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Alternative Travel: Discount Hotels And More Online

Author: Andrew Harris

By New York State Law, a hotel includes traditional hotels, motels, inns, B&B's and apartment hotels. The hotel industry has witnessed a 10% increase in revenues over 2012 to $163 billion in 2013. Due to an influx of technology startups and internet based travel websites, a large percentage of industry bookings do not originate from the hotels themselves. Moreover, a variety of tech companies such as Airbnb, VRBO, HomeAway, and Travelmob, travelers provide a comparable alternative to the hotel experience.

Likewise, internet based travel companies such as Expedia (EXPE) and Priceline (PCLN) provide travelers services such as airline tickets, car rentals and hotel reservations below retail prices. Due to contractual agreements with a number of hotel brands, Expedia and Priceline are able to offer travel reservations below retail value. With the growth of digital technology and an immense amount of information at our fingertips, full price hotels are becoming a thing of the past.

Expedia

As the largest travel services internet company, Expedia caters to prospective travelers around the world. Expedia offers travel planning, purchasing and experience sharing through its robust online and mobile platforms. With over 750,000 hotels, Expedia can offer hotels to travelers below the listed price. Prospective travelers are provided a price comparison across numerous brands to book hotel rooms and other travel accommodations. Furthermore, Expedia offers a Traveler Preference Program. The Travel Preference Program is a service which provides consumers with the option to pay immediately or at the time of checkout. This business model helps the company compete with direct hotel booking channels and other internet travel companies.

Several travel companies such Hotels.com, Hotwire, and Trivago exist under the Expedia umbrella. These websites specialize in offering hotel rooms at a steep discounts. However, travelers that book with these platforms are unaware of the hotel in which they will stay until the transaction is complete.

Priceline

Like Expedia, Priceline is a travel services internet company offering steep discounts on travel related purchases including airfare and hotel stay. Distinguishing itself from other travel companies, Priceline offers a Name Your Own Price service. Travelers provide relevant travel information such as city, dates and number of rooms necessary with a tentative budget. Priceline utilizes this information and filters through its databases to connect vendors who can provide consumers with reservations at their desired price. However, this process is not completely transparent. Travelers booking with Priceline are unaware of the hotel where they will be staying at until the transaction is complete. Furthermore, Priceline does not quote resort fees within its platform resulting in travelers assuming extra charges. (For more, see: 5 Successful Companies That Survived The Dotcom Bubble.)

Airbnb

Unlike Expedia or Priceline, Airbnb is a peer-to-peer platform that connects host and guests. With a business model focused on the marketplace, hosts and guests exchange personal housing for monetary payment. Different from the hotel industry, Airbnb connects guests with accommodations to apartments and homes. Throughout the application, hosts and guests can find details such as reviews and social media connections to build trust and reputation amongst users in the marketplace. Families and large groups benefit from the larger living spaces found on Airbnb that traditional hotels provide at much greater cost. Furthermore, hotels in large metropolitan cities are generally more expensive than lodging found on Airbnb. In many cases, consumers find that Airbnb offers a less expensive alternative to hotel rooms. (For more, see: The Pros And Cons Of Using Airbnb.)

Other Companies

While Expedia, Priceline and Airbnb are the most popular alternatives to retail hotel reservations, there are numerous companies which provide similar services. Similar to Airbnb, HomeAway is a vacation rental platform with over a million listings in a number of countries. They offer a comprehensive selection of lodging from log cabins to city apartments. Operating within the HomeAway Corporation, Vacation Rental by Owner (VRBO) is an online marketplace providing short term vacation rentals to travelers. HomeAway and VRBO distinguish themselves from Airbnb by not charging booking fees for travelers. Asides from vacation rentals, companies such as Orbitz and Travelocity provide similar services to Expedia and Priceline. (For more, see: Retirees: Save Money On Your Long-Term Travel.)

The Bottom Line

With the continued adoption of smartphones, tablets and other mobile technology, information is becoming more accessible than ever. In particular, alternatives to full price lodging are readily available. Companies such as Expedia and Priceline provide travelers readily available hotels at discount prices. Contractual agreements with hotel brands, allow these companies to offer prices well below retail. For travelers apathetic to hotel rooms, platforms such as Airbnb and HomeAway connect home owners with short term guests or vacationers. While the hospitality industry has rapidly grown in conjunction with digital technology, full price retail hotels are becoming a distant past.

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