You might think that the power to compare travel prices online has created a buyer's market, since hotels and airlines must always jockey for your business with the best price. But that's an illusion.
Economics dictate that companies will do whatever they can to secure a profit, and so checking the Web for cheap airfare and vacation prices can be a process fraught with hidden pitfalls that aren't evident to you. Behind the scenes and under the hood, travel vendors have sneaky ways of making sure they still get the money they need to please shareholders despite the fact customers are always hunting for the lowest price.
I talked with Lauren Volcheff, a marketing exec for the company behind the Internet hotel discounter LastMinuteTravel.com, and she agreed to fill WalletPop readers in on a few tricks of the trade. Before you click "buy," know about these common mistakes people make when booking travel online:
Mistake #1: Performing the same search twice
You search for prices on a set of dates. You surf away for a few minutes to perform price comparisons elsewhere. When you come back and put your search back in, you find the price has jumped up.
That's because the reservations system remembers you. It knows you want that particular set of hotel nights or flights. Says Volcheff: "the website has the potential to remember who you are through cookies and potentially give you a higher price."
She adds, "We ourselves don't do that." But she confirms that she has heard of "some other players" doing this, particularly among flight sellers.
What's the workaround? Keep cleaning out the cookies from your web browser. Or, even better, have two or three browsers you like to use (Explorer, Firefox, Chrome, Safari, Opera, and so on), and when you search a second time, use a different browser, where there will be no record of your having just searched for the same arrangements.
Mistake #2: Always booking short stays.
It's simple: Travel sellers make more money the longer you stay. If you're always booking short stays, you could be marked as a low-yield customer, and the prices you are quoted could go up because of it.
Although Volcheff swears her company doesn't engage in this practice with independent customers such as you and me, she says it does happen on her "business-to-business" side, which means among travel agents and other groups who buy rooms at the wholesale rate and not consumers like you and me. So, in theory, a travel agent that always requests short stays for cheaper rooms could be penalizing itself down the road once the reservations system realized that cheap payouts is all it's good for.
Mistake #3: Always booking cheap hotels.
As with short stays, travel sellers make less money off inexpensive rooms. As with the short-stay mistake, the reservations system could potentially mark you as someone who won't make them much money unless the per-night fee that you're quoted is raised without your knowledge.
"When you think about how a travel company operates, or how any company operates, a transaction for a $25-a-night hotel costs us the same as a $100-a-night hotel, so I would see that as being a motivation," says Volcheff, who says it's another practice her company won't engage in with consumers."We prefer the $100 booking, but don't actually change the rate at all for cheaper hotels."
Mistake #4: Looking for hotel rooms further in advance than three months.
The recession has created a sweet spot for hotel room pricing.
"Wait until you're within that three-month period to start looking for hotel prices," advises Volcheff.
Why? "There seems to be this magic period of three months in which hotels hold onto hope that the economy's going to improve and [until then], they're not changing their rates much," says Volcheff. Once it becomes clear that the market is going to remain soft, hotel rates are brought down, and that usually happens around 90 days before check-in.
But don't wait too long, because the longer you wait to book, the more you might have to part with. Three months ahead is the sweet spot, she says.
Always read your hotel reservation's cancellation policy thoroughly before booking, because many of them will allow you to cancel with some notice (three to seven days is not unusual) without penalties. That way, you can hold onto a good price while you're searching for another.
Keep in mind, though, that some booking sites, including LastMinuteTravel.com, will levy a $25 a fee for canceling a reservation -- that penalty is separate from what the hotel property itself may or may not charge. Again, read the terms of your bookings before clicking "yes."
Car rental agencies, too, are ripe for this money-saving tactic, particularly because few of them require your credit card information until you actually pick up the vehicle. That allows you to hunt for the better deal and then cancel the reservations that didn't make the cut.
Mistake #5: Searching only for the exact number of hotel nights you need.
It seems counter-intuitive, but sometimes you should try searching for a night or two more. Volcheff says that's because "a lot of hotels will do promotions called 'pay stays,' which is a deal that allows customers who pay for two nights to get the third night free. If you only search for two nights, you're not going to see the third night could be free."
A third night wouldn't make a difference if the first two nights' prices didn't change, but in many of these promotions, the price will be lower for the first few nights if you agree to stay more. Then, although hotels frown upon it, you can simply not use the final, free night in order to secure the discount on the first few.
These deals are not usually listed on the search page, but when they're available, they're built into the system and will turn up in your search.
Something else popular among hotels right now is the "progressive discount." These encourage longer stays by offering increasing discounts for every additional night, such as 10% off two nights, 20% off stays of three nights, and so on -- and you won't know if those are hiding in the reservations system unless you perform a search that might trigger them.
Mistake #6: Believing the reviews.
Don't believe everything you read.
"There is so much user-generated content out there, and I personally believe a lot of it is created by the properties themselves," says Volcheff, who works in the industry every day.
Think about it: Most of the user-generated travel review sites have a dog in the fight. They make money when you book a hotel through them. So a positive review could create a direct financial benefit.
TripAdvisor.com, one of the most popular user-generated travel review sites in the world, is owned by Expedia, one of the 800-pound gorillas of travel booking.
Even if the booking sites themselves don't monkey with the results, there's almost nothing stopping a hotel from stuffing the ballot box with reviews that are cleverly written to disguise their true origins. The temptation to game the system is intense indeed, since a positive review may well result in increased bookings -- and negative reviews may help sink rivals.
Hotels.com, perhaps aware of the huge potential for corruption, stipulates that "only guests who have booked their room through Hotels.com may submit a review about that hotel."
I created a list of tips to use whenever you read a user-generated hotel review website. Check it out if you want to be extra-savvy when booking rooms.
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Six costly mistakes you can make on travel booking sites