Why Customers Shop Around: A Comparison of Hotel Room Rates and Availability across Booking Channels

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As hotel chains and their would-be guests confront the plethora of electronic distribution channels, they face a complex picture of rates and availability of hotel rooms. In an attempt to sort out which channels offer consistently low room rates, this study found that chains have made considerable progress in fulfilling a stated goal of offering lowest-cost last-room availability on their own websites, in competition with sites operated by third parties. However, a check of 137 possible booking dates in four different hotel segments also revealed that the third-party providers, notably Travelocity, still frequently offer the lowest rate. The old standby of telephoning the hotel for a booking yields the lowest rate less often than does booking on the website or with a third party. However, telephoning the hotel is the most accurate channel for ascertaining room availability. The chains' websites were reasonably good at ensuring room availability, while third-party providers, notably, Expedia, often showed rooms as unavailable at a given rate, when, in fact, the room was available through other channels. The findings demonstrate the relative consistency of the chains' own websites in offering customers the lowest rate (and thereby gaining the booking), but the fact remains that customers who shop around may find even lower rates. In terms of ensuring that customers repeatedly look to book a particular chain, what makes sense for hoteliers is to maintain consistent rates across all channels, so that price becomes less of a consideration in the booking decision.

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hotel rates; pricing strategies; online travel agents


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