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How does Hotel Price Comparison work

How does Hotel Price Comparison work?

There are several types of hotel price comparison tools using the same principle – compare accommodation rates within various online channels. The most popular online channels are the hotel website and OTAs (online travel agencies, such as Booking.com, Expedia, Hotels.com, Agoda or others).

You can see Price Comparison tools in two main formats: 

  • The first type is commonly known as metasearch or aggregators. These are: Kayak, Tripadvisor, Google Hotel, Skyscanner, and others. You can find a full list here.
  • The second type is the Hotel Price Comparison Widgets. Widgets typically can be seen on hotels’ websites. We mainly will speak about this tool in this article.

Why Price Comparison is useful?

It allows guests to get more information about prices in a shorter time. With price comparison tools guests don’t need to browse different OTAs, and then check the hotel website for a direct offer. Therefore, hotel widgets and metasearches sites show prices in easy-to-compare format and help to select the best dial faster.

In short, price comparison helps you choose and book the room faster and at the best price.

What is the technology behind Hotel Price Comparisons?

  1. First, guests search room availability and prices on a hotel website. 
  2. Then, the price comparison tool reads the search (dates, number of guests). 
  3. On the next step, it automatically sends the request to OTAs.
  4. After that, the price comparison tool gets prices from OTAs
  5. Once price comparison is done, a widget appears to the visitor. 
The scheme shows how does a Hotel Price Comparison work? Price comparison send requests to OTAs and receives prices and availability back

For instance, in 123compare.me we send many inquiries at once, get a reply from OTAs and show the widget in 2-7 seconds. 

In short, the prices we display in the widget are:

  • Collected in real-time.
  • Personalized for your request.
  • Public prices. No discounts for loyalty/membership programs are used.
  • Most important, they are real. If you see them, it means OTAs show them.

Can the prices in the Price Comparison widget be wrong?

Yes and no.

No – since there is no human interaction in the process. We do not change prices in any way. The widget shows the same price that is shown on OTA.

But yes. Sometimes it happens. Very rare. Some OTAs play with prices and might update prices without hotel consent. For example, an online platform might use “geo” rates, changing prices depending on guest search location. So, prices from your location might be different from prices for the page visitor from New York or Bangkok. As a result, you may find, on occasion, that certain prices are not correct for your location.

What are the advantages of Price Comparison widgets over Metasearches?

First, you don’t need to go to a special site to do the search. You can see the rate comparison widget while browsing the hotel website.

What is more, travel partners (hotels, travel agencies) send prices to metasearches. However, metasearches don’t check the accuracy of this information. Therefore, they can not ensure that the displayed prices are correct or include all taxes and fees.

On the other side, 123compare.me collects prices independently. We check the prices ourselves and we can guarantee that the prices we collected are real.

Last, but not least, some metasearches, including Google Hotel, uses “pay per click” prioritization models. It means hotels who pay more are displayed higher in the ranking. This ranking is definitely not in the booker’s best interests.

Why hotels use Price Comparison Widgets?

We explored how does Hotel Price Comparison work? However, what is more important – why hotels use it and why it is good for guests.

For each booking made through partners (OTAs), hotels pay them a commission. Commission to OTAs usually varies from 10-25%% per booking. It decreases hotels’ profitability a lot and hotels want to avoid it.

For quite a long period, OTAs have an opportunity to undercut hotel prices and offer better deals for the guest. Not any more. Nowadays, hotels pay a lot of attention to ensure that they offer the best price on the direct website.

In many cases, the hotel will not only guarantee the best rate but, as well, will offer additional perks to the direct booker – a better cancelation policy or free late check-out.

Price comparison widget is a way to communicate the advantages of direct booking. It helps hotels to be more transparent with guests. It helps guests to save time on internet browsing and get the best deal.