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Old 05-19-2017, 12:10 PM   #1
Garpthefist24
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hotel booking business

How does this thing work? lets say you make a site with all hotes etc and someone pays through your site for a spot on one hotel , what happens next? can he pay the hotel directly through your site? or do you have to get in contact with the hotel and transfer the money there? also do you have to sign a contract with a hotel to book tickets for it?
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Old 05-19-2017, 01:43 PM   #2
Love Sosa
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Re: hotel booking business

Quote:
How does this thing work?
It doesn't. It's a mature industry with well established companies that are competing over a limited amount of dollars.
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Old 05-21-2017, 11:24 PM   #3
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Re: hotel booking business

i have no good idea alhtough i book alot of hotels on travel sites.

i think that when i buy a room from priceline.com that i'm giving them my money - including an explicit fee for priceline - and then they give the money to the hotel i.e. i don't pay the hotel. i give them my CC for incidentals/security when i check in but that's completely different.

the first responder is right. it is very very competitive and quite mature. something like priceline express has got very good for getting decent 3* hotel cheaply most places most nights.

but you asked a specific question so i was pleased to try to answer it. if i am correct and i pay you and you remit to the hotel then you need deep pockets, financial strength, experience etc... if it's just earning a fee on way through then not as important.
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Old 05-22-2017, 01:19 PM   #4
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Re: hotel booking business

I think the hotels pay for position/prominence on the websites (ie. booking / expedia / etc). eg. they will give like 10-20% of the posted rate to in order to be featured on the first or second page of results.
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Old 05-24-2017, 10:08 AM   #5
DefNotRsigley
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Re: hotel booking business

just spend 200 million to run commercials 24/7 on streaming services

then people can know your name is trivago but still never use you
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Old 05-24-2017, 01:03 PM   #6
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Re: hotel booking business

it might even be more complex than i originally described......

the one time i had a dispute over a priceline hotel reservation the front desk told me i booked through XXXX company which they told me buys spare capacity from priceline. anyway, it got worked out positively and fairly easily so that was nice.
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Old 05-24-2017, 01:40 PM   #7
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Re: hotel booking business

I had Expedia mess up one of my reservations before so I know more then I should about how it works. Essentially it's like head hunters and sales man where the site gets a finders fee for selling a hotel room but it's actually more complicated then that. Essentially the sites negotiate prices lower then listed/available for individuals then charge more on their sites for the room. If the person pays in person the hotel charges what Expedia tells them to (what it's booked at on the site) and gives Expedia the difference between their negotiated rate and what they paid. Most of the time people just pay through the site. The site then collects the money from the customer and pays their agreed upon rates to the hotel.

Honestly I don't see how you could enter the market unless you can offer something better then the existing companies (so investing hundreds of millions in advertising or some radical new platform/propiatary idea) because they will not give a nobody or even a somebody who isn't as established as the existing companies those rates.

The part I'm not getting into is the pricing is dynamic for almost all hotels and requires an infrastructure where hotels can update price instantly based on capacity. Hotel chains won't integrate your system if you can't guarantee x amount of business. Obviously I just saw a fraction of what occurs and there are nuances I do not know about the industry

Last edited by smoothcriminal99; 05-24-2017 at 01:49 PM.
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Old 05-24-2017, 09:45 PM   #8
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Re: hotel booking business

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Originally Posted by smoothcriminal99 View Post
I had Expedia mess up one of my reservations before so I know more then I should about how it works. Essentially it's like head hunters and sales man where the site gets a finders fee for selling a hotel room but it's actually more complicated then that. Essentially the sites negotiate prices lower then listed/available for individuals then charge more on their sites for the room. If the person pays in person the hotel charges what Expedia tells them to (what it's booked at on the site) and gives Expedia the difference between their negotiated rate and what they paid. Most of the time people just pay through the site. The site then collects the money from the customer and pays their agreed upon rates to the hotel.
you've booked a hotel online and then paid for it in person? i've never done that. rental cars that seems to be the norm though.

one very weird thing about buying hotel rooms on priceline.com - which i've done tons - for longer period of times is that their nightly rate is based on the max night. i don't think they average the 10 different nightly rates in their database... i think i'm right about this but could be wrong.......... i had a nice reservations manager at a hotel give me a moderate lowdown on priceline.com's reservations engine.
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Old 05-24-2017, 10:06 PM   #9
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Re: hotel booking business

one more thing i'll add as i'm interested in subject.

the industry is really maturing with more flexible options...

priceline which was always you bidding with generic bid - 3 stars, los angeles airport $80. then they took it or rejected.... LA is fine but smaller places you often could only bid a few times and bidding 5 times is a pretty big pain...... but NOW, priceline express basically offers you what you wanted at the lowest possible price perhaps plus 10-20%. now you have to option to accept/reject them.. a little more expensive but very simple to get nice 3 star hotel room.

hotwire would offer you a generic room. kind of like priceline express.. it was anonymous as to hotel.. but now alot of times you can see what the hotel is before accepting - historically sometiems you could figure out hotel from description. Westin dog kennel or something like that was dead giveaway.

anyway, the gap between cheap but limited info and big hassle AND much more expensive but stress-free and lots of info is filling in with new offerings.
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Old 05-25-2017, 12:52 AM   #10
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Re: hotel booking business

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Originally Posted by rivercitybirdie View Post
you've booked a hotel online and then paid for it in person? i've never done that. rental cars that seems to be the norm though.

one very weird thing about buying hotel rooms on priceline.com - which i've done tons - for longer period of times is that their nightly rate is based on the max night. i don't think they average the 10 different nightly rates in their database... i think i'm right about this but could be wrong.......... i had a nice reservations manager at a hotel give me a moderate lowdown on priceline.com's reservations engine.
I've never done it personally but it's always an option when i checkout.
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Old 05-25-2017, 12:45 PM   #11
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Re: hotel booking business

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Originally Posted by smoothcriminal99 View Post
I've never done it personally but it's always an option when i checkout.
isn't the hotel room paid for and booked right at confirmation with the 3rd party reservation company?

ok, i'm being told that expedia gives you the option of when you pay.. of course, they might charge you if you don't show up.
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Old 05-26-2017, 12:18 AM   #12
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Re: hotel booking business

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Originally Posted by DefNotRsigley View Post
just spend 200 million to run commercials 24/7 on streaming services

then people can know your name is trivago but still never use you
lol. qft
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Old 05-28-2017, 03:50 PM   #13
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Re: hotel booking business

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Originally Posted by Garpthefist24 View Post
How does this thing work? lets say you make a site with all hotes etc and someone pays through your site for a spot on one hotel , what happens next? can he pay the hotel directly through your site? or do you have to get in contact with the hotel and transfer the money there? also do you have to sign a contract with a hotel to book tickets for it?
It depends on the program you work with! Let's say you partner up with expedia, priceline, cityguidelounge, or or or...

Most of them offer "affiliate" or "partner" programs you can make money with! However, do not forget that their is an huge market for online booking platforms. It's not a problem to create a page - you need to make it famous too. Good page rank and so on, which means also that you've to invest an reasonable amount Just saying!
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Old 05-28-2017, 05:07 PM   #14
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Re: hotel booking business

Can tell you how Expedia works anyway.

Hotel creates an account, agrees to price parity rules. From there you create a listing Expedia has heavy control over. When the client books the room, Expedia does nothing. It does not verify the credit card information at all. It passes this to the hotel:

-Client name
-Client zip/postal code
-Dates, total
-credit card info (could be just rubbish numbers)

The hotel has 3 days to verify the credit card info or the credit info vanishes.

In terms of how visible the hotel is on Expedia, it depends. If a client filters by ratings, then the highest rated come first. However in the default view, as someone else has mentioned, the hotels give up bigger and bigger cuts to appear first. Effectively you're better off having $300 hotel rooms you discount down to $200, than having $220 rooms you discount down to $200.

Expedia's standard cut is 15% and it escalates from there. Booking is the same. Expedia is paid by the hotel (credit card for example). There is a model where Expedia can take the money, but don't believe it's used too much.
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Old 05-28-2017, 08:48 PM   #15
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Re: hotel booking business

Off topic but interesting:

https://skift.com/2017/05/25/the-dir...ast-in-europe/

I should've known from work travel, but I didn't fully grasp how fragmented European hotels are.

No wonder PCLN has been such a monster investment, it's like taking candy from a baby for them.
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Old 05-29-2017, 02:46 AM   #16
smoothcriminal99
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Re: hotel booking business

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Originally Posted by rafiki View Post
When the client books the room, Expedia does nothing. It does not verify the credit card information at all. It passes this to the hotel:

-Client name
-Client zip/postal code
-Dates, total
-credit card info (could be just rubbish numbers)

The hotel has 3 days to verify the credit card info or the credit info vanishes.
I don't think this is true I think expedia processes the payment. Expedia always is the one that shows up on my CC and when I had an issue I had already been charged by expedia but the hotel hadn't been paid so expedia had to give them a credit card to process (not mine theirs). It would be incredibly inefficient and susceptible to scamming if what you are saying is true.
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Old 05-29-2017, 08:04 AM   #17
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Re: hotel booking business

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Originally Posted by smoothcriminal99 View Post
I don't think this is true I think expedia processes the payment. Expedia always is the one that shows up on my CC and when I had an issue I had already been charged by expedia but the hotel hadn't been paid so expedia had to give them a credit card to process (not mine theirs). It would be incredibly inefficient and susceptible to scamming if what you are saying is true.
Where do you live?

Btw I'm not guessing at this. I'm telling you how it works, at least on this continent. What you're speaking of is what they consider "Merchant Bookings". Most places don't do them because the rates and payment schedule are unfavourable.

Agency Bookings: For some bookings, AAE and/or any AAE Companies (“Agent”) will only act as an intermediary between you and the service providers, and you agree that the contractual relationship will be directly between you and that service provider. The Agent’s sole role and responsibility is to transmit the details of your reservation to the relevant service provider (“Service Provider”), and send you a confirmation email for and on behalf of the relevant service provider (“Agency Bookings”). Payments for all the Agency Bookings will be in accordance with the terms and conditions set out by the Service Provider (“Service Provider’s Terms”). You agree to be bound by the Service Provider’s Terms, which could include (but not limited to) the Service Provider’s rules and restrictions regarding availability and use of fares, products, or services. Certain service providers could also offer the opportunity for reservations to be paid or a deposit to be taken during the reservation process by means of secure online payment. For all Agency Bookings, payments will be processed directly by the Service Provider on your credit/debit card or bank account.[/I]
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Old 05-29-2017, 11:43 AM   #18
rivercitybirdie
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Re: hotel booking business

WSJ had article on weekend about hotels trying to wrestle back control of reservation process from sites like expedia....

i know some hotel chains guarantee that their website will have lowest price available - i would assume often tied with the lowest aggregator site... not sure if that applies to the generic hotel room sites like priceline and hotwire...

i looked up priceline's financial statements. definitely room fees do not go through income statement. i forgot to check whether they have massive "trust"-type asset - offset by similar liability - on the balance sheet
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Old 06-12-2017, 04:52 AM   #19
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Re: hotel booking business

a year or two ago i used hotwire and they had a lolfax at the hotel with my reservation

the amount listed on it was about 20 pct less than i was paying
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Old 06-12-2017, 07:40 AM   #20
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Re: hotel booking business

So found out, basically the bigger chains have you pay direct to Expedia at 18% commission floor. Smaller do 15% direct to the hotel/inn. So if you're booking a large hotel, most of the time it'll be direct. That explains how all the places I know are doing it the other way.
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