It's easier than ever to find travel deals, and you can usually get the lowest price directly from the hotel or airline. This begs the question: are third party travel sites even worth it? Recently, Expedia enhanced their points program, which allows customers to earn travel rewards through them. They're not the first online travel agency (OTA) to offer something like this, so let's see how they stack up.
The Drawbacks of Booking Third Party
Points programs aside, there isn't really any benefit to booking travel through a site like Expedia. Travellers booked flights and hotels through these sites back in the day because their prices seemed to be so much cheaper. But now, you can get the same deal, if not a better one, booking directly with an airline or hotel.
I looked up a round trip flight on Google Flights and Travelocity, for example, and the price is exactly the same if you were to book it directly through the airline. I looked up the same flight on Expedia and Orbitz, too, with the same results. While these sites say you can get a better deal if you combine your flight and hotel, most hotels come with a "Best Rate Guarantee," meaning if you can find a cheaper deal online, just give them a call and they will match it.
Plus, you also get better customer service if you book directly through the hotel. I once checked into a hotel I booked using a travel app, and the hotel manager joked, "You booked on HotelTonight? We're going to give you the worst room." I asked if hotels actually did that. He said, "We prefer when you book directly through us. Some places will give you better service." Here's what one hotel insider admitted over at Consumerist:
My hotel doesn't maliciously put third-party internet guests into our smallest rooms, but when occupancy climbs, we're forced into it. Perhaps you won't receive the best rooms if you book directly, but at least you won't be earmarked during the arrivals process for the less desirable rooms.
When you book directly with the company, you're also more likely to get help if something goes awry. Hotel manager Jennifer Goodwin explains why this happens:
On the off chance that something happens and you're just not happy with the stay, it's also faster and easier for the hotel to take care of it for you. Say I wanted to give you 20% off, if you already payed through the third party, we have to contact them, they have to process it through their system; it's a lot more convoluted process to book it through somebody else than to just do it right through us.
That goes for flights, too. If you have a delay or a cancellation, it will be harder to deal with the airline if your ticket was purchased through another company. Plus, if you need to make a change to your reservation, many OTAs will charge you a fee on top of the fee the airline charges.
What Third Party Rewards Look Like
Customers already know about the drawbacks, it seems, as fewer people are booking travel through these sites. As a response, many of these sites now offer rewards programs to bring back these customers.
Keep in mind, though, many hotels and hotel-branded credit cards have their own rewards programs and you can only earn points if you book directly through the hotel. So if you want to use any of these third party rewards, you'll have to choose between their program or the hotel's rewards program. Let's take a look a few of these third-party programs to see if they're worth it.
Expedia's rewards program comes in three tiers: blue, silver, and gold. While silver and gold will give you certain extra perks (like a free drink at some hotels), here's the basic points structure for all three levels:
- 1 point per $5 spent on airlines (and you can still use your frequent flyer miles)
- 2 points per $US1 ($1) spent on hotels, packages with a hotel, cars, activities, and cruises
If you book at one of their VIP+ access hotels, you'll get bonus points, too. It all sounds great, but points don't really mean anything. The big question is, how many points do you need to book free travel? That's where it gets tricky.
Expedia has a different redemption process for flights and hotels. With flights, you must have enough rewards points to cover the full cost of the flight, and The Points Guy says you get about 1 cent ($0.01) per point. So a $US250 flight will cost you 25,000 points.
On the other hand, you can start redeeming for hotels at just 3500 points. Here's a basic rundown, according to travel hacker and personal finance writer Holly Johnson:
- 3500 points: S25 coupon
- 7000 points: $50 coupon
- 14,000 points: $100 coupon
- 21,000 points: $150 coupon
You still have to spend thousands before scoring a $25 discount, which isn't much. It's hard to put a monetary value on Expedia's points since they vary depending on the type of travel, but going by the 2 points per dollar spent on hotels, that's about $0.01 per dollar spent, even less for flights.
That seems low, but it's pretty comparable to most hotel rewards programs. It's all very confusing, but the bottom line is it will take you forever to earn a free flight, so if you're going to use Expedia's program, you're probably better off redeeming for hotels.
Here's the deal, though: your hotel might be more expensive if you book through the site, too. I looked at a three-night stay at a NYC hotel. The total directly through the hotel was $US788 ($1,022). Through Expedia? $US1 ($1),019. Based on my research, unless it's one of Expedia's VIP hotels, you'll pay quite a bit more per night, which sort of negates the value of both earning and redeeming rewards.
When you book through the Orbitz rewards program, you earn "Orbucks." Here's what you earn:
- 5% back on hotels booked through their mobile app
- 3% back on hotels booked a computer
- 1% back on flights
Thankfully, Orbitz makes the redemption maths pretty easy: one Orbuck equals $1. For hotels, that's a value of five cents per dollar spent, a pretty good option compared to other hotel loyalty programs.
Just like Expedia, though, hotel prices seem to be more expensive (unless it's a hotel that's teamed with Orbitz to offer some kind of daily deal). Orbucks offer a decent value, but it's not really worth it if the hotel costs more to begin with. You're basically spending a lot more money to get a little bit of cash back, which doesn't really make any sense.
Hotels.com's Welcome Rewards
Thankfully, Hotels.com's rewards program is a little simpler. For every 10 nights booked through them, you get a free night. It's sort of like a punch card you might get at your local coffee shop. The value of the free night is equivalent to the average nightly rate you paid for those 10 qualifying hotels. If the hotel you want to book is more expensive than your average rate, you just pay the difference.
Membership in their rewards program also includes access to "Secret Prices." This is a pretty vague perk, though. Here's how Hotels.com explains it:
Even lower than our special rate promotions, Secret Prices are discounts applied on top of current hotel deals or, when there is no current hotel deal, standard prices. How deep a discount you receive depends on your chosen dates, your destination, and your selected hotel.
That doesn't really tell you much, but in general, Hotels.com's prices are still as expensive as any other OTA. Again, unless it's one of the site's featured hotels, the price is probably better if you book directly through the hotel.
The bottom line? I probably won't sign up for these myself anytime soon. While some of them come with extra perks that sound kind of fun (free drinks, potential room upgrades for gold members), it just takes too much money or time to reach any kind of discount. Plus, there are still those drawbacks to consider - are the perks worth it if I'm going to get worse service from the airline or the hotel? If you're willing to invest the time and research, though, or if you use the sites anyway, the rewards might be worthwhile.
Expedia+ and Orbitz Rewards might be more worthwhile for flight purchases. After all, you can still earn rewards and frequent flyer miles, so why not double dip? For hotels, it's probably not worth it unless you're keen on sticking to "VIP" hotels that already have a deal with the sites, and in that case, Hotels.com seems to offer the best deal. In short, these are worth looking into if you're always on the hunt for a deal, but for the rest of us, there are quicker, more lucrative ways to save money on travel.