Hotel guests wasting millions on booking sites - report

HOTEL guests are paying hundreds of millions of pounds in commission fees to third-party booking websites for little in return, according to a new report.

Guests are being advised to make a direct booking. Picture: Getty

The Good Hotel Guide 2014 says guests who reserve rooms via online booking agents are often paying way over the odds because hotels have to pay 15 per cent plus VAT on their gross revenue for every booking.

The guide’s editors also claimed the hospitality industry’s increasing reliance on third-party websites was a principle cause of price inflation within the sector.

For smaller, independent hotels, commission fees increase costs at the expense of guests who are often unaware they can often get a better deal by booking directly via the hotel’s website or by phoning up.

About 40 per cent of travellers book through websites such as Booking.com, lastminute.com, Expedia and trivago, according to the guide.

Editors Adam Raphael and Desmond Balmer said the growing power of third-party agents stems from the fact internet search results often list them first, before a hotel’s own website.

Mr Raphael said: “Many hotels claim that they have to use booking agents to fill empty rooms, but few analyse whether they really bring additional guests or merely cream off revenue. Some hotels are now providing incentives for guests who book directly.

“Booking agents not only take commission fees, but often also impose expensive conditions. Promotional costs are rapidly increasing.

“They explain in part why the cost of staying in hotels in the UK remains stubbornly high, much higher than in other European countries.”

Mr Raphael added: “What are online agents doing to earn commissions which are almost double those of high street travel agents? Not enough in my opinion.

“Admittedly, they have slick computerised booking systems, their selected hotels feature at the top of search engine pages, and they are effective in selling rooms in certain types of big hotels such as chains.

“But for the sort of small, owner-managed hotels, they are a mixed blessing.”

A large number of hotels in Scotland, including those with an official five-star rating, specifically state on their websites that the best price available is achieved by booking direct.

A spokesman for the Federation of Small Businesses in Scotland said: “Obviously, the booking sites in question and very popular and we all use them, as the advantage is anybody generally searching for hotel availability on certain dates. These websites aggregate all the relevant businesses and display the best on offer during those dates.

“That said, what we know is businesses in the hospitality industry are finding it difficult to make a profit. Increased utility bills and electric bills are pushing up costs, and hotels are disproportionately reliant on those costs.

“Price comparison sites offer a valuable service, but we’d absolutely encourage calling up a hotel directly, especially if it is a smaller business, to see what’s on offer.”