Essential insights on booking travel directly versus through third-party services.

When planning your getaway, you have various options to secure your flights, accommodations, and rental vehicles. Two popular choices are booking straight with the provider or using a third-party platform like an online travel agency. But is one option superior to the other?

Let’s explore the advantages of each approach and what factors you should keep in mind before making a booking decision.

What does direct booking mean?

Direct booking refers to reserving and paying for your travel directly through the airline, hotel, or rental car agency. For instance, if you're looking to stay at a Hilton hotel, you can make your reservation on the Hilton website. Alternatively, if you're flying with United Airlines, you can book directly through their site.

What does third-party booking mean?

A third-party booking refers to any travel arrangements made through an intermediary provider, such as online travel agencies like Expedia and Priceline, rather than directly with an airline, hotel, or car rental company. Additional examples of third-party providers include travel agents and credit card travel portals (like Chase Travel℠ and Amex Travel).

Advantages of booking directly

At TPG, we frequently advocate for making direct bookings when it comes to travel. Here are some of the key advantages of booking directly:

Direct bookings eliminate the middleman.

In case of travel issues, like a flight delay or cancellation, you can directly communicate with the airline instead of a third-party service. If the airline changes your flight times and the new schedule isn't suitable, you can easily contact them to adjust your flight or even cancel it altogether.

Handling matters directly with an airline can be much more streamlined compared to coordinating changes through a third party. This could mean the difference between having multiple rebooking options or facing limited choices since other travelers (who likely booked directly) have priority.

The same applies to hotels and rental car companies. For example, if you need to adjust your travel dates and want to change your reservation, doing so through a third-party site may not be as straightforward, particularly if you used an OTA.

Third-party reservations often come with stricter rules about changes or cancellations, and you might face fees for adjustments. For instance, if you try to change a ticket booked through a travel agency by calling JetBlue, you’ll incur a $50 service fee per person. To avoid this fee, the airline suggests reaching out to the third-party service that handled your booking, especially if self-management on JetBlue's site isn’t an option.

Moreover, the booking platform itself might charge change fees. For example, Priceline mentions that "if your flight’s fare rules permit changes, a per ticket exchange processing fee may apply." Likewise, Hotels.com states in its terms that it could impose charges for changing reservations.

You have the opportunity to earn rewards and gain elite status.

Typically, airline bookings are eligible for miles accumulation that contributes directly to elite status, regardless of whether the booking was made directly or through a third party. If you book via a third party and include your loyalty program number, you should earn miles based on the airline’s fare class regulations. Holders of status with that airline will enjoy benefits like priority seat selection or complimentary checked bags.

This doesn’t apply to third-party hotel bookings, as these reservations usually do not allow you to earn points or receive any loyalty program benefits.

When working with an independent travel agent or adviser, it's crucial to inquire whether your bookings will count toward status metrics such as points, nights, or stays. Sometimes, your agent might arrange a package deal that doesn't accrue hotel rewards, but you might still be able to add a frequent flyer number for airline miles or benefits. Alternatively, you could book through programs like Hyatt Prive or Hilton Impresario, which do qualify for points and elite night credits.

Frequent guests often have access to special promotions or perks.

Direct bookings tend to be more advantageous for airlines, hotels, and rental car agencies, as these businesses avoid paying commissions to third parties. This allows you to enjoy benefits that encourage you to book directly.

For customers who book directly with airlines, hotels, and rental car agencies, there might be discounts or promotions available. Furthermore, loyalty program members often receive exclusive offers and coupon codes that can only be used for direct bookings.

Booking directly with hotels may secure you a better room, even without elite status. Often, the least desirable rooms (those with no views, smaller sizes, outdated features, or located near service elevators) are reserved for third-party bookings.

There are certainly exceptions; for instance, hotels booked through programs like American Express Fine Hotels + Resorts frequently provide upgraded room types.

If a hotel is oversold, booking directly reduces your chances of being "walked" to another property due to overbooking. However, even loyalty program members with top-tier status can still be walked; hotels are more likely to favor status holders over third-party guests.

Should you discover a lower hotel rate from a third party, you might be able to utilize a price match or a "best rate guarantee." This enables you to book directly at a lower price by showing proof of the OTA's rate. Just remember, your proof must correspond to the exact same room type, as hotels might label rooms differently online compared to OTAs, complicating price match requests.

Advantages of third-party bookings

For many travelers, third-party bookings offer significant advantages. Here are some of the primary benefits of using third-party services:

They simplify the process of quickly comparing prices across various options.

When planning a trip, you often want to explore various choices for flights, hotels, or rental cars. Instead of visiting multiple airline, hotel, or rental car websites, you can utilize a single third-party platform or travel agent to browse and compare prices efficiently.

If time is limited and you want to stay within a specific budget, third-party bookings can be an efficient way to secure a trip that fits your financial limits. They also commonly enable you to bundle airfare, hotel, and rental car into one reservation, making planning easier.

You’ll often discover lower prices and discounts available.

Although direct bookings can sometimes yield promotions and discounts, third-party services frequently provide substantial savings, particularly for last-minute hotel stays. Many hotels prefer to sell their rooms through third-party channels, accepting the commission rather than letting the room remain empty. Just be aware that you might end up with the smallest room overlooking a brick wall, as hotels have little incentive to offer upgrades.

Moreover, some lesser-known OTAs can offer larger discounts than their more popular counterparts. However, proceed with caution: they might also pose challenges if you encounter issues during your trip or need to alter or cancel your booking. Brands like HotelTonight fall into this category.

Certain OTAs provide their own rewards programs.

If you regularly use an OTA for your travel arrangements, it might be beneficial to enroll in its rewards program.

Members of One Key, the loyalty program associated with Expedia, Hotels.com, and Vrbo, earn 2% in OneKeyCash for every dollar spent on eligible hotels, vacation rentals, activities, packages, car rentals, and cruises. Additionally, they receive 0.2% in OneKeyCash for every dollar spent on qualifying flights.

Likewise, Priceline features a VIP program that provides benefits and discounts based on your status level, which can be achieved through completed trips or by holding the Priceline VIP Rewards™ Visa® Card.

The information regarding the Priceline Rewards card has been independently compiled by Dinogo. The card details on this page have not been verified or endorsed by the card issuer.

At times, having a travel advocate can be beneficial.

Utilizing an independent travel agent or adviser (as opposed to an OTA) can prove advantageous, particularly if you need to adapt your plans due to delays or cancellations.

Contacting an airline or hotel can sometimes be tricky due to time zone differences. However, when you book through a travel agent, you can rest easy at night while they manage the rebooking process for you.

Travel agents often possess valuable insider knowledge about specific destinations and can suggest activities tailored to your interests. Additionally, they can help you choose options that fit within your vacation budget.

Should you steer clear of third-party bookings?

The main drawback of third-party bookings is that these platforms act as intermediaries, which can lead to problems in the event of delays or cancellations. It may be challenging to connect with a representative when you book through an OTA or credit card travel portal, as most customer service interactions happen via email or online chat. When you need to rebook, time is crucial, and most people prefer to avoid lengthy waits or convoluted discussions.

Having travel insurance that protects you against delays and cancellations, whether through your credit card or a separate policy you buy, is always a wise decision, especially when using third-party bookings.

Additionally, be cautious of fees associated with third-party bookings. For instance, Priceline imposes a convenience fee for selecting a flight seat, even if the airline does not charge one. Change and cancellation fees are also prevalent among third-party providers.

Nonetheless, there are several situations where third-party bookings can be the optimal choice for your travel arrangements.

For last-minute reservations where your plans are unlikely to change, a third-party booking might be a savvy option if it saves you money compared to direct booking. However, if there’s a chance you may need to cancel or adjust your travel, direct bookings make changes much simpler. It's crucial to read the fine print, as third-party reservations are often nonrefundable and may not provide the option to book a refundable rate, unlike direct bookings which typically offer both refundable and nonrefundable choices.

Another scenario where third-party bookings may be beneficial is when utilizing credit card perks that necessitate making reservations through the card issuer’s travel portal. Such benefits could include the annual $50 hotel credit from the Chase Sapphire Preferred® Card or the $300 annual travel credit from the Capital One Venture X Rewards Credit Card. To access these benefits, you must book your travel via Chase Travel℠ or the Capital One travel portal.

Third-party bookings can be an excellent choice when you’re looking to book a hotel outside of major chains, where earning rewards or having status isn’t as significant.

In summary

If the ability to easily connect with a live customer service representative and effortlessly rebook travel is crucial for you, consider avoiding OTAs and opting for direct bookings instead. Paying a bit more for those assurances can be worthwhile.

However, there are instances when booking through a third party might be beneficial. If you believe that the advantages (such as a potential discount) outweigh the disadvantages, then a third-party booking could be the right choice.