These days, travelers have lots of choices when planning a vacation. You can log onto Expedia, Orbitz, or Priceline instead of simply calling your favorite airline for tickets. And these sites promise massive savings, along with one-stop shopping for travel, accommodation, and even vehicle rental.
But are the amazing deals too good to be true? What do online travel sites know that we, as consumers, do not? And where does the traditional travel agent fit into the world of affordable vacations advertised online?
The truth is, you can find great deals on travel sites. They can also be a lot more convenient than putting together the travel experience yourself. At the same time, these sites are businesses. They’re always going to take their cut.
It can be tough to navigate the flood of travel sites competing for your vacation dollar. That’s why we asked travel experts, both online and off, to explain how these sites work. Here are the secrets online travel services don’t want you to know.
The appeal of online travel agencies--or OTAs, as they're called in the industry--is that they're supposed to get you cheaper airfare, right? Not necessarily.
A classic New York Times experiment tested travel agents versus OTAs on airfare. Allow us to quote:
"The result: Nearly every time, travel agents bested the Internet big boys on both price ... and service."
But wait, you might say. That test was completed all the way back in 2012. How have things changed in the years since?
If you ask the travel agents, they haven't. A 2016 study by the American Society of Travel Advisors found an average savings of $452 per trip when travelers book with traditional agents.
Of course, there are other reasons some people prefer travel agents.
“As a travel professional, I always strive to get my clients the best vacation experience,” said Stephanie Goldberg Glazer, a travel agent with the service Live Well, Travel Often. “I do that by customizing my clients’ vacations to their needs and desires.”
That sort of concierge service is largely missing from OTAs, at least for now.
If you want the most affordable airline tickets, book early; that was the conventional wisdom. As it turns out, though, these days, things aren't so simple.
Online travel agency CheapAir.com crunched the numbers from more than 900 million airfares advertised in 2017 to find the cheapest flights between the U.S. and more than 3,000 locations.
They found that buying early does indeed tend to yield lower prices--but not too early.
"In most markets, someone buying a ticket two months before a flight will pay less than someone buying a ticket 10 months before a flight," Seth Kaplan, managing partner of Airline Weekly, told CNBC in 2017.
Ultimately, the CheapAir.com study found that travelers can snag the lowest-cost tickets between two weeks and nearly a year before the flight, depending on the travel destination.
Regardless of when you book, a glance beyond the internet might open up wholesale fares available only through large-volume buyers like travel agents. These unpublished fares can result in serious savings, and they aren’t available through OTAs or by calling the airline directly.
“Your travel professional should have access to unpublished fares you’d never have known existed because they’re not public,” said Shylar Bredewold, lead travel advisor at Odyssean Travel.
Travel sites don’t seem content with just selling you a ticket. They also want you to book your hotel and rent a car, and they offer seemingly attractive packages that involve bundling everything into a single cost.
The trouble is, that “one low price” probably isn’t as low as you could achieve by booking directly through the airline, hotel, and rental services yourself. For some time now, both hotels and airlines attach an extra fee to bookings made through the big travel sites.
These fees lead some independent lodging providers to keep their properties off of OTA sites. Kristin Fintel is the innkeeper at Oregon’s Chehalem Ridge Bed and Breakfast. She suggests looking beyond travel sites to find hidden gems.
“Online travel agents charge lodging properties high commissions (routinely up to 20 percent), which increases the overall cost of travel for everyone,” said Stephen Fofanoff, innkeeper at Domaine Madeleine Bed and Breakfast in Washington state.
“Because of the commission and logistics, currently, our property does not use online booking sites to get reservations,” Fintel said. “Booking sites don’t want the traveler to know is that there are amazing options for lodging that are not on their site.”
At any rate, stack those lodging fees on top of those charged to airlines, and you sometimes end up overpaying. Besides, travel packages may hide unpleasant details in the fine print--like flights with layovers or strange hours.
Travel sites sell airline tickets the way the butcher sells meat, right? You’d be forgiven for thinking their whole business plan is based on airfare fees. In fact, though, flights don’t make these sites most of their money.
Not too long ago, travel sites were raking in the most cash not from flights, but from hotel bookings. In 2013, Priceline made nearly all of its profits from booking hotel rooms. Of course, in the years since, hotel chains in the U.S. have begun striking back at third-party, online upstarts.
Regardless of the business plan, all these sites have one thing in common: They’re about way more than getting you the cheapest airfare. That’s not to say you can’t find deals on an OTA. You can. You just shouldn’t assume that the OTA always has the best, most affordable option for your next vacation.
Are you a Mac person, or more of a PC fan? Believe it or not, the difference could impact your travel search results.
In 2013, Orbitz studied Mac and PC users and their travel habits. Perhaps unsurprisingly, they found that Apple fans tended to spend up to 30 percent more per night on their hotel rooms than their PC-using counterparts.
So the Orbitz folks did the logical thing. They changed their site code so that it would list more expensive hotel options first when results were viewed on a Mac. Of course, these companies won’t share information about their algorithms these days--but it’s safe to assume that if prioritizing hefty spends for Mac-users boosted the bottom line, the practice is still common.
Many online travel sites are actually aggregators--they simply collect the deals offered on other third-party booking websites and display them all to you in one easy-to-browse location. The trouble? If one of the third-party services drops the ball, you could end up with a cancelled booking.
That’s what happened to Jon Harrington, an army reservist stationed in Krakow, Poland in 2018. Harrington booked a room for his wife through an aggregator site that funneled him toward the Hong Kong-based booking service HotelQuickly, which later cancelled his reservation without warning.
He later booked his wife’s room by calling a hotel directly, but the damage had already been done. Harrington told The Boston Globe what he learned from the ordeal.
“You shouldn’t automatically trust sites that book your stay, even when you begin your search with one of those big, trusted online travel sites,” Harrington told the Globe.
Fofanoff echoes Harrington’s concern.
“Some OTAs do not always have accurate information on a lodging property’s availability, which can result in double bookings, inaccurate reservations, or unexpected surprises when checking into the property,” the innkeeper said.
Of course, those big, U.S.-based online travel agencies have pretty good records. You’re unlikely to lose a booking domestically. But if you really want to be sure, it’s worth it to do a little online research about your service--or simply call the hotel directly.
If you’re a die-hard fan of Southwest, you’ll have to forego the convenience of an online travel agency. The airline has blocked third-party vendors from showing their prices for years.
Delta is following suit, having removed its data from about 30 websites and apps. JetBlue also prevents 12 or so sites from selling their services. But why would a company limit its exposure to consumers? It’s all part of the complex arm-wrestling match between airlines and online travel agencies.
See, the airlines don’t want to pay the finder’s fee that online travel agencies demand. They’d rather keep all your money for themselves, and the best way to do that is to ensure that you book via their website, not someone else’s.
That doesn’t mean you won’t find the cheapest available flight on Priceline or Google Flights. It just means that these services won’t necessarily show you everything--and for certain airlines, such as Southwest, you have to deal directly.
Online travel sites aren’t standing still. In fact, you could make a good argument that they have plenty of room to improve.
Trust Pilot is a leading online consumer review site like Yelp, but for all sorts of companies. Two of the leading online travel agencies, Travelocity and Expedia, each have a one-star rating from Trust Pilot, which is...not good.
You’d better believe the companies behind these sites are aware of their reputation, and they’re doing everything in their power to change it. Mark Okerstrom, president and CEO of Expedia Group, recently told Forbes that their services will expand to include many of the concierge services traditionally available only from brick-and-mortar travel agencies.
“The next 25 years [will be] about putting the A back in OTA--doing what the travel agent used to do,” Okerstrom said.
The CEO suggested that Expedia could use artificial intelligence to better provide services related to vacation destination and adventure planning. Of course, this brave new world of OTAs hasn’t yet arrived--but it will, and soon.
Bredwold has a point; as of 2018, Expedia Group owned 70 percent of the online travel market, while Booking Holdings commanded 23 percent. That leaves just 7 percent for smaller upstart OTAs to fight over.
Competition drives prices lower, economists say. So it stand to reason that with the myriad of OTAs out there on the internet, their prices must be incredibly low. There’s just one problem with that theory: Years of consolidation have resulted in the same few companies owning a huge swath of the booking online booking platforms available.
“All of those OTAs and aggregators are owned by the same two businesses: Expedia Group and Booking Holdings,” said Bredewold. “The choice in [the customer’s] travel plans becomes a perceived one and not a real one.”
Of course, not all the competitors are mom and pop shops. Facebook, Google, and Airbnb are in full-on assault mode against the major OTA players.
None of this is that important to travelers planning their dream vacations, of course. It’s just something to keep in mind as you complete your comparison shopping and explore your options, online and offline alike.
In the end, the only important thing is that you have the time of your life on your next vacation. And OTAs do offer something that you won’t find with a notebook and a phone.
“You can book everything in one place,” Okerstrom told Forbes. “If something goes wrong, we can solve your problem in one place.”
Convenience sells, and that's the OTA’s real product. It never hurts to check out the OTA landscape as a first step in your travel planning. At the same time, it doesn’t hurt to run the rates you find past airlines, hotels, and a traditional travel agent before making a purchase.