Thursday, 29 August 2013

How do websites like Expedia,Fare Buzz and Priceline really work?

Websites like Expedia, Fare Buzz and Priceline are known collectively as online travel sites or agencies. They have changed the world of travel significantly over the last decade. Consumers now regularly check online before booking a hotel room or buying an airline ticket. This is because the prices are normally lower. The reason for this is how the online travel sites work.

Customer Search Forms

The main way consumers interact with online travel sites is through the initial customer search form. Each website has different options and specific gimmicks intended to create a unique experience. Customers start the process by selecting what services are needed such as a hotel room, airfare or a complete resort package. Some websites require specific search parameters while others allow for fuzzy searches with fewer restrictions.

Affiliate Databases

The customer search parameters are checked against a database of available rooms, flights or other services from the owners of the different airlines or hotels. Entries that match the customer search are displayed. Some online travel agencies actually maintain databases that have multiple entries for the same service. This means one set of search parameters could actually bring up different pricing options from another even though they are referencing the same room or package. The information in the database is supplied directly by the owners of the hotels or airlines.

Pricing Agreements

Online travel sites make specific agreements with hotels, resorts and airlines in order to get lower pricing. The website often receives a rate for the room that is between 50 percent and 70 percent of the price an average consumer would pay. The travel site then increases this discounted price by a certain amount in order to make a profit. The price the customer pays is lower than what is available directly through the service although it is higher than what the website is paying. The travel site pays the hotel or airline for the ticket after the consumer prepays. Certain travel websites even receive monthly commissions from large hotel chains.


Hotels and airlines agree to reduce the pricing for the travel websites because it draws in more business. The websites make it possible to rent rooms or sell tickets that might have gone unused otherwise. Another reason for the discounts is marketing and competition. Hotels and airlines that do not offer discounts through a travel site will be overlooked by many consumers. This causes some hotels and airlines to offer discounts that do not result in a profit just to market to customers.

Guarantees and Policies

An issue with some travel websites is the guarantee of service. Most searches do not guarantee every aspect of a room or ticket as it is shown. The details are usually determined by the actual hotel or airline and might be very different from what a consumer viewed online. The actual policies determining how these situations are handled vary widely between online travel sites and individual hotels or airlines.

Online travel sites have upset some people in the travel, hotel and airline industry. Some feel they are artificially lowering prices and creating undesirable demographic mixtures of guests. The websites are very popular, however, and continue to be used regularly by consumers despite some larger chains pulling out of the pricing agreements.

Aubrey is a writer for In her spare time when she’s not working, she spends time with family and friends.

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