Why Online Travel Agencies Charge High Fees and How to Stop It

In the early days, we used to book though online travel agencies like Expedia and Travelocity only because their prices seemed to be cheaper. But nowadays, do they really set a fair price? To answer that question, we should first understand how does online travel industries set up their commission.

HOW DOES ONLINE TRAVEL AGENCIES SET UP THEIR COMMISSIONS?

Booking platforms establish their commission based on page views, if the page views rate increases, also the commission. On December 2017, booking.com commission started at 15%, months later the page view rate increased 19%, charging up to 17.4% in commission. In 2016, digital travel sales in the United States amounted to 180.6 billion US dollars, by 2020 the forecast is to exceed 213 billion US dollars. How much more do the online travel industries will charge in commissions?

Even right now, booking directly through the hotel might be cheaper than booking through Expedia.

“I looked at a three-night stay at a NYC hotel. The total directly through the hotel was $788. Through Expedia? $1,019”.
But here is the deal, even if the price is the same, booking through online travel industries make the hotels lose a lot of money in commission. So, you may ask, why do they keep promoting themselves in booking platforms? Most of their income comes from online travel agencies, only because they run the booking industry.

A clear example is, if you find yourself navigating through the search engine and type the name of the hotel you want to stay, chances are that an OTA website appears over the hotel official website. So, even before you become aware of the hotel official website, you already booked through an OTAs platform.

HOW TO STOP IT?

We present to you TravelBlock, the first decentralized booking platform, if you didn’t read our preview post, here is a overlook of how TravelBlock platform will work.

In our Platform we offer you the price you deserve… a fair price. Let’s stop giving the power to the online travel industries, which only keep increasing their commission because of their popularity. #WeWantFairRates