Hotel booking: Why is Agoda much cheaper than booking.com?
- By
- Aparna Patel
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- 23 Jul, 2023
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From what I have deduced, you are not getting the same room class as other sites. You will get the least desirable room on the property. It will technically be a room in the hotel but it will be the room next to the kitchen with smells or a room that is known to have plumbing issues or something broken, stuck door, worse view, next to the elevator shaft, a room that has been taken off the rotation so that maintenance department can fix something , so this room will not be available on the hotels own booking site or more expensive sites but you will be able to get it on Agoda. You get what you pay for. Markets are efficient. There is not some glitch or a secret deal where you are getting the exact same room in all aspects to the guest in the next room but somehow paying dramatically less. In cases where this is almost the case, you will then not get the complimentary drink on arrival or complimentary early check in or late checkout. I use Agoda when none of these things matter to me, like when traveling alone but I would not use it if you are wanting to ensure that your traveling companion is comfortable as well.
I run an Australian whitelabel booking site (Beat That Flight) that’s mainly for flights, but also has hotels.
What’s interesting when I look around at other sites is how much it varies.
While others have mentioned the illusion of choice with self-competing and merchant/agency, it’s also worth noting that for many sites, we have different data sources for prices (I use a Russian data source!) and between us and the airline or hotel, there may be several layers of companies. These each might have their own promotions, group discounts, bulk purchase, loss leaders or commission rates that affect the final price shown to the consumer.
Similarly for hotels. However personally, I always try to check the hotel site directly – you often get a better deal if booking directly, and are more likely to be upgraded / have breakfast included / some other benefit in my experience when doing so.
Booking.com uses the Agency model, this means the website is a place where hotels list their offers and booking.com gets a commission with every booking done through their website.
On the other hand, Agoda uses the Merchant model in addition to the Agency model, meaning that in some cases they actually buy the hotel rooms from the hotels directly (in bulk), then offer them at a competitive price. I think they do that a lot with Asian Hotels.
That’s why sometimes Agoda is cheaper, other than that it’s just a psychological effect because they show prices per night and tax-exclusive, which gives the impression that their prices are less.
One more thing, Booking Holdings (the company that owns both Booking.com and Agoda) is doing a great job, they are doing a business trick where people think that both sites are major players which are competing with each other, so customers think they must choose between one of them, whatever customers choose the company earns money. This is called “self-competition” in the business world. It’s also called “The Illusion of Choice” (thanks to @RyanfaeScotland for pointing that out).
- Host telling me to cancel my booking in exchange for a discount?
- How do you know if a Japanese person means no when they say yes?
Credit:stackoverflow.com‘
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