Dick Smith on Foreign Booking Sites

[kookaburra75]

As others have said, the less I see of Dick Smith the better. Although he does throw a good tantrum...

The booking sites offer convienence, in being able to quickly see who is around, and in a lot of cases book with out a cancellation fee provided you don't cancel within a week or so. The hotels pay a commission for us to have that convienence, and promote their products. Although the hotels are bound by their contracts with those booking sites not to charge less on their websites, than what they offer to the booking sites. However if you call they can offer you cheaper rates over the phone.

Australians told to call hotels

After I find a good hotel through the booking sites I then always book directly with them on future trips. They don't have to pay any commission

 

[pauly7]

[QUOTE="Slightly off topic but I find that wineries do the same thing with their pricing in that you can sign up to their clubs or mailing list and buy direct, only to find Dan's have the same product 20% cheaper.

Yes. Last time I went on a wine tour I stood there and Googled each of the wines I was interested in to see the price at Dan Murphy's. Some were a lot cheaper.

Yup it sure will be because Woolworths (Dan Murphy, BWS etc) have incredible buying power and huge market share leadership in AU, so they are able to screw the vineyards margin down to near zero but offer huge volume and certainty to the vineyards so they find it hard to pass up. They also have loads of their ‘fake’ label home brand wines to keep their average category price down and use that as a stick as well.

 

[VPS]

I'm happy to share one such link for Booking.com if wanted

Yes please

When I was in the UK last year I was looking for one night's accommodation late on a Saturday evening and saw something on booking.com so rang the hotel directly and the best they could do was 20 quid above booking.com. No brainer really.

 

[romney]

Yes please

When I was in the UK last year I was looking for one night's accommodation late on a Saturday evening and saw something on booking.com so rang the hotel directly and the best they could do was 20 quid above booking.com. No brainer really.

Thanks VPS - here it is. I only make a couple of dollars per booking, but really appreciate every cent.

<removed link>

(Affiliate is related to my blog. Link is in signature below)

 

[theblank]

Hotels in Australia and overseas do themselves no favours at all. I'm currently booking a 4 night stay In Paris at a hotel called Le Cinq Codet and am getting a price of AUD $1786 booking directly through the hotel versus $1589 on Booking.com. Both include breakfast and are non refundable.

It varies, sometimes the Hotels own website has a cheaper price, sometimes not. Some Hotel chains guarantee their price is lower, and will match or discount further. In my experience Australian country motels are cheaper when dealing direct with them.

I dont get how it works, but Dick makes a great point. If the price is the same, go ahead and book direct with the hotel/motel. Keep the money in Australia. The online TA's are all foreign owned.

 

[Forg]

Slightly off topic but I find that wineries do the same thing with their pricing in that you can sign up to their clubs or mailing list and buy direct, only to find Dan's have the same product 20% cheaper.

With wineries, part of the “social contract” you’re agreeing to is an ability to try before you buy.
This is why only the cheapest & most immoral cheapskate will taste-test at a winery & then buy through Dan Murphys.

 

[The man with no name]

With wineries, part of the “social contract” you’re agreeing to is an ability to try before you buy.
This is why only the cheapest & most immoral cheapskate will taste-test at a winery & then buy through Dan Murphys.

What are you talking about ? What social contract do I have ? Most people on mailing lists live too far from the wineries to partake in any try before you buy on anything more than an irregular basis. Even then many charge for the experience unless you make a purchase.

Dan Murphy has free tastings ever Friday and Saturday.

 

[kpc]

My attitude is that I work hard (and pay my taxes) so whoever is the cheapest gets my post tax dollar! I find buying wine at wineries is more expensive than Dan's where you can also get cashback and use 5% off gift cards! Having said that, I'm on a self enforced ban on buying wine until my stocks at home drastically decrease DS has made his money (lots of it) so don't have the audacity to tell me where to spend mine!

 

[marki]

Yes. Last time I went on a wine tour I stood there and Googled each of the wines I was interested in to see the price at Dan Murphy's. Some were a lot cheaper.

If you do want to book through sites like Booking.com but don't want to give all the commission to the overseas company, find an Australian with an affiliate link and click through their link to book. They then get a small percentage of the commission rather than it all going overseas. Not a complete solution, but a partial one.

I'm happy to share one such link for Booking.com if wanted

Totally agree and as an aside the grog at DM is cheaper than at the airport duty free. But still many people get cought up in the scam because basically that's what it is a scam to make someone money and it's not you.

 

[Scott K]

Ahhhh the grumpy old men and a camera vids. They are almost as ubiquitous as the muscly young white guy in a car doing a rant vids.

I get what Dick is saying, and I can understand his point of view. But he neglects to point out that the better rates you are getting by calling have come as a result of the market competition created by these sites. These sites became so popular because they usually did offer a cheaper booking rate. He neglects to deal with the reason so many people do use these sites is because they have consistently offered better value - and often when booking overseas, still do.

 

[trooper]

Neglects also to point out the properties have entered a VOLUNTARY agreement with the websites.... from the way he goes on you'd think they were forced to sign up at gunpoint. I wonder...was ANY of the cr...stuff he used to sell actually made in Australia? Or is he a rank hypocrite...

 

[theblank]

Neglects also to point out the properties have entered a VOLUNTARY agreement with the websites.... from the way he goes on you'd think they were forced to sign up at gunpoint.

They are "forced" to sign up to compete, or they will miss out on business. The online TA's do have a monopoly and despote the number of them there is really only two i think.

and that was his point. He doesnt neglect this at all.

 

[ian_baker58]

Bottom line is that these websites are (1) not paying GST in Australia, (2) charging commission on the gross amount including the GST portion (dodgy), (3) not paying any tax in Australia on their commission revenue - the commissions are going offshore.

For larger hotels, they have the 12-15% commission 'priced-in' to what they sell at on these online travel agents anyway. Their 'desk' people are simply not empowered to wheel and deal on rates/deals etc.

Smaller properties that are not 'large corporate owned' are generally not able to just add the commission on, and will usually do a deal for direct bookings in my experience, although not always.

My experience is that with smaller properties by contacting them directly (email/phone) they will usually have a better deal (often with add-ons not provided on the OTA sites), and they usually allocate their best rooms to direct bookings rather than the OTA bookings they are paying 12-15% out in commission.

In a number of European countries the Online Travel Agents are by law not allowed to enforce pricing party, meaning they cannot 'require' the property to have the same price on their own booking site as the online travel agent site. That is NOT currently the case in Australia currently where the ACCC has not had the gumption to tackle this issue, and so the OTA's require properties to have pricing parity (which is in fact anti competitive in my view)

The reality is that the OTA's have forced up prices overall (to cover some or all their 12-15% commissions)...

While I may not agree with everything Dick Smith says - he's right on this one...

 

[Grantxw8]

Emotional rant with some flawed examples but the core message is sound. There is quite a concentration of market power in the online accommodation booking sector - with Priceline and Expedia owning many brands. I do note though that needitnow is still Australian owned! I always check an online booking service and the hotels website - preferring the latter unless it is unrealistically priced.

But the math is quite astonishing - if you had, say a 25 room motel, with 60% occupancy at $100/night - at 15% commission that’s $82k a year if everyone booked through those channels, and still $40k if half booked that way.

I might be naive but I just don't understand why hotels advertise lower rates on the aggregation sites than they do on their own web sites. If they can make money at the rates they put on Expedia, for example, why can't they charge the same on their own sites when they don't have to pay the middle-man their commission? I used to make a point of checking this before booking and I don't recall finding a better rate available. Why would I chose to pay more?

 

[jetpack]

I'm surprised at the comments that calling directly gets you a cheaper rate as that has been the exception in my experience rather than the norm. This is where I think Dick's rant is flawed.

I almost always try and book at a site that offers a discount (are you reading this booking.com?) so I at least get a cut of their commission. Better in my pocket than theirs.

 

[Dee Thom]

Watched Dick’s video, and thought the idea good, but still go direct for most of my bookings locally, but through web sites for overseas travel.

 

[744]

If I may chime in as a motel owner! I own and run a small country motel as a background. The video that Dick made may be a bit shouty but he is correct.

It is a catch 22 situation. You really have to be on the OTA websites although I still get more bookings direct via phone, email and our own website. I also get a lot of repeat business. I just looked at my booking dot com stats and over the last 12 months I have paid them approximately $10200.00 commission. They have paid NO GST on this. I'm just one small place so multiply that by all the hotels/motels across the country and you see how much money is going overseas.

They are so large they drive your own listing down all the time so our own website is harder to find. They virtually direct how you run your own business. I am a 4 star rated property and about 6 months ago my listing on Wotif was downgraded to what they call 2 star. You have no idea how hard it is to contact anyone now they are owned by Expedia. I had to object online and they would give me no explanation as to why that had been done and nor would they reverse it. We are consistently the number one rated on TripAdvisor I might ad. I told Wotif/Expedia they could go jump and cancelled my listing with them.

You WILL always get a cheaper price by booking on my website or calling or emailing. Someone mentioned before you are not supposed to offer a cheaper price on line that what you give to the OTA. Well I have been doing just that for over 5 years now. I sell rooms direct at $10 per night less that what is with booking dot com. If some Dutch based mega company thinks they can tell me how much I can charge for my product they can piss off. They are responsible for driving rooms rate up. I still don't make up the commission amount by charging $10 more through the external site.

The ACCC is currently looking at making price parity on websites illegal as has happened in some European countries. Hoepfully they get it done soon.

I have no idea why bigger hotels etc wont match or beat the OTA's on price. All we ask as tax paying small business owners is that the OTA's are good for looking, not booking. Please take the time to search out motels own websites and book there or call and always ask for a cheaper price for booking direct. If small operators wont do that for you they are doing themselves a great dis-service.

Thanks for listening.

 

[Steve994]

I've got a week's accommodation booked in Hong Kong next month through Booking.com. Pay at hotel, not in advance. After booking I thought of cancelling and booking same hotel directly, but it's more expensive! However the particular hotel chain (Best Western) has a US website, and if I lived in the US and booked through them it's slightly cheaper. Work that out!

 

[dajop]

744 interesting to hear an owners perspective. I don't have much experience on the mass accommodation side, but we do let out our holiday home through airbnb and homeaway (expedia) who take about 15% of what the customer pays. So our guest have paid about $5k to them, on about 50 nights. They also have power and how they list and sometimes can be quite astonishing what pips you on the listing, and the crazy suggestions they make, trying to drive their own volume.

If some Dutch based mega company thinks they can tell me how much I can charge for my product ..

Actually, if you are referring to Booking.com, they are Dutch based, but US owned. The group that owns them also owns Agoda, Priceline, Kayak, Cheapflights, rentalcars.com and Momodo. Wotif.com is now owned by expedia, who also own hotels.com, orbitz, hotwire, travelocity, trivago, venere, ebookers, cheaptickets, carrentals.com, hotwire, travelocity and trivago.

With the evolution of the internet, these booking agencies have IMHO transitioned from booking portals to infrastructure providers - with a nice virtual duopoly. It is very difficult for startups to compete, due to the size of the incumbents and they have immense power over the providers that list on them.

 

[The man with no name]

The hotel/motel business globally has found itself in a self inflicted trap with these booking sites by not working harder to ensure consumers get a better deal by booking direct. If most people are like me they've tried booking directly once or twice in the past and found there was little if any benefit.

As described in an earlier post, I tried to go direct via a hotels website in France to find zero benefit, in fact booking.com was a little cheaper. I'm certainly not going to waste my time calling them and besides I don't speak French.

I'd also dispute that the prices have been forced up because of the booking sites. It's easy to make claims like that but I'd expect the reality has been the opposite. Not because of the booking sites but because of Airbnb.