Why does my hotel booking price change over time?

Question

I have recently booked a few hotels for my trip to Japan next year. I booked some through Agoda and some through Booking.com

I have seen that the Agoda price in GBP has not changed, I am assuming it is a fixed price and will be like that until I pay. However the hotels booked with Booking.com have surged up in price and have only now recently started to go down again. During this time the Yen price has not changed on both websites.

I had presumed this was down to the way sterling has been performing the last few months or so. However, it seems that the hotel I booked for Tokyo had actually gone down in price, which disproves my theory in a way.

My question is: Is there an algorithm used here when calculating the current price? Is there a specific time I should pay for the hotels (i.e. when they're at the lowest in price)? And should I book these hotels with Agoda instead so that the price stays fixed?

If anyone would like the actual values for my booking.com bookings:

Answer 1

There can be two answers, here.

First the easy one: the price you will pay is the price that you agreed at the moment of booking, so expect no raises and no discounts.

Then, the complex answer to "Is there a specific time I should pay for the hotels?"

---

What you are observing is the standard way it works with hotels, and it's the total opposite of what happens with planes.

Premise: for ease of explanation let's fix a day, let say you'll go on holiday the 15th of March.

Airlines make money with last "minutes" bookings. They know that those that will book just a few days before or even the same day of the flight, maybe at the airport counter, are those who need to fly; often are business travelers which have no problems of money at all. Thus, airplane's fares are very cheap when booking far from the 15th of March, and increase as you approach it. In a sense, it's actually those who are booking between 12th and 15th of March who are paying the flight for everybody else.

Hotels, on the other hand, work exactly the opposite. A hotel has no expenses and has no "last minute business customers", and for a hotel an empty room is a 100% missed gain. And they know that peoples (the same who book a flight months or an year in advance) tend to plan their holidays quite early, are willing to pay more to stay in the hotel they have chosen, and to avoid the irrational fear (more on this later) to find no place to stay. So a hotel has a fixed fare for 15th of March that is quite high, and that everybody will be happy to pay to secure a room.

As time passes, anyway, the hotel needs to be sure to fill all of its rooms: as I said, an empty room is a 100% missed gain. So fares tend to drop (a lot) the more you approach the 15th of March, and if you book the previous day you will find at the hotel a few discounts.

BUT...then there are sites like Booking.com. Those sites provide free advertising to the hotel and allow them to reach a huge audience that would be really expensive to reach on their own, so the hotel has all the interests to sell some of its room through those sites. And this means that the hotel allow booking sites to drop prices a lot. After all, as we said, an empty room etc. etc.

In the end this means two things:

• Yes, what you see is perfectly normal. The hotels you booked will likely drop in price down to an 80% as your holiday will approach. But you will obviously pay what you agreed at the moment of booking, no discounts

• Unless it's a very busy place and in high season, or you are easy to panic, or you just want that exact hotel, it's better to book (and pay) at the last minute.
  Just for reference, in Dubai I spent 42 euro a night for a suite that is normally 350 euros (the power of overbooking, too), and did more or less the same in Indonesia, just booking when in front of hotels and getting discounts from 40% to 70%. And so on, and on...

Answer 2

To add to the answers above, from my experience, those two sites (Agoda and Booking) work differently for hotels in most of Asia. Agoda charges you in full at the moment you make the reservation, and issues you a voucher you present to the hotel. No further payment is due, and you don't even need to give them your credit card (although some would still insist for "a deposit" but generally they prefer cash) Thus the price Agoda charges you in this case cannot change at all.

(Still in many cases I was still able to find later the same hotel for the same dates on Agoda cheaper; canceled the reservation and got the new price. If you want to do this, make sure you get free cancellation; Agoda recently started charging a cancellation fee on some properties, even if the hotel otherwise comes with free cancellation).

Booking.com makes a true reservation - i.e. they submit your data and CC to hotel, which holds a room for you. You're not charged anything until arrival, and if the room is charged in currency different from yours, the amount you would have to pay may change depending on the exchange rate. Note that the room may be quoted to you in any currency, but there will always be note in small print that the actual amount you pay would depend on the exchange rate later.

Answer 3

As far as I know the price is fixed with booking.com. You say you already booked, so the price is still the same. Have you checked your booking/payment information for this?

I have made a reservation on booking.com without payment before and the price of the room went down a few weeks later but I still had to pay the same amount. (This was easily fixed thanks to free cancellation though). I think this works the same when the price goes up as well.

Obviously exchange rates are a different story but you say you already looked into that.