Online deals still cheaper than direct booking, study finds


Online travel companies are continuing to undercut hotels on their room prices, according to a study. The survey by KPMG found 58% of the cheapest room rates in the UK were available from online firms, when compared with the price quoted by hotels direct for the same room.

While hotels much preferred customers to book direct, they often failed to manage their own inventories properly, so leading to a lack of pricing control, KPMG said.Online bookings were growing in popularity, with 14% of room bookings in the USA generated from the internet last year, and predicted to grow to more than 24% by 2006.

Nick Pattie, director of hotels at KPMG’s travel, leisure and tourism practice, said: “The ultimate goal for hotels is to encourage customers to book direct. In practice, this is proving difficult as third parties offer cheaper quotes.’Customers will therefore continue to use these indirect channels until they are confident that hotels’ best-price guarantees deliver what they promise.’

The Global Hotel Distribution Survey 2004 researched room rates from more than 310 hotels in 13 countries. Only 2% of hotels showed consistent pricing across all direct and indirect booking methods, and only 15% of prices were consistent when booking direct.

The US hotel industry had the greatest control over pricing in terms of consistency and price differences, with just more than 10% of prices cheaper through online agents’ sites.The internet was most likely to offer the best deals when travelling across the UK, Western Europe or Canada, because of fierce competition from operators such as Expedia, Travelocity and

Some chains, such as Hilton, were resorting to lowest-price guarantees to regain the initiative, added Pattie.

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