Insider Tip - Call the hotel directly

While most customers planning to book a hotel room, head straight to the hotel website or a third party booking site, the most recommended option is to call the property directly. But before you do so, do your own research and make a note of the lowest web price option and the website offering it.

Let's say you found that Booking.com is offering a $90 rate for a queen bed at the Colonial Inn motel in Nags Head, NC. With this information, call the property and ask them their rate for the same dates. Remember to get the actual property phone number and not their toll free reservation number. You don't want to speak to an agent, you want tot talk directly to the property front desk.

Once you call, they most likely will quote a higher rate of $105 (rack rate) for the same room. Now, inform the front office that you saw a $90 rate on booking.com and that you'd like a lower rate. Most importantly, tell them that if they offered you a $85 rate, then you are willing to pay them the $85 with a no refund option immediately.

Hmm, so what are we doing here to make your $85 offer tempting? First, remember that hotels pay a booking commission between 15-18% to OTA's (Online Travel Agency - sites like Booking.com, Expedia etc). So, offering you the same $90 rate of the OTA isn't difficult and the hotel will try to "price-match" and offer you the same rate. But, in most cases, the "NON REFUNDABLE" & "Charge my card NOW" words are usually very tempting to hotel reservation staff. So, you end up with a good chance that they agree to your $85 rate. And if they do, you've got a room a cheaper than the online rate. A $105 room is now yours for $85.

Q & A's

Why do hotels charge a higher rate than OTA's

Before the arrival of online travel agencies, hotels were dealing with low occupancy levels during week-days and an overall slowdown due to increasing local competition. What complicated things more, was that, many hotel owners were pretty clueless about targeted online marketing, social media marketing etc. Their typical customer was someone who was a walk-in or a guest who called and made a reservation. As competition increased, hotels were left with more empty rooms and profit margins were falling. Hotel profits were getting lower considering the high costs involved with maintaining a large commercial property.

Well, that changed. This scenario motivated some travel agencies who saw this as a great opportunity. They created OTA websites like Booking.com, Expedia.com, Hotels.com etc to encourage people to book hotels online. They approached hotel owners and offered them the option to fill in unoccupied rooms. Hotel owners were happy and agreed to offer a lower than rack rate to these OTA's. Well, if the hotel offered the same rate as the OTA, then all these companies would become meaningless. >So, the OTA's and the hotel owners struck a deal. To make an OTA rate more attractive, the hotels allowed them to price the rooms at lower rates. This was done to boost room sales. It didn't matter much if a 40 room hotel offered 10 rooms for a bit less. Plus, the hotel gets an opportunity to get most or all rooms sold out.

It's funny, but most people don't realize the fact that it is the hotel which sets the rate for OTA's and not the travel agency. So, when you see a lower rate, it's because the hotel has unsold rooms which it offered to the OTA's to sell for less.

Tip Summary

• Research the lowest online rate
• Before calling the hotel, note down the price and referring website
• Mention "can you price-match?", "instant non-refundable payment"
• If you're staying for 2 nights or more, let them know -- it helps!
• Be courteous throughout the conversation - do not demand -- "Request" -- it's always a better option

Tip Caution

• Hotels may be unwilling to lower rates during peak-season. For example, the Outer Banks hotels get extremely busy during the summer months and especially during the weekends. They may be more inclined to lower your rate for the weekdays rather than on weekends.