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Hoteliers Prepare to Work with Online Travel Agencies

Hoteliers Prepare to Work with Online Travel Agencies

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online-booking-hotelier-hospitalityBy Latanya Hughes
Faculty Member, Hospitality Management at American Public University

The travel and tourism industry is booming. Travelers can compare and book services 24 hours a day, seven days a week via the Internet. With the increasing use of the Internet for travel accommodations, consumers must be mindful of how changes as well as advances in technology will impact their plans. Online booking sites like Expedia, Travelocity, Orbitz, and Priceline offer competitive, discount prices for travelers around the world. Recently, Travelocity decided to outsource their services to Expedia; the merger is expected to take place next year.

What does this mean for travelers? This could be a positive merger or be a repeat of what happened when Priceline bought Kayak for $1.8B. That merger resulted in poor content development and misleading prices. According to Christopher Elliott of the Chicago Tribune, “Travelocity will receive a needed upgrade that will allow travelers to book multi-destination packages. They’ll also have access to more hotel inventory and additional payment options.” Insiders for Travelocity argue that their brand will remain intact, but all of their content and customer service will be managed by Expedia. Travelocity will, also, be able to offer its own promotional material.

When utilizing online booking services, consumers should also be mindful of booking fees and taxes. When Priceline took over Kayak, consumers were finding lower rates on the Kayak site. This was due to poor migration and insufficient data management. Elliott reports that the rates Kayak posted from another Priceline-owned site did not include booking fees and taxes; thus, their rates appeared to be lower. This, of course, was misleading to consumers. As a traveler, you should be aware of the fees and taxes you’ll be charged.  Online booking services are essentially online travel agencies. As with traditional travel agents, these third party companies charge fees. Some of these are commission-based. Unfortunately, due to the increased use of these services there is proposed legislation that will negatively impact hotels and may require them to pay higher taxes.

The Internet Travel Tax Fairness Act is proposed legislation that will prevent state and local governments from collecting room taxes from online third party intermediaries (TPI) when hotel rooms are booked through such companies. The American Hotel & Lodging Association (AH&LA) is opposed to this legislation, citing it will make it difficult for hotels to market their rooms fairly and competitively. According to AH&LA, no legislation has been formally introduced in either house, and AH&LA continues to strongly oppose the issue. Until this issue is resolved, some online booking services may limit the availability of published locations. For example, Expedia, Orbitz, Travelocity and other online booking services have excluded hotels in the Columbus, Ga., area due to lawsuits. When using online booking services, consumers should always exercise due diligence. When in doubt, take the chance and book directly with the hotel.

About the Author:

Latanya Hughes is a motivated, personable results-oriented business professional with a Bachelor’s from Tuskegee University and her MBA from Strayer University. She is presently completing a Doctor of Strategic Leadership in Global Consulting from Regent University. She is a full-time faculty member at American Public University where she teaches courses in the Hospitality Management program. 

Latanya has worked for over a decade across the hospitality industry, from food and beverage to hotels. She has a successful 14-year track record in improving operational efficiency and team effectiveness. For more about Latanya, click here.

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