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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (71770)12/19/2022 12:15:37 AM
From: Elroy  Read Replies (1) of 78745
 
I see it this way: There's some kind of moat. Everybody I know (I don't know that many though -g-) somehow uses Expedia, Booking, and/or Airbnb.

You're looking at it from the wrong perspective. The users love the OTA aggregators.

The ones who are being crushed by the massive commissions are the hotels or AirBNB owners. THEY have to figure out how to make a booking system which favors them rather than the current arrangement which puts the OTA between them and their customer.

Think about it. If you pay $250/night through Expedia for a hotel, the hotel is getting perhaps $210/night. If you book direct, the hotel gets $250/night. For the user it's the same price. For the hotel, the OTA commission is horrible.

If you call the hotel and say you will book directly for the same $250, but you want an perk (room upgrade, free breakfast, whatever) the hotel doesn't give it to you. I've tried. I don't know why the hotel doesn't give you perks for direct bookings (which mean no commission), but they don't.

I don't know what the booking agents moat is, but it's been there for decades. Some day it will be overcome, but I don't know enough about it to know why.
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