Online (third-party) booking sites or intermediaries are proving an increasingly popular option among consumers when purchasing travel products, package holidays in particular. They allow consumers to compare different rates and deals on hotels, airlines and other services, thereby allowing them to make a more informed decision and get the best deal available for the same service or comparable service offers.
The beginning of each year is usually when people are starting to plan their holidays and proceed to making bookings, often using third-party websites, which act as an intermediary between consumers and service providers (e.g. airlines and hotels) and facilitate/accelerate the booking process while also sourcing the best deal available for a specific service, at the time of the booking or on that particular day.
These third-party booking websites are known under various names, such as: online travel agents, booking engines, booking platforms, booking intermediaries, travel portals, travel marketplaces, fare aggregators, metasearch engines, comparison websites, etc. and come in different forms while essentially filling in the same role as an intermediary between end-users (consumers) and source providers (the suppliers of the service) in all areas of hospitality services. Some of these websites are provided by web/tech companies, while others can be established travel companies or tour operators. They can be national, regional or global.
Some of the most popular online booking sites can be found in the travel and hospitality industry, particularly in the area of hotel and self-catering accommodation and are effectively a sales channel that delivers travel and accommodation products from independent suppliers to a wider domestic and global market in return for a commission payment.
Some of these entities have layered yet separate structures that allow them to operate an increasingly complex set of facilities and services involving multiple actors in the webspace. Below we look at the main type of digital entities operating in travel services.
ONLINE TRAVEL AGENTS (OTAs)
Online travel agents are the online equivalent of the traditional, high-street travel agent. They allow their users (customers) to search for travel services (flights, hotels, etc.), compare prices and then make a booking through their sites with the service provider that supplies the service.
These third-party booking engines have their own supply contracts with the service suppliers or travel product providers – i.e. hotels, B&Bs, villas and other self-catering accommodation, for example –, and therefore have reserved/secured inventory, from which they then distribute the supply to individual consumers making bookings on their web platforms. In very simple terms, OTAs sell travel products and services on behalf of suppliers/providers.
Most of the OTAs operate in a single area of business, such as flights, hotels and rental cars, but, increasingly, there are mixed travel products OTAs that can offer anything from holiday rentals (plus accessory services), cruises and experiential packages and events/activities. OTAs often offer bundles of travel services when the user books multiple services together. Some of the largest and best-known global OTAs are: Hotels.com, Expedia, Travelocity, Lastminute.com, Hostelworld, Agoda.com, Airbnb, Edreams.com, LateRooms and Booking.com, for instance. Some OTAs have merged while retaining both brands for a while, such as in the case of Expedia and HomeAway, which is a popular holiday house rental site that previously acquired Vrbo; once the latter two were incorporated into the Expedia Group, they merged into a single site, vrbo.com.
METASEARCH ENGINES (COMPARISON WEBSITES)
A more recent form of third-party platform is what they now call metasearch platforms, which aggregate data from the online travel agents above, as well as other third-party search engines and hotel websites. This creates another layer of search facility that allows the end-user (the consumer) to compare prices between hotel offers and online travel agents, which, in turn, aggregate and create offers in conjunction with their direct suppliers.
Metasearch engines first offered the facility to search travel offers and then simply directed the user to a third-party OTA (as above) or the actual service provider, such as an airline, so that the user could book their travel product. More recently, some metasearch engines offer the possibility to book directly through their websites. They also tend to operate in the same travel and hospitality sectors as the OTAs, i.e. flights, hotels/accommodation and car hire. Some of the biggest players currently are: Google Flights, Kayak, Skyscanner, HotelsCombined, for instance, which are in fact travel fare aggregators on which you can also book the travel products.
Confusingly perhaps for consumers, these metasearch facilities are not always independent but often created and owned by the online travel agents themselves. Some well-known platforms operating in this area are: Trivago is owned by Expedia; both Kayak and HotelsCombined are owned and operated by Booking Holdings Inc., which also owns OTAs such as Booking.com, Priceline, Agoda, Rentalcars, OpenTable, Momondo and Cheapflights among others.
Other types of online aggregators or travel offers that did not previously provide a booking facility have signed up with OTAs to refer their own users to the OTAs’ platforms. The well-known review site TripAdvisor, for instance, has signed a deal with Booking.com to allow customers to book rooms inventoried on Booking.com directly on the Tripadvisor site. This latest feature is called METABOOK, where you can place a booking directly on the metasearch website. You can see this on directferries.com, utoEurope.com or thetrainline.com, for example.
MULTI-MODAL SEARCH ENGINES
The most recent feature that is coming into its own in the last few years is the emergence of multimodal comparison websites. This can be an added service to existing OTAs and metasearch engines or a fully separate site that compares travel options and sometimes enables bookings. The latest player on the tech & travel scene is a technology solution that serves up search results showing and comparing travel options across multiple modes of transport: air, rail, road, maritime. Popular multi-modals include FromAtoB.com and Rome2rio.com, which integrate with OTAs and metasearch engines to enable bookings.
Finally, the latest and most powerful element of the new travel booking systems is the world’s biggest search engine itself. Bypassing all other forms of booking systems, which includes its own channel partners, Google aims to offer a quicker way to place bookings, which essentially begins on the first search page: Google Flights. More recently, Google introduced a hotel search product, which aims to add a booking facility and disrupt the now-classic online travel agency model that dominates the hospitality bookings landscape.
PROs and CONS of THIRD-PARTY WEBSITES
There are many consumer benefits to why using travel portals can generate the best user experience when deciding on travel offers and making reservations.
Choice: Third-party booking platforms fill a much-needed gap in global tourism by aggregating travel offers from all over the world, which permits tourists to make bookings with travel services suppliers they would not have otherwise found by simply searching on the internet. From flights and hotels to short-term rentals, cars and vacation packages, you can pretty much find any type of product that you want on an OTA.
Price: The main benefit is that consumers can get a smaller price overall as OTAs pass on savings from their bulk inventories. The value of metasearch engines lies in comparison shopping and find the cheapest or most advantageous deal.
Convenience: These portals are effectively a one-stop shop for all things travel. It’s a fast and seamless method to find information, check reviews, and place bookings for multiple travel services in one go: your can book your car rental, hotel and flights in a single reservation, often in instalments. In terms of communications, it is much easier to deal with a single point of contact when things go wrong rather than calling multiple service providers and trying to arrange a new itinerary or journey timeline. The portals also facilitate communications between consumers and suppliers on most common issues in relation to a booking, and they usually have a 24-hours customer service facility on multiple channels (as opposed to individual suppliers as most would not have the resources).
Security: Third-party portals offer high-spec online facilities that ensure the security of users’ data and the security of payments and transactions between consumers and suppliers. Often, travel portals are strictly digital players and web companies only, and their main USP is that they provide easy-to-navigates platforms and several layers of security when it comes to payments and privacy.
Trust: Social-proof user reviews have a major impact on why now travellers increasingly use OTAs. Being able to see verified and diverse reviews about individual services and compare providers is one of the cornerstone features of online shopping for both services and goods in 2021 and beyond.
Notwithstanding the many advantages above, travel portals can also cause considerable confusion if something goes wrong. Here are some of the problems consumers may encounter.
Price: Prospective tourists sometimes can be lured by attractive low prices on many third-party platforms. However, in some cases, as they proceed with completing the steps of the booking process, they become aware of supplemental charges and hidden fees that would make the collective booking more expensive than booking the services individually. Indeed some niche or smaller OTAs can often display clickbait behaviour or what is now known as “bait-and-switch fares” by advertising “steal” prices that will actually increase by the end of the booking process.
Customer Service: While centralised support for multiple services can be very convenient in normal times, in case of disruptions or cancellation of travel services, the situation can become very frustrating for consumers. When an unforeseen situation occurs, then it is best to deal with the travel suppliers directly, as changes can be made swiftly and these may not be immediately communicated to third-party intermediaries, which in turn must inform the travellers whose booking they facilitated.
Consumer Contracts: Many consumers who book through such websites are not certain as to whether their contract is directly with the booking site or with the service provider, leaving them unsure as to where to turn in the event of a problem. While the platforms
- provide the online space on which the services are collated
- host the process of booking the service with the service provider
- facilitate and process all payments
- intermediate communications between consumers and suppliers through and on the platform
- sometimes mediate disputes between consumers and suppliers
when consumers make a booking, their contract will usually be directly with the service provider and not with the booking website; while being the intermediary/facilitator of the contract and the transactions, the third-party website/ booking agent is not a party to the contract.
So here are the things you should be paying attention to when using online intermediaries for booking travel and hospitality services and packages:
Terms and Conditions: Due to the complexity of the contracts between suppliers and consumers, and the shared responsibilities and liabilities of the platforms and the suppliers when it comes to consumer rights and entitlements, it is advisable that consumers read the Terms and Conditions of the booking contract with the supplier as well as the Terms and Conditions of the booking site, too.
The Terms and Conditions of the third-party agent should clearly set out the exact nature of the contractual relationship and any additional information such as modification/cancellation procedures, which are with the supplier, but still performed via/on the booking site. Consumers should also ensure that they read the Terms of Service from the supplier of the service (actual provider, i.e. a hotel or similar), as these may place additional requirements on the booking – for example, an airline may request specific documentation from a passenger, but the booking site may not necessarily list it in their own Terms of Service. Conversely, added booking restrictions on the third-party platform makes the collective booking less flexible than the terms of the service of the individual suppliers.
Legal Jurisdiction: OTAs and booking engines operate both within and across multiple regulatory spaces (i.e. national legislation, European Union law) and it can be hard to pin down which or how many types of legislation apply to bookings made on their platforms. If you made a booking with a third-party website based outside of Ireland, and are in doubt about what legislation applies, you can forward an inquiry to the European Consumer Centre Ireland here.
It is also important to note that booking multiple services through a third-party website does not necessarily mean that you are covered by the package travel consumer law. Certain booking websites do offer consumers the option of booking a “package”, but this is subject to a strict definition and does not apply to separate travel or accommodation arrangements made for an individual consumer’s requirements, even if all such arrangements are processed through a single booking with the intermediary.
In order to qualify as a “package holiday”, the booking must consist of at least two of the following three elements – transport, accommodation, and additional tourist services (e.g. guided tours), provided that the package is pre-arranged and sold at an inclusive price, and lasts for at least 24 hours or includes an overnight stay. Where a third-party booking site offers “package holidays” (as per the legal definition), this should be clearly indicated in the Terms and Conditions, and consumers should verify whether or not it applies to their booking.
To make sure what type of reservation and holiday you are booking, read about the different types of holidays and accommodation bookings in our general consumer rights section or forward an inquiry to the European Consumer Centre Ireland here.
TIPS ON THIRD-PARTY BOOKINGS
Here are some useful tips for those looking to book a trip through a third-party booking website / online travel agent:
- Carefully research the third-party booking website. Always check for full contact details, a geographical address, and verify these with additional internet searches.
- Check the name and URL of the website in the browser address bar. ECC Ireland has received queries from consumers who understood they were booking directly with a service provider, only to subsequently realise that they had used a booking website that looked similar to that of the service provider. Some third-party sites rank more highly in search engines due to sponsored search results, so it is important to ensure you are on the actual website you’re looking for if you mean to book directly with the service provider and not the booking engine.
- It is always a good idea to check for negative feedback and/or reviews left by other consumers. If an online travel agent has a record of poor communications or consistently refuses refunds, perhaps you should look elsewhere.
- Read the Terms and Conditions of the service provider itself, as these will also apply to the booking made on the third-party website. Consumers may wish to pay particular attention to information on payment and cancellation rights. For instance, if booking accommodation, it is advisable to check if the rate is non-refundable or if there is a possibility to cancel.
- Be wary of any requests by a provider / actual supplier of the service to complete a reservation outside the booking platform of the third-party website. This is sometimes a sign of a potential scam and may leave consumers unprotected if something goes wrong.
Read the 2021 European Commission study on
car rental intermediaries here.
Dr Cyril Sullivan, Director of the European Consumer Centre in Ireland on the public to be conscious of intermediary websites when booking holidays online: “A growing number of sites facilitate bookings but do not have a working contract with the advertised brand name. Consumers should always read the Terms and Conditions options before committing payment, so that they know their legal rights.”
Listen to the advisory here:
A version of this article appeared in Consumer Choice Magazine in December 2021 here.