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Speaker 1: The three little words that can save you a lot

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Speaker 1: on your next hotel booking. What's going on, amrich Demiro.

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Speaker 1: This is Rich on Tech, and there's something called the

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Speaker 1: rate parody clause. These are three little words that might

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Speaker 1: save you big the next time you book your hotel room.

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Speaker 1: Here to talk about that and other travel topics is

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Speaker 1: Sharik Minhas. He is Chief Technology Officer with Silicon Valley

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Speaker 1: Software Group. Sureike, thanks so much for joining me.

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Speaker 2: Thanks for having me.

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Speaker 1: You're saying that these words might make a difference. Why

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Speaker 1: is that?

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Speaker 2: Sure? I'll start off with a little history of how

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Speaker 2: this came about. So you know, right after nine eleven,

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Speaker 2: hotels were hurting big time and online travel agencies so

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Speaker 2: by that, I mean companies like Expedia and price Line

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Speaker 2: we're growing in popularity. And so what they were what

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Speaker 2: they started doing was they started undercutting hotels rates. By

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Speaker 2: they used to get a hotels would pay Expedia and

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Speaker 2: Priceline commission for sending traffic that way bookings, and that

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Speaker 2: commission was anywhere between fifteen and twenty percent. So expedient

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Speaker 2: pricelines started, you know, cutting into their own commission to

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Speaker 2: offer travelers cheaper rates on their own websites. So you know,

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Speaker 2: if the hotel had one hundred dollars rate on their

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Speaker 2: own website, Expedia would offer it for ninety bucks by

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Speaker 2: cutting into their own commission. So hotels actually initially pushed

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Speaker 2: for this rate parity clause, and what it said was,

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Speaker 2: you can offer a different price on different websites. It's

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Speaker 2: got to be the same no matter where you go.

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Speaker 2: So the hotel's website has to have the same price,

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Speaker 2: Expedia has to have the same price. Price line has

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Speaker 2: to have the same price.

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Speaker 1: So this is the reason why by basically, when you

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Speaker 1: go shopping for a hotel room now online, it's pretty

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Speaker 1: much the same price everywhere exactly.

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Speaker 2: That's right. Unfortunately, it ended up backfiring for hotels, especially

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Speaker 2: like the boutique and independent hotels, because time Expedient Priceline

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Speaker 2: became these marketing machines and they became really efficient at

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Speaker 2: getting people to land on their homepage instead of the

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Speaker 2: hotel's own website. And so all of a sudden, you know,

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Speaker 2: they had this, they had this power, and you know

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Speaker 2: they were they were taking fifteen to twenty percent commission.

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Speaker 2: So for a hotel, you know, if you as a

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Speaker 2: consumer book on the hotel's own website say one hundred

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Speaker 2: dollars room. That one hundred dollars goes completely to the hotel.

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Speaker 2: If you book it on Expedia a price line, the

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Speaker 2: hotel only gets eighty dollars. Right, So they hotels want

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Speaker 2: you to book direct, But they're not marketing machines, especially

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Speaker 2: the independents and boutiques. They don't have you know, the

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Speaker 2: scale and the expertise to compete with expedient Priceline when

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Speaker 2: it comes to marketing, right.

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Speaker 1: Because they've got the SEO, they've got the awareness, they've

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Speaker 1: got the you know, people just know, okay, book here,

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Speaker 1: it's a legitimate site. And also they have a log in,

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Speaker 1: they've got their credit card information stored with that site.

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Speaker 1: This is probably why we see all of these companies

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Speaker 1: like Hilton and others saying, hey, book direct with us

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Speaker 1: and we'll give you some sort of perk. Right. Is

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Speaker 1: that why there's is that how they fight back at

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Speaker 1: these sites.

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Speaker 2: That's how they fight back at these sites. And for

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Speaker 2: the Hiltons and the Marriotts and those companies, it's easier

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Speaker 2: because they're recognized brands. Where this really gets, you know,

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Speaker 2: interesting for consumers is independent and boutique hotels. So you

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Speaker 2: know those are generally like smaller, smaller chains less than

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Speaker 2: twenty hotels, or people who own say one or two hotels.

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Speaker 2: They tend to be kind of designer art type of hotels.

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Speaker 1: And.

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Speaker 2: You know they can't fight. They don't have the scale

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Speaker 2: that a Hilton does to fight back. So you know

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Speaker 2: that's why you could as a consumer really get the

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Speaker 2: bigger discounts if you approach them directly.

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Speaker 1: So you're saying to do something sort of old school.

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Speaker 1: So find the rate online, but then literally what call

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Speaker 1: all the hotel and say what.

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Speaker 2: Yeah, find a rate online, call or email the hotel

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Speaker 2: and ask them and offer them a price. So if

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Speaker 2: you see one hundred dollar rate, say I'm coming into

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Speaker 2: town two nights from now, and I noticed you had

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Speaker 2: thise hundred dollars rate online, you know, would you accept ninety?

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Speaker 2: And if you do the math, you know, if they're

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Speaker 2: being expedia fifteen percent commission on that room, they're going

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Speaker 2: to get eighty five dollars in revenue. And Expedia won't

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Speaker 2: even give them your email address if you if they

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Speaker 2: give you ten bucks off, they still end up making

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Speaker 2: five bucks more and they get your email address, and

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Speaker 2: you're and you know you're on their mailing list, and

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Speaker 2: so you're you're dead customer instead of being Expedia's customer.

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Speaker 1: So it sounds great. I have not personally tried this.

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Speaker 1: Does it actually work? Is it more time and effort

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Speaker 1: for them to have someone? I mean barely half the time?

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Speaker 1: And I know you're talking about some of these boutique

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Speaker 1: hotels where you can actually get someone on the phone,

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Speaker 1: but the main hotels you can't even get someone on

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Speaker 1: the phone anymore. I couldn't even find a email address

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Speaker 1: for a hotel I was staying at the other day

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Speaker 1: in New York City. I finally got a phone number.

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Speaker 1: But you know, does this actually work.

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Speaker 2: It's not likely to work for chains, so like the Hiltons,

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Speaker 2: but it'll work for the boutiques and Independence, and there's

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Speaker 2: a lot of them in the United States and even

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Speaker 2: more in Europe. So like, just in terms of the US,

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Speaker 2: I think there's about fifty three thousand hotels in the

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Speaker 2: US total, and twenty two thousand of them are Independence

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Speaker 2: and chains, so that's like forty two percent. I personally

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Speaker 2: find that I have a much better experience staying at

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Speaker 2: these hotels than the large chains because they go that

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Speaker 2: extra mile to make it a personalized experience. So it

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Speaker 2: worked for the independence and boutiques, not necessarily for the chance.

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Speaker 1: Some of the other tips you have is use these

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Speaker 1: flash sale sites to score great deals. So you mentioned

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Speaker 1: one called secret escapes dot com. What's the deal on

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Speaker 1: that site?

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Speaker 2: Yeah, So they're staying as in they try not to

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Speaker 2: advertise on Google, and they do advertising on TV and radio,

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Speaker 2: which is kind of interesting because so and they figured

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Speaker 2: out a way to do that profitably, so they will.

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Speaker 2: They have luxury hotels all across you know the world

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Speaker 2: and up to seventy percent off. And the way they

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Speaker 2: do that is they don't reveal the hotel, you know,

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Speaker 2: until after you've purchased it, but you know kind of

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Speaker 2: the class of the hotel that you're getting, and they're

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Speaker 2: generally very high end hotels. So you'll get, you know,

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Speaker 2: something that you couldn't have stayed with, you know, at

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Speaker 2: a normal price, much much cheaper through using a site

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Speaker 2: like secret Escapes. And they don't they don't fall into

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Speaker 2: this great parody clause because they're not the hotels are

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Speaker 2: not publicly available, the rates are not publicly searchable, So

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Speaker 2: that's the little loophole that they exploit.

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Speaker 1: The Sunday night stay. So this is another tip. You

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Speaker 1: have stay on a Sunday night so you have the

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Speaker 1: best chance of an upgrade on a Sunday night.

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Speaker 2: Yeah, that's generally the lowest occupancy night and so rate's

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Speaker 2: the lowest and you have availability. Therefore, that's you know,

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Speaker 2: in addition to getting a lower price, you're also going

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Speaker 2: to get a better chance of having an upgrade because

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Speaker 2: there'll be more rooms available.

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Speaker 1: And something that I normally don't do, you recommend to say,

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Speaker 1: you say, book packages instead of your flights and hotels separately.

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Speaker 1: So what's the deal with the package? Because I always

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Speaker 1: stay away from these because I feel like if I'm

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Speaker 1: booking them as a package, I have less flexibility. So

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Speaker 1: am I losing out on a lot of cash here?

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Speaker 2: Yeah? So packages are like a loophole around rate parity

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Speaker 2: because they bundle booth, the hotel and the flight together.

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Speaker 2: You know, technically the hotel's price isn't revealed standalone. Therefore, yeah,

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Speaker 2: they can offer a lower rate than they will be

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Speaker 2: able to offer if you book a hotel separately.

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Speaker 1: So even if they have a deal to let's say,

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Speaker 1: you know, get that room for one hundred dollars from

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Speaker 1: the hotel. They can offer it at sixty knowing they're

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Speaker 1: going to just lose out a little bit, but make

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Speaker 1: it up in other areas, maybe by selling you some extras.

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Speaker 2: That's right.

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Speaker 1: What are the two main brands?

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Speaker 2: So it's a duopoly. Price Line is one brand, Expedia

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Speaker 2: is the other brand.

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Speaker 1: Okay, so what is price Line own?

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Speaker 2: Price Line owns booking dot com, it's the big hotel site.

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Speaker 2: It owns a Gooda as well, which is huge in Asia.

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Speaker 2: And then Expedia owns hotels dot com, hot Wire, Travelocity

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Speaker 2: and orbits wow.

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Speaker 1: So no matter what, you're pretty much booking with one

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Speaker 1: of those two if you don't go direct to the

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Speaker 1: websites or use Google or use a smaller hotel. So

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Speaker 1: basically you're booking with one of those two no matter what.

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Speaker 2: That's right, And even the metasearch engines. So price Line

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Speaker 2: owns Kayak and Expedia owns Trebago.

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Speaker 1: And so sherik. Where do you book? Where do where

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Speaker 1: should we book? Where's our best? I mean you like

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Speaker 1: to do the boutique hotels? I mean where do you

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Speaker 1: like to search? Start your search? Is it the Google?

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Speaker 1: Or I mean pick one.

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Speaker 2: I like to start my search and trip Advisor because

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Speaker 2: I go look for the hotel that I want to

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Speaker 2: stay at and then I contact them directly.

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Speaker 1: And is trip Advisor owned by one of these conglomerates.

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Speaker 2: Sip Advisor used to be owned by Expedia and then

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Speaker 2: they spun them off because it was such a you know,

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Speaker 2: great business in it's on its own all right.

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Speaker 1: Lots of good good information, uh Sherik minhas from Silicon

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Speaker 1: Valley Software Group again some great tips on how to

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Speaker 1: get the best deal for your hotel room and just

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Speaker 1: some insight into that industry in general. Serik, thanks so

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Speaker 1: much for joining me on the show today.

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Speaker 2: Thanks for having me.

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Speaker 1: If you want more information, you can go to my website.

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Speaker 1: It's rich on tech dot tv. I'm Richie Demurro. Thanks

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Speaker 1: so much for listening. Happy booking. I'll talk to you

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Speaker 1: real soon, but bye,