Planning a dream vacation but shocked by high hotel prices when you try to book directly with the property? You’re not alone. Savvy travelers have long relied on sites like Expedia to unlock savings not available by booking direct.
In short: Expedia can leverage its size, technology, and negotiated contracts to secure lower rates that beat booking direct. But how exactly does it work? Read on as we reveal Expedia’s pricing strategy and tips to find the best deals.
Expedia’s Contracts and Buying Power
One of the reasons why Expedia can offer cheaper hotel rates than booking directly is because of its contracts and buying power. Expedia has established partnerships and contracts with thousands of hotels around the world, giving them access to a vast inventory of rooms at discounted rates.
Expedia benefits from volume-based discounts, which means that the more rooms they book with a particular hotel, the lower the rates they can negotiate. This allows them to offer customers lower prices than if they were booking directly with the hotel.
Hotels are willing to offer these discounts to Expedia because it guarantees a high volume of bookings, which helps them fill empty rooms and generate revenue.
Negotiated net rates
In addition to volume-based discounts, Expedia also negotiates net rates with hotels. Net rates are special rates that are offered exclusively to travel agencies and online booking platforms like Expedia. These rates are often lower than the rates offered to the general public.
Expedia is able to secure these negotiated net rates because of their buying power and the large number of bookings they generate for hotels.
Exclusive promotional rates
Expedia also offers exclusive promotional rates to its customers. These rates are often lower than the rates offered by hotels directly. Expedia negotiates these deals with hotels to provide customers with special discounts and incentives to book through their platform.
These exclusive promotional rates can be a great way for travelers to save money on their hotel bookings.
It is important to note that while Expedia may offer cheaper rates than booking directly with a hotel, there are certain advantages to booking directly as well. Direct bookings may come with additional perks such as loyalty program benefits or the ability to earn hotel rewards points.
It is always a good idea to compare prices and consider all factors before making a hotel reservation.
- Forbes – How Online Travel Agencies (OTA) Work
- Lodging Magazine – What Hotels Need to Know About OTAs
How Expedia Makes Money
Expedia, one of the largest online travel agencies in the world, generates revenue through various channels. Here are the main ways in which Expedia makes money:
Commissions from hotels
Expedia earns a significant portion of its revenue through commissions from hotels. When customers book a hotel through Expedia’s platform, the company receives a commission from the hotel for facilitating the booking.
This commission can vary depending on the agreement between Expedia and the hotel, but it is typically a percentage of the booking value. Expedia’s extensive network of hotels allows them to negotiate competitive commission rates, which helps to keep their prices lower than booking directly with the hotel.
Targeted advertising fees
Another source of revenue for Expedia is targeted advertising fees. Expedia offers hotels the opportunity to advertise their properties on their platform, reaching millions of travelers worldwide. Hotels pay Expedia for this advertising exposure, as it helps them attract more guests.
Expedia’s vast customer base and advanced targeting capabilities ensure that hotels can reach the right audience, maximizing their return on investment. These advertising fees contribute to Expedia’s overall revenue stream.
Upsells and packages
Expedia also generates revenue through upsells and packages. When customers book a hotel, Expedia offers additional services or upgrades, such as car rentals, airport transfers, or travel insurance. These add-ons provide convenience and value to travelers, and Expedia earns a commission on each upsell.
Additionally, Expedia creates attractive vacation packages that include flights, hotels, and activities bundled together. By offering these bundled packages, Expedia can negotiate better rates with suppliers, passing the savings on to customers while still earning a profit.
Tips to Get the Lowest Rate on Expedia
Compare across booking sites
When searching for the lowest hotel rates on Expedia, it’s important to compare prices across multiple booking sites. While Expedia is known for its competitive prices, it’s always a good idea to check other platforms like Booking.com or Hotels.com to see if there are any better deals available.
By doing so, you can ensure that you’re getting the best possible rate for your desired hotel.
Use Expedia rewards program
Expedia offers a rewards program called Expedia Rewards, which allows users to earn points on their bookings. These points can then be redeemed for discounts on future hotel stays. By taking advantage of this program, you can save even more money on your bookings.
Plus, members of the rewards program often have access to exclusive deals and promotions, giving you even more opportunities to score a great deal on Expedia.
Look for coupon codes
Before finalizing your booking on Expedia, be sure to search for coupon codes that can be applied to your reservation. Websites like RetailMeNot or Coupons.com often have codes available for discounts on hotel bookings.
Simply enter the code at checkout to enjoy additional savings on your Expedia reservation.
Be flexible with dates
If you have some flexibility with your travel dates, try adjusting them slightly to see if you can find a better rate. Sometimes, shifting your stay by a day or two can result in significant savings. Expedia’s flexible date search feature makes it easy to see if adjusting your travel dates can lower the cost of your hotel stay.
Check alternate accommodation types
While hotels are a popular choice for travelers, Expedia also offers a variety of alternative accommodation types such as vacation rentals and hostels. These options can often be more affordable than traditional hotels, especially if you’re traveling with a group or looking for a budget-friendly option.
Be sure to explore all the different types of accommodations available on Expedia to find the best deal for your needs.
With its technology, negotiating leverage, and focus on converting bookings, Expedia can secure exclusive deals that beat booking direct. While pricing varies, using strategies like rewards programs and flexible dates can help you unlock real savings.
Understanding Expedia’s model takes the mystery out of scoring cheap hotel rates. Now you can book with confidence and keep more cash for adventures on your next trip!