewery Guest House in Yorkshire, told us he was lucky if his official site appeared in the top 10 search results on Google.

He told Which? Travel: 'You think these sites will top up your bookings during quiet periods, but that's not their mission - they want 100% of your bookings.

'These sites are bullies. You have to do as you're told or they will put you out of business. It's a protection racket - and, ultimately, the customer pays more.'

The OTA stranglehold

Frank claims that when he complained, he was punished with a series of dirty tricks to damage his sales.

He says his property was falsely listed as fully booked on Booking.com, then later displayed at an inflated rate of £500 a night.

Booking.com denied this, saying that it can't manually alter rates once loaded by the hotel.

But we got hold of a letter from Booking.com to a hotelier who was caught offering a lower rate on their own website.

It warned that by undercutting prices they risked 'lower visibility and slower business growth'.

Booking.com denied that this was a way of punishing sites that flout the rules. 'If a listed property is overpriced, it will rank lower because it's less popular with customers,' they added.

How to get the best room rate

  • Find a hotel on Booking.com (or similar)
  • Google the name of the property and scroll down to find the official site
  • Email or call the hotel direct
  • Quote Booking.com's rate. Can they better it?
  • Calculate 15% to 25% of the rate. This is the potential saving for the hotelier, and a good indicator of wiggle room

Did you try our trick and make a substantial saving? If so, email to let us know at travel@which.co.uk.