Berlin, Germany – 23 October 2016
Entrepreneurial freedom is necessary but loopholes for price tricks are counterproductive: Offering volatile rates, hoteliers can generate more direct bookings – but at what price? Modern price bots like triprebel.com and dreamcheaper.com use loopholes in the terms and conditions to re-book already reserved rooms for lower rates. And when enquiring by phone, several hotels tend to undercut the named OTA rate in order to immediately generate a booking.
The Swiss magazine „20 minutes“ made test calls to hotels and determined: „Even in luxury hotels the rate is still negotiable.“ With the phone trick we could save several Euros, partly even including the visitor’s tax.
It is legitimate to undercut room rates on the phone. In Switzerland a current regulation specifies that hotel rates, which are offered in online travel agencies, must not be undercut on the hotel’s own website. A new law is now supposed to change that rule. Recently, the Federal Council was requested by parliament to prohibit the tight price parity clause between booking platforms and hotel operators with a legislative amendment. According to Andreas Zuellig, president of Hoteliersuisse, „hoteliers are considerably limited in their pricing structure and cannot respond to market changes, for example with short-term room rate discounts.“
Germany and France have meanwhile prohibited those gag clauses. In Italy an amendment to the law depends on the Senate’s decision. The Austrian Parliament discusses about a corresponding legal provision in autumn this year, which is then meant to become effective at the end of 2016.
Direct bookings enable hoteliers to strengthen the relationship between their guests and their own booking channels like the telephone, the front office desk and their own hotel website.
The hotelier also avoids paying commission rates, charged by external booking platforms – financial resources, which can be better invested in guest and quality.
More and more hotels use the advertising motifs of the Hotrec-campagne “book direct”. However, it remains doubtful, if this will lead to additional revenues through the increase in prices
Price tricker like dreamcheaper.com boast to achieve an average of 15 to 60 per cent re-booking saving of the pre-booked room rate; a 20 per cent handling charge is deducted. Algorithms search for better prices and upgrades; also in bed banks and other touristic trade platforms. The user receives a message as soon as the system found a better price for the same room category; if he chooses for the better offer, the old reservation is cancelled immediately.