Canadian Finance Blog

The Complete Guide To Booking The Best Hotel Deals

Posted: 17 May 2011 02:00 AM PDT

Nearly 60% of hotel guests booked their hotel rooms online in 2010, compared to just 20% in 2005. With the popularity of online travel agencies like Expedia and Travelocity, booking a room online to get the best hotel deals has never been easier, or more confusing.

Your hotel can make all the difference between a great travel experience and a vacation nightmare. But with so many websites to choose from, how can travellers ensure they will get a great hotel experience without breaking their budget?

As a former hotel employee with over 10 years of experience, I’m going to share with you the complete guide to booking and saving money on hotel rooms.

TripAdvisor

If you are unfamiliar with your travel destination then TripAdvisor needs to be your first stop. TripAdvisor is the largest travel community in the world and their website features reviews and advice on hotels, resorts, flights and much more.

Gone are the days of hotel brands showing you exactly what they want you to see on their website and brochure. TripAdvisor revolutionized the travel industry through user generated reviews that give honest feedback about actual customer experiences in hotels.

They highlight the best and worst of hotel experiences with comments like:

"Immediately noticed the filth and smell. Room was a good size but apparently too big to be cleaned…EVER!"

"A near perfect blend of warm service, sumptuous dining, breathtaking hilltop sea views and home style charm."

TripAdvisor Tips

TripAdvisor is not a booking site, although it can direct you to other booking channels to compare rates and make reservations.
Hotels are rated from 0 to 5 stars. Make sure that the hotel you are reviewing has a large number of customer reviews. Hotels with fewer reviews can be easily skewed with one really bad (or really good) customer experience.
Check the most recent customer reviews. A large number of positive reviews on a hotel could have been received in the first year or two after opening (or after a major renovation). The condition of the hotel or its customer service could have changed considerably since then. You want to know what the hotel experience will be like now.

Online Travel Agencies

By now I'm sure that most of you have heard of online travel agencies such as Expedia, Travelocity and Orbitz. Online travel agencies became popular channels for hotels to sell unused inventory back in the late 90's and early 2000's when the hospitality industry was in decline.

Now most hotels have dedicated employees managing these channels on an ongoing basis, updating rates, opening and closing out inventory, and checking up on their competition several times a day. Customers can be assured that hotels must offer "rate parity" across all of these online channels (including their own website) or they risk being dropped from the programs.

One simple way to check rates across all of the different online travel agencies is to visit Kayak.com. Kayak's website and free mobile app allow you to check hundreds of travel sites at once and will even give choices of where to book your airline, hotel, car rental and online travel agency site.

Priceline

Travellers who want to save money but aren't very picky about the hotel they stay at can try their hand at Priceline.com. Priceline allows you to "Name Your Price" with their online auction style bidding format.

With the Name Your Price format on Priceline, travellers can select the destination, area of city and star rating of the hotel they prefer to stay at, as well as the price they are willing to pay. From there, customers enter a booking window where they must agree to the terms and conditions of Priceline which states that if the customer bid is accepted, it will be booked and charged to their credit card. If the bid is rejected, customers can begin the process all over again.

Some notes about Priceline:

If Priceline accepts your price, they will book your reservation in a property with an equal or higher star level than you requested.
Purchasing Trip Cancellation/Interruption Insurance for $5 per room (per night) allows customers to make changes or cancel their reservations due to unforeseen circumstances and get their non-refundable payment reimbursed.
Hotel rooms purchased through Priceline are not eligible for frequent traveler points, upgrades, vouchers, or other discounts and incentives.
Hotels can offer cheaper rates on Priceline than on any other booking channel through the Name Your Price program because the name of the hotel is not disclosed until after the customer books and accepts the terms and conditions. This avoids the “rate parity” that must exist across the other online travel agencies.

Hotel Direct

As you can see, hotels make their inventory available across a wide variety of booking channels in order to maximize their opportunities to sell rooms. But booking through online travel agencies takes a big bite out of hotel operators' pockets, as they must pay upwards of 25% of the price of the room to these 3^rd party sites.

Savvy hotel operators will try to drive customers to book through their own website or toll free reservations number where the costs are substantially lower (around 5%). Customers who understand how hotel profits work can take advantage of this by negotiating with the hotel directly. Using the example below you can see how booking directly through the hotel can be a win-win scenario for both the traveller and the hotel:

Example:

Customer wants to stay two nights in Vancouver and finds the lowest rate for the hotel on Kayak is listed at $150 per night.

If the customer books through the online travel agency they will be charged $300, the hotel will net $225 and the online travel agency will net $75.

Knowing this scenario, the customer calls the hotel direct, explains the rate they found on a 3^rd party website and asks if the hotel can beat that rate by $20 per night. Let's look at the math:

$130 rate x 2 nights = $260

Direct cost to hotel for booking through their own reservations system is 5% = $13

Net profit for hotel = $247

Net customer savings for booking through the hotel direct = $40

Hotel Rewards Program

Another benefit to booking through the hotel directly is to take advantage of their traveller rewards programs. Most hotels do not allow travellers to accumulate rewards points if they booked through a 3^rd party website.

Hotel rewards programs have become very lucrative over the years and often include perks like free upgrades, free nights, food & beverage credits, early check-in and late check-out.

The morning front desk routine often includes identifying rewards program members who are arriving that night and assigning them to the hotel's best available rooms. By joining the rewards program you will also receive special email offers that are otherwise unadvertised on other booking channels.

Shop Online, but Call Direct

Excellent deals and useful information on hotels can be found by searching online. Websites like TripAdvisor, Kayak, Priceline and individual hotel brand websites can play a key role in identifying a great place to stay. But the problem with shopping online is that you can't negotiate rates or communicate and confirm special needs with a website.

Taking the steps listed above will allow travellers to determine the hotel that suits their specific needs the best. And by understanding how hotel bookings work and by calling the hotel directly to negotiate and communicate their needs, travellers can save money and get the great experience that they are searching for.

The Complete Guide To Booking The Best Hotel Deals originally appeared on Canadian Finance Blog on May 17, 2011.