Why are hotels cheaper online

Book hotels on the internet : The false promises of the booking portals

Do you want to travel and are looking for a good but cheap hotel? That still has rooms available in August, despite the holidays? No problem. Because anyone who surfs the Internet can spontaneously start a short trip. For example to Munich: The hotel portal HRS charges 71 euros for a double room in the Ramada Hotel. This “hot deal”, as advertised by HRS, is the “guaranteed lowest price”.

So who needs a travel agency when the inexpensive offers are lurking on the internet anyway? And what if there are still helpful reviews from other users waiting online? Like Jörg's. He praises the friendly staff and the large room in Munich and is one of the 91 percent of visitors who would recommend the hotel to others.

The Bundeskartellamt is critical of the best price guarantees

So no problem? Are you kidding me? Are you serious when you say that. Because HRS doesn't offer the cheapest price at all. It is available from the American competitor Booking.com. The night there costs only 64 euros, and Booking promises a permanent best price guarantee.

A study by the German Institute for Service Quality (DISQ) completely contributes to the confusion. At the beginning of the year, DISQ found out: none of the ten bed brokers tested, including HRS and the market leader Booking.com, always and exclusively offers the cheapest rooms. The Bundeskartellamt is also critical of best price guarantees, but for reasons of competition. The hotels contractually agree to the portals not to offer their rooms cheaper anywhere else - even if guests ask for a room directly at the hotel reception. In this way, the portals can increase their prices and nobody is allowed to undercut them.

There are proceedings against Booking and Expedia

The Cartel Office spoke its first word of power back in 2013, when it banned HRS, which had a 30 percent market share at the time, from the best price clauses. In the meantime, the competition watchdogs have also warned Booking.com, which continues to offer the guarantees until the final decision has been made. If the portal does not remove the clauses, it too is threatened with a ban. Proceedings are also currently underway against the online travel agency Expedia.

Despite the ban on the best price guarantee, HRS continues to advertise its inexpensive offers. If the user discovers a cheaper room on another platform, HRS will reimburse the difference. For this, however, the cheaper offer must contain exactly the same conditions, i.e.: travel dates, room category, meals as well as payment and cancellation conditions. This is the beginning of an arduous comparison. “That requires a lot of research,” says Falk Murko from Stiftung Warentest. But that is usually necessary anyway. The market researchers from DISQ recommend a comparison on several platforms, according to the study. Because price differences of well over 20 percent are not uncommon with the portals - and the best price shown often cannot keep the promise. And the recommendations of the users cannot always be trusted, as a study by the University of Applied Sciences in Worms shows: 15 percent of the reviews are made by reputation management agencies on behalf of the hotels.

Metasearch engines should also be treated with caution

Test expert Murko knows how to get the cheapest room rates quickly and easily: “First you should look around the meta search engines to get an approximate overview of hotels and prices.” Meta search engines are platforms like Trivago and Discavo. They compare the offers of the relevant portals from HRS to Expedia with each other and save the consumer a lot of effort. But here, too, there are all kinds of things to consider. "Many hotel portals now show their prices without breakfast and free cancellation options in order to land at the top of the comparison platforms," ​​says Murko. "Users should really read the offers very carefully and then compare them."

It is not uncommon for different hotel portals to have different rooms and cancellation options. According to its own information, Trivago searches 270 hotel portals and compares offers for around 700,000 hotels worldwide.

Price guarantees are usually wrong

But even with the meta search engine, the best price cannot always be found, as the magazine “Reise undpreise” recently found out in a test. Accordingly, sites that compare a striking number of offers do not automatically offer the best rates. Another drawback: All meta search engines list the hotel offers preset according to "recommendation", "popularity" or "bestseller" and thus quite arbitrarily. The testers recommend checking back directly on the hotel's website before each booking. Because there is usually a better price because there is no commission to the portals and breakfast is often included in the price or the total price is cheaper. So it is said: "The real competition is often the hotels themselves."

Our test with various hotels in six major European cities also shows that price guarantees are usually wrong and that the best prices can wait at the hotels themselves. (see table). Despite the guarantees, the cheapest price was only found once on Booking.com, while the rooms at HRS were always more expensive than those of the competition. The meta search engines found the best price in four out of six cases; the hotel site was only cheaper in Paris and Barcelona. With a direct booking in the Spanish hotel you could save another ten percent compared to the price that Trivago had found. Compared to the offer from HRS, this is even a price saving of almost 100 euros.

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