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Prior to the Internet , travelers could write or telephone the hotel directly, or use a travel agent to make a reservation. Nowadays, online travel agents will have pictures of hotels and rooms, information on prices and deals, and even information on local Resorts . Many also allow Review s of the traveler to be recorded with the online travel agent. Online hotel reservations are also helpful for making last minute travel arrangements. Hotels may drop the price of a room if some rooms are still available. There are several Websites that specialize in searches for deals on rooms. Hotels face several challenges in selling online directly to consumers. There are numerous electronic distribution "channels", and connecting to them, then managing the room inventory and rates to be offered online is essential. Sales Channels Large hotel chains typically have direct connections to the airline global distribution systems (GDS) (Sabre, Gallileo, Amadeus and Worldspan) that in turn provides hotel information directly to the hundreds of thousands of travel agents that align themselves with one of these systems. Individual hotels and small hotel chains cannot afford the expense of these direct connections and turn to companies such as GenaRes , SynXis and most recently, Travel Sciences to provide the connections. Several large online travel sites are, in effect, travel agencies. The largest include Expedia and Travelocity. Travelocity gets its data primarily from Sabre; Expedia from WorldSpan. Companies such as Pegasus send the hotel's information and rates "downstream" to literally thousands of online travel sites, most of which act as travel agents so that they can receive commission payments from the hotels for any business booked on their websites. See also: Affiliate partnerships Lastly (oddly enough), persons can book directly on an individual hotel's website. An increasing number of hotels are building their own websites to allow them to market their hotels directly on the web, most notably Hilton (who also use Pagasus). Non-franchise chain hotels require a "booking engine" application to be attached to their website to permit persons to book rooms real time. Again, third party companies like GenaRes, SynXis and Lexington Services are major players in providing the booking engine for the hotel sites, as well as connections to the airline global distribution systems, and the means to communicate with the thousands of online travel sites. To improve the likelihood of filling rooms, hotels tend to use several of the above systems. The content on many hotel reservation systems is becoming increasingly similar as all the hotels sign up to all the sites. Companies thus have to rely on specially negotiated rates with the hotels or hotel chains, or trust in the influence of search engine rankings to draw in customers. The ultimate service provided by these companies to the hotels and the online consumer, is that they provide a single database from which all reservation sources draw immediate room availability and rates. It is very important that hotels integrate with all the supply channels so that their guests are able to make accurate online bookings. Inventory Types Consumers should be aware of the different types of online booking providers that exist. Many well know sites like Hotels.com and Expedia offer "net rates". Under net rate models, the provider obtains pre-negotiated rates from the hotel properties and then they mark-up the net rate to a retail rate that is offered to the consumer. There are numerous disadvantages associated with net rates of which consumers should be aware. First, the rates are not recognized hotel rates which mean that if there are any rate issues or problems when consumers arrive at the hotel, the hotel can not resolve the matter. The hotel will refer you to the online provider because it is their rate. Second, most pre-negotiated rates provide that the hotel will not extend any rewards privileges or credits. Consequently, when consumers book a net rate they will not be eligible to earn any hotel rewards points. Additionally, it very common that direct rates from the hotels themselves are lower. This because the net rate offerings are based on pre-negotiated rates that were established at a fixed point in time. As the hotels respond to market demands, the hotels change their rates accordingly. Conversely, the net rate online provider has considerably less room to respond and do so less frequently. Finally, net rate providers, as natural function of the pre-negotiated rate environment, typically impose pre-payment and impose their own cancellation policies that are usually more onerous, whereas most direct rates offered by hotels do not require pre-payment and have relaxed cancellation policies that usually allow cancellations up to one day before check-in. Fees Irrespective of whether an online provider offers direct rates or net rates, consumers should also be aware of a popular and hidden practice of including additional booking fees that raise the effective rates that are paid. Typically, additional booking fees are not shown or visible when rates are displayed and can only be accessed after a booking is commenced. Often these fees are found in a "Taxes and Fees" section. These fees can add as much as a 10% increase in the effective rate. An example of a direct rate site with no extra booking fees is Roomrate.com Affiliate Marketing Affiliate marketing of consolidators' net rate inventory has become a positive and negative contributor to the online hotel reservation landscape. As part of a larger distribution plan, affiliate marketing affords providers like Pegasus, Hotels.com and Lodging.com a wider network of consumers previously unavailable. Conversely, Hotel brands view affiliate marketing in somewhat of a negative light because it separates that inventory, still bearing their brand, from their strict pricing controls and independent marketing agreements. EXTERNAL LINKS
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