Booking a Vacation on Sites Like Booking or Expedia? Think Again

A survey by TheMarker found that conventional wisdom is wrong: Booking vacation packages on international websites is usually more expensive than buying them through local providers

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File photo: Tourists visit the beach in Koh Phangan, Thailand.
File photo: Tourists visit the beach in Koh Phangan, Thailand.Credit: Brent Lewin/Bloomberg

“It’s cheaper than Booking, we swear!” – This is the first banner that greets the user on the Israeli travel site Gulliver when he goes to book a hotel abroad. Gulliver is so eager to convert users that it promises to match any cheaper price they can find on, and provide further compensation to boot.

Gulliver’s CEO Ziv Rozen boasts that not a single customer has claimed to have found a better deal on Booking. The site is so confident that its room search function even has a button leading to the rival’s site, he says.

At first really did find good deals, Rozen says, and consumers remembered that. But they gradually began to raise prices, and consumers still haven’t realized that it’s become expensive, he says.

He’s confident that one day they will. “Booking has a strong brand. Every time you search for a hotel on Google, the first paid link is Booking,” he points out.

It seems Rozen’s right: Booking isn’t the cheapest around. We compared the prices of six hotels in Israel and overseas to find out who offers the best deal: the hotels themselves, local travel agencies Gulliver and Issta, or the international websites Booking and Expedia.

For hotel rooms in Israel, the cheapest option almost always turned out to be making a reservation directly with the hotel. Sometimes the Israeli travel agencies offered a similar price. Booking and Expedia charged the most.

As for hotel rooms abroad, Issta charged the lowest prices while Booking charged the most. In some cases, Expedia was also expensive, but sometimes it was the cheapest option.

When it comes to price, we found that Booking doesn’t bring value to the consumer, but Expedia could.

Issta offers low prices for hotels overseas by accepting lower commission from them, says its marketing manager, Ronen Carasso. Unlike small agencies, a big one like Issta can tap multiple sources for hotel prices and cherry-pick the cheapest. “I recommend that people compare prices,” Carasso says. “Habit can give Booking priority, but they don’t necessarily offer the best price.”

Another Israeli travel agent said they are prepared to accept lower commissions from hotels in order to keep prices low, which Booking won’t do.

The following tips can help you be a smart consumer:

1. Ignore manipulative gambits like “only three rooms left,” “two people are looking at the same room right now” or “40% discount ONLY TODAY.”

Last week the U.K.’s English Competition and Markets Authority said it started investigating hotel booking sites for possibly breaking antitrust laws with such manipulative messaging.

Keep in mind that if the top review for a hotel is great, it may not mean much. Read on.

2. The first hotels that come up in the search results may not be the best ones.

Don’t be too lazy to scroll down. You probably set various criteria for the search, like neighborhood or price, but the hotels highest on the list may simply be ones that pay travel agents the highest commissions. Just like Google, travel sites to book hotel rooms are advertising platforms. The British watchdog is also looking into this.

3. Don’t be bamboozled by prices that leave out VAT.

If you are booking an Israeli hotel room through an international site, note that the price won’t include VAT.

Israeli law requires all prices to be final and include taxes, but that doesn’t apply to hotel room reservations made through non-Israeli sites; VAT in Israel is 17%. In other words, when you fork over your credit card, you may be paying 17% more than you expected.

This alone can lead people to mistakenly think that a hotel price on Expedia or Booking is cheaper than it is. Be aware that they quote a price per night, not for the extent of your stay, and other taxes may apply too.

4. Check cancellation terms.

International sites may charge more, but their cancellation policy may be more flexible than Israeli agencies or direct bookings from hotels, which means they may let you back out of a deal without paying a fine.

International sites clearly state whether a room involves a flexible cancellation policy or not. Some people prefer to pay a premium for the right to cancel without a fine.

5. Know your rights.

Israeli consumer law doesn’t protect you if you book something from a non-Israeli site. The fact that a site it translated into Hebrew or has prices in shekels (as Booking does) doesn’t mean that Israeli law applies – it doesn’t.

If you book a hotel through an Israeli agency or through an Israeli hotel, you can cancel within 14 days and the fine can’t be more than 5 percent of the value of the deal or 100 shekels, whichever is lower.