Originally Posted by
qprjames1
wow! how can orbitz afford to do this? I run a hotel and we sell our rooms direct through orbitz. a guy just booked this rate. he has paid orbitz $119 (i just talked with him on the phone) but my hotel will charge orbitz $135 after the guest has checked out, meaning orbitz will be out of pocket by $15 for the booking.....how does that make business sense?....is there a catch for the consumer? I don't really care because we will make just the same amount of money from the agent than if the guest booked directly (we add the agent commission level onto our direct prices - which for orbitz is a very high 20%)....but i'm curious as to why they would do this.
Not sure, but I believe it is kind of like a loss leader in a regular store. They use it to build customer loyalty, etc. Also, they run things like this at the end of the year to build their cash on hand for the following year. Think of how many millions of dollars they are sitting on, that they do not have to pay back out for many many months.