Is Saving Money Really the Motivator?

Another day, another on-line accommodation booking site.

TripAdvisor subsidiary Smarter Travel Media has now launched, a new hotel-booking site under the provocative media release headline Travellers overpaid millions for hotel rooms in 2011: Tingo comes to the rescue.

It proclaimed that “In 2011 alone, travellers could have saved nearly $314 million if they had had access to a site like”. This makes the accommodation industry look like a bunch of outright rorters.

This new OTA site is an affiliate of, which means the site uses Expedia’s inventory feed and pricing and receives part of Expedia’s commissions. Tingo’s main value proposition and big selling proposition is that it will refund the difference to customers if the price of the room they have booked on actually drops after booking.

Tingo is not the first site to offer refunds when hotel rates drop, as Orbitz Hotel Price Assurance made its debut in 2009. However, through Orbitz, another guest has to book the same itinerary at a lower rate to trigger the refund.

Tingo is doing what travellers could do of their own accord. But with Tingo, they don’t have to scour the fine print in hotels’ cancellation policies, constantly check if the hotel lowered the rate or wait until the last minute to make a reservation. Tingo automatically does the work, enabling guests to book prepaid rooms up to months in advance, then sit back while Tingo monitors any rate drops and rebooks the same room type at the property up until the cancellation policy would otherwise kick in.

If for some reason the hotel increases the room rate, the reservation is locked in at the lower price.

Yes! There are hundreds of travellers out there that figure all of this is worth saving $10-20 a night on a room rate.

Tingo is part of a new website trend – a second wave of booking sites. New sites, such as Tingo, BackBid [see Accom News – March] and GuestMob employ unorthodox models to empower travellers to save money.

But, with travel demand rising, how many hotels will lower their rates to begin with? Increasing rates over time as occupancy rates rise is the prevailing trend today, not the other way around.

Advance booking of accommodation has shrunk to its lowest point ever, due to the full transparency of the online channel and the exploding mobile channel, where 65%-80% of all mobile hotel bookings are made for the same day!

In other words,’s main selling point – that it will refund the difference to customers if the price of the room they have booked drops after booking – is practically irrelevant.

Sooner or later, to counteract decreased merchant commissions and the growth of travel demand as the economy improves, OTAs will be forced to re-institute booking fees that were dropped back in 2009. How would the business model work when there are non-refundable booking fees involved?

One can see why, against ‘expert’ predictions, hotel chain backed Roomkey is doing remarkably well. Perhaps price is not the main motivating factor when it comes to booking accommodation!

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