How do online travel agencies offer such low hotel prices?

They don't. We do. It comes out of our hide. Online travel agencies charge high commissions to the hotels.

Booking.com charges 20%. Hotels.com, Travelocity, Expedia, Priceline and others charge between 22 and 25%. And that's if you have a franchise affiliation and let your franchise organization negotiate it for you.

And those are the ones where you -- the consumer -- don't get that much of a bargain. A contract between a hotel and an online travel agency provides for 'rate parity': each OTA wants a promise from the hotel that the rate provided to it is the lowest publicly available rate, and provides stiff penalties to the hotel if a lower rate is found elsewhere. Likewise, every franchise organization offers some version of a 'Best Internet Rate Guarantee', and holds their franchisees to it. (I should have listened to my dad and made it my goal to go to Duke Law when I was a kid: I smell a lucrative opportunity here for a mass tort lawyer to file a class action suit on antitrust and price fixing claims . . .). Since the 'lowest publicly available rate'/'Best Internet Rate' can only be one number, and that number can't be any lower and still be either the 'lowest publicly available rate'/'Best Internet Rate' ; what you pay on any of those websites is going to be very close to the hotel's 'Best Available Rate', the rack rate (see Michael Forrest Jones' answer to What is and why do hotels have a rack rate? )

Why does the price of hotel accommodation increase over time? With time the hotel's owner's mortgage costs him less. Renting his rooms costs him less, so as time goes he shouldn't have to increase his prices. inflation does not compensate for the smaller cost of the mortgage loan . . .

Because I'm greedy and I want every dollar I can get my hands on, and then some.  That all right with you, or you got a problem with it? . . . :-) 



It's just business. People with whom I do business and to whom I have to pay my bills do it to me: people with whom they do business and to whom they have to pay their bills have it done to all of them. Go around to all of them, get most of them to pull it back a notch and go easier on me to a degree that'll make it worth doing, and I'll be happy to sit down and negotiate the same with you.

What does Michael Forrest Jones think about Airbnb?

I don't think about Airbnb.  

I know a lot of hotel operators have a lot of anxiety over it as a potential 'competitor' (just as taxi owners and drivers in many places have duck fits over Uber), but . . . c'mon, people! As an alternative to a hotel stay, it's a completely different experience. Its relevance as a 'competitor' to hotels is limited to nonexistent. 



As a wannabe competitor to hotels, it's not even anything new. Every hotel that seeks to maintain a good price point has the problem of potential guests seeking a cheaper solution that will work for them.