Nottingham Nick wrote:I don't think it is a stupid question at all.
It is something I have wondered from time to time. It also applies to hotels. How come a room on the hotel website is $150 and Priceline can punt it out for less than $50?
Nick
I can explain this in a very roundabout way - hopefully my attempt to explain doesn't come across as patronising. ( I read my first draft and decided to add this caveat! )
Priceline, Expedia, lastminute.com, Superbreak etc. have marketing budgets that most hotels can only dream of, and market penetration (oooer missus) which many hotels simply don't have. Go into any travel agent in the UK, and there'll be a Superbreak brochure on the shelves. Superbreak, like Priceline is a trusted brand in the eyes of the public and amongst travel agents. Who has heard of Ten Manchester Street? (OK, so this is the wrong site to ask that question!) - but I'll wager a lot of people haven't. But it gets a listing in the Superbreak brochure. And a page on their website, AND in all the websites that Superbreak powers. In return, Superbreak get a simple to sell rate, and when they sign the contract each year, they'll probably get one or two rooms a night to sell, every night, all year. This simply means that Superbreak don't have to call the hotel to sell that room, and the hotel cannot sell that room to anyone else. Although overbooking occurs, but that's another story.
So, Ten Manchester Street is selling well, and decides to stop selling its special offers for a specific date, or sells out of all it's "Category A" rooms, or "Special Offer" rates. Superbreak still has that room at the price agreed back at the start of the year. It appears that Superbreak is cheaper than calling the hotel direct, however, its just a matter of timing. Superbreak hasn't sold that room yet. And now the price looks much more attractive. And Superbreak has access to 6000+ travel agents, untold thousands of web customers and more. Add in the marketing efforts of Lastminute.com, Expedia, Laterooms, Booking.com etc. and you get an idea of how important these websites can be to hotels, and why they often appear to be cheaper.
Some hotels, usually the smaller ones, will agree very heavily discounted rates, because they never be visible in the market on their own - so sometimes they will always be cheaper through 3rd parties.
