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Cost Analysis: Booking Vacations With Online Travel Agencies vs. Going Direct

Data & Guides Money Analysis: Cost of Booking Vacations Direct vs DIY - Self

The business of travel is constantly evolving. Decades ago, brick-and-mortar travel agencies were the place to go for aspiring vacationers, but all of that changed around the turn of the century when online travel agencies (OTAs) became mainstream. In 2001, there were 111,310 employed travel agents, while in 2022 that number had drastically reduced to 53,180 as people look to book their own vacations more and more. [1] Bureau of Labor Statistics: ‘Occupational Employment and Wages, May 2022 41-3041 Travel Agents’ https://www.bls.gov/oes/current/oes413041.htm#(1)

Today, more than a billion people [2] BusinessofApps: ‘Travel App Revenue and Usage Statistics (2023)’ https://www.businessofapps.com/data/travel-app-market/ use travel apps like Booking.com and Airbnb to find their dream vacation. Yet the public debate still rages on: do you really get a better deal on your trip using a one-stop shop like Expedia, or does it pay to reserve directly with airlines and hotels? 

To find out, this research has analyzed 25 popular flight routes; starting from New York (JFK), Chicago (ORD) and Los Angeles (LAX), as well as 90 hotels in popular destinations from Paris to Bangkok. The study compared the prices of hotels and flights when booked directly against those from Booking.com, Expedia and Agoda.

Key findings

Booking.com offered the largest discounts compared to booking directly

Overall, the dataset analyzed indicated that travelers can save 10.8% on average when reserving their flights through Booking.com compared with a direct inquiry on an airline’s website. Booking.com is also the owner of Priceline.com, KAYAK, and Agoda, however prices and offerings differ on each platform. 

The average ticket across the 30 routes analyzed when using booking platforms was $972.20; compared with $1083.22 when reserved directly with an airline. It appears that Expedia ($937.78 average) and Agoda ($992.24 average) also offer better value when booking flights.

Platform Booking.com Agoda Expedia
Platform Average Hotel Cost (Platform) Booking.com $115.81 Agoda $122.87 Expedia $104.01
Platform Average Hotel Cost (Direct with Hotel) Booking.com $158.69 Agoda $134.25 Expedia $105.04

When it comes to hotels, the analysis found that Booking.com offered the best price compared against booking with the hotel. For the cheapest four-star hotel in each of the 10 cities analyzed, Booking.com’s average price came in at $115.81 per night, which was 31% cheaper than the $158.69 average nightly rate for the same room reserved directly with the hotel. 

Are airlines or online travel agencies more affordable for flights?

According to the Bureau of Transportation Statistics, U.S. airlines carried 194 million more passengers in 2022 [3] Bureau of Transportation Statistics: ‘Full Year 2022 U.S. Airline Traffic Data | Bureau of Transportation Statistics’ https://www.bts.gov/newsroom/full-year-2022-us-airline-traffic-data than they did in 2021, highlighting an industry-wide recovery from the Covid-19 pandemic. With an ever-more competitive air travel sector reliant on leisure routes to meet demand, it pays to shop around.

In many cases, it can be advantageous to book flights directly with an airline. Partnerships like OneWorld and Star Alliance have been created between international carriers to offer competitive rates across various markets. Direct bookings also eliminate the third party, which can simplify the process should your flight be canceled or delayed. 

However, it seems that booking through third parties can save you money. In addition, many established OTAs still allow users to earn frequent flier points and gain access to premium lounges at airports, passengers would need to check this on each occasion. 

On average, the analysis reveals that across 25 unique popular flight routes, the average person would save $103.12 using OTAs compared with booking direct. The data appears to show that Booking.com offers the largest savings, with the average flight 11.1% cheaper on its platform. 

Platform Booking.com Expedia Agoda Direct
Average Flight Cost Booking.com $917.83 Expedia $923.81 Agoda $925.56 Direct $1,025.52
Difference ($)  Booking.com $107.70 Expedia $101.71 Agoda $99.96 Direct -
Difference (%) Booking.com 11.1% Expedia 10.4% Agoda 10.2% Direct -

Which air routes have the biggest savings when booking using OTAs? 

The top five routes of those analyzed that offered savings when using booking platforms were those that were long-haul international flights, with Hong Kong and Tokyo featuring prominently. 

The data found that China Airlines flying from New York to Hong Kong individuals could save over $530 if they decided not to book directly with the airline. In this analysis, United Airlines flights from New York to Tokyo, Chicago to Tokyo, and Chicago to Hong Kong, were all hundreds of dollars more affordable on average when using OTAs.

Flight Route Average saving when booking direct Booking.com Expedia Agoda Direct with airlines
Flight Route New York - Hong Kong (JFK-HKG) Average saving when booking direct $532.675 Booking.com $2,322.80 Expedia $1,711.00 Agoda $2,580.00 Direct with airlines $2,737.25
Flight Route New York - Tokyo (JFK-HND) Average saving when booking direct $348.43 Booking.com $1,911.70 Expedia $1,356.00 Agoda $1,927.00 Direct with airlines $2,080.00
Flight Route Los Angeles - Amsterdam (LAX-AMS) Average saving when booking direct $346.20 Booking.com $746.41 Expedia $1,280.00 Agoda $772.00 Direct with airlines $1,279.00
Flight Route Chicago - Tokyo (ORD-HND) Average saving when booking direct $251.77 Booking.com $1,130.70 Expedia $1,054.00 Agoda $1,188.00 Direct with airlines $1,376.00
Flight Route Chicago - Hong Kong (ORD-HKG) Average saving when booking direct $194.07 Booking.com $1,366.00 Expedia $1,341.00 Agoda $1,266.00 Direct with airlines $1,518.40

Which air routes have the biggest savings when booking direct with airlines?

Despite an overall trend towards OTAs over direct airline reservations, the analysis appears to show a few notable outliers where both international and domestic carriers have cheaper prices on their websites.

According to the analysis, Air France offers the largest savings against OTAs on their Los Angeles to Paris route. A direct economy-class ticket costs $1,299.83, which is $163.22 cheaper than the OTAs we analyzed. The French carrier also offers a similar bargain for its Chicago to Paris flight, where travelers can save as much as $114.92.

Domestic carriers also have a price advantage on some routes over Booking.com and others. The analysis shows that a JetBlue flight from New York (JFK) to Cancun will set you back $353.28, which is $58.78 cheaper on average compared to the OTAs. American Airlines offers a saving of $16.34 on its Chicago to Rome route.

Flight Route Average saving when booking direct Booking.com Expedia Agoda Direct with airlines
Flight Route Los Angeles - Paris (LAX-CDG) Average saving when booking direct $163.22 Booking.com $1,536.44 Expedia $1,312.60 Agoda $1,540.09 Direct with airlines $1,299.83
Flight Route Chicago - Paris (ORD-CDG) Average saving when booking direct $114.92 Booking.com $732.10 Expedia $744.50 Agoda $630.15 Direct with airlines $587.33
Flight Route New York - Cancun (JFK-CUN) Average saving when booking direct $58.78 Booking.com $446.70 Expedia $347.92 Agoda $441.59 Direct with airlines $353.28
Flight Route Chicago - Rome (ORD-FCO) Average saving when booking direct $16.34 Booking.com $595.23 Expedia $652.04 Agoda $761.53 Direct with airlines $653.26
Flight Route Chicago - Bangkok (ORD-BKK) Average saving when booking direct $3.16 Booking.com $1,114.56 Expedia $1,351.53 Agoda $1,484.13 Direct with airlines $1,313.58

Are hotels or online travel agencies more affordable for Rooms? 

There’s a reason why Monopoly players invest their fortunes putting big red houses on their properties. Hotels are big business, and research from Statista estimates that the global hotel and resort industry is worth more than $1.2 trillion [4] Statista: ‘Market size of the hotel and resort industry worldwide from 2013 to 2022, with a forecast for 2023’ https://www.statista.com/statistics/1186201/hotel-and-resort-industry-market-size-global/. But does it pay to shop around when searching for the ideal room, or do hoteliers offer the best prices on their own websites?

On average, the analysis shows that across 90 hotel quotes in 10 popular global destinations, vacationers can expect to save an average of $18.43 per night using OTAs compared with booking directly via the hotel. With a 31% price difference, Booking.com appears to offer the best value for money of the major OTAs, while Expedia’s results for the same destinations in this study return just a 1% saving.

Importantly, this data compares apples to apples, reviewing the price of the exact same hotel room offered by the booking platform and then the hotel directly. 

Platform Booking.com Agoda Expedia
Average Hotel Cost (Platform) Booking.com $115.81 Agoda $122.87 Expedia $104.01
Average Hotel Cost (Direct with Hotel) Booking.com $158.69 Agoda $134.25 Expedia $105.04
Difference ($) Booking.com $42.88 Agoda $11.39 Expedia $1.03
Difference (%) Booking.com 31.2% Agoda 8.9% Expedia 1%

However, it is worth noting that these prices exclude offers and membership discounts from hotel chains. They also exclude OTA offers, such as Booking.com’s Genius loyalty program.  Naturally, any deal may work out cheaper on either side if they were included, but for the purposes of this research were all excluded for balance.

It’s a smart decision to compare both booking platforms and hotels to see which is offering the best nightly cost and look for things like hotel chain loyalty schemes, whether breakfast is included, or if they offer late checkout exclusively to members. 

Which destinations offer the largest savings on hotel rooms?

To better analyze hotel prices, the study used the 10 popular global destinations and compared the price of the cheapest four-star hotel room quoted by OTAs against the same hotel’s own room rate. 

For seven of the 10 global destinations, reserving through Booking.com offered a better rate, with only rooms in Rome and Hong Kong offering better value from the hotel itself. Meanwhile, Agoda offered cheaper rates in five of the 10 cities, and Expedia just four of 10. 

A notable outlier in the analysis was London, UK, where the most affordable four-star hotel came in at the same price on both the OTAs and the hotel website. As the data shows, the London hotel offered by the three OTAs was the same location as it had chosen to list on all three platforms. 

Hotel cost
City Booking.com Direct Expedia Direct Agoda Direct
City Amsterdam Booking.com $342.54 Direct $579.88 Expedia $102.19 Direct $119.34 Agoda $364.11 Direct $363.73
City Bangkok Booking.com $18.03 Direct $32.78 Expedia $15.81 Direct $32.78 Agoda $49.72 Direct $63.26
City Cancun Booking.com $49.34 Direct $111.97 Expedia $74.21 Direct $71.17 Agoda $66.42 Direct $86.37
City Hong Kong Booking.com $51.09 Direct $50.44 Expedia $77.86 Direct $85.01 Agoda $50.44 Direct $49.88
City London Booking.com $103.40 Direct $103.40 Expedia $103.40 Direct $103.40 Agoda $103.40 Direct $103.40
City Paris Booking.com $109.49 Direct $179.48 Expedia $82.72 Direct $85.02 Agoda $179.48 Direct $92.45
City Rome Booking.com $98.54 Direct $90.26 Expedia $103.40 Direct $90.26 Agoda $90.26 Direct $97.32
City San Juan Booking.com $108.27 Direct $134.03 Expedia $201.94 Direct $158.81 Agoda $134.03 Direct $83.94
City Tokyo Booking.com $90.02 Direct $176.78 Expedia $116.78 Direct $176.78 Agoda $176.78 Direct $97.32
City Toronto Booking.com $187.34 Direct $127.89 Expedia $161.79 Direct $127.89 Agoda $127.89 Direct $190.99

The analysis indicates that it does pay to shop around and use multiple OTAs to find the best price. For example, a four-star hotel in Amsterdam with Booking.com would cost $342.54 per night, yet a similar four-star hotel is just $102.19 on Expedia. Meanwhile, it is possible to save as much as 51% on a hotel room in Bangkok, by booking through Expedia instead of direct.

While the data suggests that deals can be had by using OTAs, the most time-consuming method of comparing hotels and booking platforms is still the only way to guarantee you are getting the best rate for your next trip.

Methodology

This analysis reviewed prices of hotels and flights for bookings reserving for the week of 08/21/23 - 08/28/23 to represent a common vacation time of the year. The top three biggest U.S. cities (New York City, Los Angeles, Chicago) were selected to calculate the price of flights to travel in and out of the country.

The price of a hotel and flight was reviewed on Booking.com, Expedia, and Agoda, and then compared directly with the exact hotel website or airline website. The exact same types of seats on an airline and luggage allowance were selected. The exact same room type was selected when comparing hotels. The lowest-priced four-star hotels were chosen and ‘best route’ available by OTAs was chosen to analyze, this was selected as one economy seat. Cost data was collected on 07/01/23 referring to bookings for the aforementioned August week.

No loyalty schemes, discount codes, or other promotions were used when booking direct or using booking platforms.

Sources

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