The great booking debate: Is direct better than a third-party site?

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Is it better to book your next trip directly with a travel company or turn to an online agency promising a good deal? As the popularity of online travel planning grows, the question can elicit strong opinions on either side.

Kathy Lopez, an author from Prescott, Ariz., prefers the direct approach, saying it allows her to cut out the middleman for her airline tickets. That means the carrier contacts her when there’s a schedule change. She says working with an intermediary can result in miscommunication — and even a missed flight.

For hotels, she finds that she’s treated like royalty with a direct booking. “I get perks of a top-tier member in loyalty programs, even if I’m not a top-tier loyalty program member,” Lopez says.

But other travelers feel differently. Mark Beales, a retired mortgage banker from Mill Creek, Wash., booked directly for years. But he recently had a problem with a car rental company in Ireland, which made him see the appeal of a third party.

“They wanted me to pay in dollars at a terrible exchange rate,” he recalls. “Appeals to the corporate office went nowhere.”

Beales wonders what would have happened if he had worked with an online travel agency that may have been able to negotiate a better deal for him. Would he have saved himself a lot of trouble by booking through Expedia or Booking.com?

Online travel agencies are in growth mode after a pandemic pause. According to the Business Research Company, the global online travel market is projected to grow from about $461 billion to about $972 billion between 2020 and 2025.

J.D. Power’s latest analysis suggests that travelers who book a hotel directly get slightly better customer service, with an overall satisfaction score of 838 out of a possible 1,000 points vs. 821, according to the company. They also get more bang for their buck, with an 808 in their “value for money score” for direct booking, compared with 793 points.

“Year after year, our research shows that guests who book directly with a hotel chain have a better overall experience,” says Andrea Stokes, who heads J.D. Power’s hospitality practice. It’s a sentiment broadly shared across other industry sectors, such as airlines and car rentals.

So why does direct booking have a small edge in customer satisfaction? That’s a question more travelers will be asking in the weeks ahead, as they plan spring break trips and start to consider summer vacation plans. To find out, you have to understand the differences between a direct and an online agency booking, and how travel companies will try to entice you to skip the middleman.

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What is a direct booking?

A direct booking means you’re making arrangements without the help of a travel agent or third-party booking company. You’re reserving airline tickets, hotel rooms or rental cars by contacting the business directly, which could be online, through its mobile app or by phone.

A direct booking can be significantly faster, because you don’t have to rely on a third party to complete it. Travel companies claim a direct booking is safer, because you only share your credit card information and other details with one party.

What is an agency or online booking?

A third-party booking means you’re letting someone else make the reservation on your behalf.

You work with a travel agency, adviser or — most common these days — automated platform, such as Expedia or Booking.com, to reserve your flight, hotel room or rental car. In the context of comparing a direct booking to a third-party booking, most people are referring to an online platform.

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What are the benefits of a direct booking?

Travel companies may offer incentives for customers to buy directly from them, including lower prices, extra loyalty points, special offers and other perks.

For example, at the Carlton Tel Aviv Hotel, guests who book directly can also get a taxi ride to the airport at no extra charge, a $40 value. If your direct booking is for more than three nights, the hotel will sometimes throw in a complimentary 45-minute massage and a room upgrade. “By means of a direct booking, we can build and nurture a strong relationship,” says Adi Uzan, the hotel’s sales and marketing director.

Guests at the Eastern Slope Inn in New Hampshire who book their reservation on the hotel’s website have access to the best rooms in the house, says Megan Scheid, the resort’s vice president of hospitality. “They also have access to last-room availability,” Scheid says. “We shut off the online travel agencies long before we sell out.” The Eastern Slope also offers a 10 percent discount on future bookings if guests buy directly with the hotel.

CitizenM, a hotel chain that caters to young companies and knowledge workers, offers discounts and perks through its free and paid membership programs. Special events for members include networking sessions or presentations from experts, such as a talk that CitizenM Miami Brickell will host with venture capital investor Jason Calacanis on Jan. 25.

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It’s not just hotels. At Seattle Ballooning, owner Eliav Cohen says he can take better care of his customers, because he can see all the details in their reservations and has direct contact with them.

“If guests use a third-party site, they typically have to go through them to make any changes, since they have different rules,” he says. “The process takes much longer, there are long hold times, and often ends up with frustrated guests.”

Cohen says that, in 2023, he plans to stop working with online travel agencies and accept only direct bookings.

Lastly, booking directly may help support a small business.

“Travelers may not know that third-party sites take up to 40 percent commission,” says Leanne Turner, chief operating officer of the hotel consulting company Alo Index. “Big hotel brands have the leverage to negotiate this percentage down, but independent hotels struggle to balance the wide distribution of a third-party booking site with losing nearly half the room revenue to commission.”

What are the benefits of booking online?

Should you stop using third-party websites to book flights, hotels and rental cars? Not necessarily.

Travel companies may treat you better when you book directly — of course they will if they’re saving a 40 percent commission — but there’s also a bigger picture.

Online agencies are an essential part of the travel ecosystem, because they allow easy price comparisons across a range of businesses. Some may also have access to deals you won’t find by booking directly.

So if you’re looking for a beachfront hotel in Tel Aviv, it’ll show you the Carlton — and the Savoy and the Dan — and it will let you compare prices. Without an online agency, you’d have to go to each hotel’s website and run a search, which might test your patience.

Online agencies have also upped their game with improved security, ensuring that your data is safe.

But the most significant benefit may be that, if something goes wrong, you’ll have a third party to help you fix your problem. (At the same time, the agency controls your booking, which may create its own challenges.)

“One of the most enduring and universal principles of hospitality is that guests should always be treated exactly the same, regardless of how they booked or who they are,” says Tim Hentschel, CEO of HotelPlanner, an online agency that specializes in group hotel bookings. “Of course, some guests have more unique needs and requests than others, such as celebrities or elected officials with entourages. But generally speaking, hotels should treat all guests equally, regardless of how they booked their stay.”

Even Lopez, the author who prefers direct bookings, says she sometimes uses an online agency.

“When I book an international trip, I use Booking.com, because I don’t stay in chain hotels,” she says, “so sometimes I need the power of an intermediary if I have an issue.”

She says Booking.com has helped her negotiate refunds on bad hotel stays that she booked abroad. Had she made the booking directly, she says, the hotel would probably have just ignored her.

Because online travel agencies have millions of customers, they can negotiate discounts that ordinary travelers can’t find on their own. And they can create dynamic packages — airline tickets, hotel rooms, car rentals — that can save you lots of money.

Take the online agency out of the equation, and everyone must pay retail, which is not good for customers.

Bottom line: It’s best to mix and match

The best strategy is to keep an open mind about booking. Run a price comparison on your favorite online travel agency. Then check if your airline, hotel or car rental agency can offer you a better deal by booking directly.

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