Attention, bargain-hunters! “Opaque” doesn’t necessarily mean “cheapest”

One of the most frequently-repeated pieces of advice for bargain-hunters is that you’ll always find a deal on one of the so-called “opaque” travel websites, like Hotwire or Priceline.

The companies routinely offer discounts of up to 50 percent off the published fare or rate, but there’s a tradeoff: You don’t find out the name of the airline, car rental company or hotel until after the purchase. And the transaction is completely non-refundable.

So when Raymond Rios went looking for a rental car on Hotwire, he was surprised when the price fell far short of his expectations.

Rios started his search on Expedia, Orbitz and Travelocity, to get an idea of what a rental would cost in West Palm Beach. Then he went to Hotwire and found what he believed to be the best price — $87 through Budget. He paid for it.

But when he clicked on Budget’s website to calculate how much he had saved, and was shocked to see an even cheaper rate: $77 for the same rental period. He phoned Hotwire to see if they could adjust his rate, but it refused.

This practice they used against me is very deceiving and I think they have taken advantage of me as a customer, making me overpay for a purchase when it was an opaque rate. I have all the screen shots where Budget.com was offering me the rate of $77, which I can forward to you as evidence.

I think I should get a partial refund in which I get a substantial discount by booking an opaque rate.

I’m not so sure about that. In a dynamic pricing environment, it’s possible for Hotwire to offer a higher rate, even though it’s opaque, than a car rental company or an online travel agency.

But the last time I had a question about an allegedly overpriced opaque rate, and tried to explain to a reader that there was no meaningful low-price guarantee, I got an angry response (“You call yourself a consumer advocate? Shame on you.”). Then she contacted the opaque site on her own, and received a refund.

This time, I promised to at least get a response from Hotwire.

Rios sent an email to Hotwire, but the form letter he received — I won’t bore you by republishing the whole thing — didn’t address his problem.

“Car rates change all the time based on availability and demand so it is important you act quickly when you see a rate you like,” the online agency said.

So I contacted Hotwire on his behalf. And here’s what it had to say:

Hotwire works with some of the largest car rental suppliers to provide customers with both “retail/published price” and “opaque” Hot Rate inventory. We display the results for both options within the same search results on our site, and always prioritize the lowest price point so that it’s at the top of the page, regardless of whether it’s a published price or a Hot Rate.

If the Hot Rate option that Raymond selected was at the top of the page, then it definitely was the lowest available price on our site based on the travel details he provided. We’ve also confirmed that the Hot Rate car rental purchase in question was verified to be lower than the equivalent retail price at that time.

We have a lot of confidence in the price points for our Hot Rates. In exchange for learning the rental agency after the booking, customers can receive discounts that are as much as 40 percent off of retail pricing.

It’s also important to note that we search all publicly available inventory to ensure we generate the most accurate results possible. But occasionally, suppliers will run limited availability offers directly through their own sites.

We can’t confirm that this is what Raymond found on Budget’s site, nor can we confirm the timing or what, if any, special restrictions or conditions existed for that option. However, we would always instruct customers to actively shop around to compare prices between multiple sources before booking on Hotwire. Not only because we believe that we will be the best option the vast majority of times (often beating even limited-availability offers), but also because we want customers to be informed on their purchases ahead of time.

The rental car industry is very dynamic, with frequent inventory and pricing changes, so research is always important. We’re also working closely with our partners to gain access to these limited-availability rates as well, and we’re confident that we’ll have them coming soon.

Hopefully, Raymond will consider shopping with us again when booking in the future.

Well, there you have it. Car rental prices may be lower on Hotwire, but there’s no guarantee.

So the conventional wisdom about opaque sites is still right — most of the time.

(Photo: S Norski/Flickr Creative Commons)

  • June~Bug

    Raymond should have done his own research before booking, not just blindly booked the first thing he found on the internet. I don’t think he should get any kind of refund.

  • Carver

    I’m usually on the consumer’s side, but not this time. Unless hotwire gives a guarantee, the OP was presented a price which he was apparantly satisfied with. Its a no brainer that the travel supplier may run a sale or special. Just because someone else had a better deal doesn’t mean that he’s entitled to a partial refund.

  • Monica

    I would never assume that I’m getting the cheapest rate just because I’m using an opaque site. Maybe they were at first, but now I treat them just like any other website.

  • SirWired

    I would not have mediated. If he thought the car was being offered for a fair price, the fact that he could have gotten it cheaper elsewhere doesn’t make the price less fair.

    Perhaps Budget had prices they didn’t want to relay to Hotwire; this isn’t Hotwire’s “fault”, and I don’t see how the consumer got ripped off.

    If you don’t do your research, that does not reflect poorly on any way on the merchant you purchase from.

    Heh… I guess you do get stuck with Damned if you do, Damned if you don’t questions all the time… If you do mediate, you get criticized for pandering to an entitlement mentality, if you don’t you get slammed for being a useless corporate mouthpiece.

  • John

    As a manager at a hotel, I tell people all the time to use caution when using those sites. Many times they can get the same price by booking through the hotel directly. People also forget that when you prepay through these sites you also don’t get your loyalty club points. So be careful when booking through these sites.

  • ART

    The opaque sites used to have bargains. I haven’t found that to be true in the last few years. I use them to compare prices, and any more I find I can get the same price directly from the company. The opaque sites seem to be riding on their past reputations. I agree with other people, Raymond should have done his research first. That has always been true when shopping since the beginning of time.

  • http://www.autoslash.com Jonathan

    This is only partially true:

    “Car rates change all the time based on availability and demand so it is important you act quickly when you see a rate you like,” the online agency said.

    Let’s me give you a revised version from AutoSlash.com’s perspective:

    “Car rates change all the time based on availability and demand so it is important that you book as early as possible, and use a price tracking service that will automatically lower your rate as prices drop. The earlier you book, the more likely it is that you will have your rate lowered since you can take advantage of any drop between the time you book and the time you pickup your rental.”

    Bottom line–Why be locked in? Why prepay? Why get screwed when your plans change? There is a better way…

    AutoSlash.com

  • Arizona Road Warrior

    Sometimes these opaque travel websites like Hotwire or Priceline, you can get a good bargain. Sometimes, the savings are not that much if the traveler booked directly with the hotel, rental car company, etc.

    It is good marketing, branding, etc. People think that these opaque travel websites have the lowest rates so they don’t research. This is like Southwest, people think that they have the lowest fares but they don’t (i.e. the reason why Southwest doesn’t allow its fares to be included in any fare search engine) have the lowest fares even if you include the checked bag fees from a legacy airline.

    I don’t use opaque travel websites for six reasons: 1) you don’t know the name of the hotel, car rental company, flight times, etc. before the booking; 2) the terms are non-refundable, non-changeable, etc…traveling for business, things can change at the last minute; 3) can be treated like a 2nd class traveler (i.e. given the ‘worst’ room, etc.) since you have a discounted rate; 4) may not get credit for frequent guest program; 5) not knowing the flight times upfront; 6) having connectiong flights instead of direct flights; etc.

  • Gary

    It amazes me that some travelers go to Priceline’s name-your-own-price website and bid on a commodity they have no idea what the price should be. There are multitudes of locations and *-ratings and that should factor into their bidding.
    I like to know what others have gotten before I place my first bid. Remember, if one traveler bids $80 for the same type of room a $50 bidder got, Priceline thanks them to the tune of a $30+ profit. I use http://biddingfortravel.yuku.com/ as a gauge before I place my first bid.

  • http://deranged.me cschelthoff

    So Raymond “Einstein” Rios found a lower price through Budget after he picked Hotwire – normal people check prices before they buy the product, not after. Ahhhh, maybe he was thinking that Hotwire would price-match if you showed them the ad (screen shot). go back to Kmart…

  • http://www.best-car-rental-tips.com Paula

    When checking rates on a site like Hotwire, I always think it’s best to the opposite of what Raymond did…”he went to Hotwire and found what he believed to be the best price — $87 through Budget. He paid for it.

    But when he clicked on Budget’s website to calculate how much he had saved, and was shocked to see an even cheaper rate: $77 for the same rental period.”

    I would check Hotwire, see which company offers the lowest rate and then quickly open up a new internet browser window and check the company’s direct website for the same dates and time. Whichever one is cheaper, I would book. If they were both the same, I would go with the car rental company directly…. Generally, you don’t have to pay for the rental in advance which means I can have a car reserved, continue to check Hotwire up until the pickup and if I find a cheaper Hotwire rate later, I can book it and cancel the rental car company car that I’ve already booked… because I haven’t paid for it in advance.

  • Abhi

    I think the reason for mediation would not be the $10 difference but the explanation about concept of getting a better deal on Hotwire than other places. I would say Hotwire is doing itself a disservice by proclaiming that they do not guaranty their product to be the best in the market. It looks like it’s advertizing against it’s core marketing point. OP can certainly help spread the word around for Hotwire.

  • Arizona Road Warrior

    “Car rental prices may be lower on Hotwire, but there’s no guarantee.”
    - – - – - – - – - -
    Hotwire doesn’t have a guarantee on its website that they have the lowest prices.

    I have used Hotwire one time for a car rental. I was flying in a day after my team arrived and I didn’t want to take taxi or a shuttle service to the customer job site. I checked the rates directly with the rental car companies and they were $ 80 per day before taxes and fees (SNA Airport).

    I went to Hotwire. First, the names of the rental car companies were disclosed (which made me comfortable that I wasn’t renting from Wreck-A-Rent, Midnight Auto Sales, etc.) and their location (therefore I could confirm that it was an actually on-airport location…not a 20-minute shuttle ride to the rental location). The rate was $ 16.00 per day (taxes and fees were included in this rate) for a full-size car. The rental car company was Enterprise. I was upgraded to a Lincoln Town Car when I picked up my rental.

    Since that rental, I have went back to Hotwire a few times to check on rates to avoid taking taxis or shuttle services. The rates were the same or even higher than the rates on the rental car company website so I ended up renting directly or taking a taxi. Most of the times, the name of the rental companies were not disclosed.

    I just went to Hotwire a few minutes to check for car rental rates at four airports. All the rates (before taxes and fees) were different. My corporate rate was lower than the Hotwire rate at 3 of the 4 airports. My AAA rate was lower than the Hotwire rate at 2 of the 4 airports.

    Research before you book!!!

  • frostysnowman

    Perception is not reality. Mr. Rios does not deserve any type of refund.

  • Chicky

    I’ve booked with opaque sites, but only after I’ve researched the prices. For a car rental, I know that Hotwire and Priceline both deal with the reputable companies, and I don’t really care where I get the car from, as long as it’s from one of the bigs.
    When I flew to Denver in 2007, it was for pleasure. I knew I’d be taking the trip, unless a family emergency cropped up. I bid on a car through Priceline and got a good deal on it. This was a good option because cars at DEN are more expensive than they are in town, but you almost have to rent at the airport because it’s 30 miles from town, and when I turned in the car, I didn’t want to have to pay a big cab fare, which would have probably negated the savings on the car.
    So, I did the Priceline thing and got a nice Camry from Avis. Worked out fine. BUT, I’d never just assume Hotwire, or any site, had the lowest prices without checking around, first.
    And I’d never book a hotel or flight through either place, since I want to choose when I travel and where I stay.

  • BucksterSF

    “Hopefully, Raymond will consider shopping with us again when booking in the future.”

    Thanks Hotwire, for my morning chuckle.

  • http://frequentlyflying.com Darren

    I follow Chicky’s method and while I have used the opaque sites in the past, have done so only after I’ve done my due diligence in checking published rates across the board.

    I have to agree with Hotwire’s response, too, in that availability and pricing in the travel industry is incredibly dynamic and it would be nearly impossible to replicate the pricing Raymond received directly on Budget’s site.

  • jacqui

    @arizona – I have to respectfully disagree about southwest, I can never seem to get a 39 dollar each way fare from any other airline. I just got the offer from san diego to denver, and I have used the same fares before to go from san diego to the bay area. Sure beats driving anyway. I have seen the cali rates at 29 when it isn’t peak season.

  • Arizona Road Warrior

    @ jacqui – I have been traveling for business for over 20 years (averaging 80 to 100 flights a year). Over the years, some clients wanted to book my airline tickets. They wanted me to fly on Southwest because Southwest has the “lowest” fares. Every time, I submitted screen shots showing that the fares on legacy airlines were lower plus the convenience of having a shorter travel time (direct flights instead of connections). For example, in August 2009, the lowest fare (more than 2 weeks out) for a Southwest flight from PHX to BWI was $ 80 higher than the fare on US Airways.

    Southwest has low fares in some markets, has special fares from time to time, etc. but they do not have the lowest fares in all markets all of the time. It is like Wal-Mart (who changed their tagline of “always the lowest price”); their prices are not always the lowest. It is branding and marketing…for years, Wal-Mart and Southwest advertised that they had the lowest prices\fares. The general perception among the public is that they have the lowest prices. In reality, they don’t always have the lowest prices\fares. It is no different for these opaque websites, the savings are not always 40% to 80%…sometimes, you can get a lower fare\rate\etc. booking directly with the travel provider.

  • Chris in NC

    At the risk of sounding harsh… umm DUH!

    Rental prices are extremely volatile. I’ve seen changes from $400 to $120 for a week’s rental and then back to $400 in a 24 hour span. Even with potential savings, I rarely use opaque sites for the reasons AZ Road Warrior mentioned.

    I can’t help but wonder how much time and energy Mr Rios spent chasing down the $10 difference. Is that really a good use of his time?

  • Chris in NC

    @ Jacqui

    Southwest does not always have the lowest fare. However, they do allow 2 checked bags for free. Elite flyers on the legacy carriers are allowed complementary checked bags as well as other perks. So, it always helps to do your own research.

    We fly WN because they are the only airline that flys RDU/DEN non-stop. Earlier this year, we paid an extra $50 each way to fly WN versus DL or AA, because frankly, non-stop is better, especially in winter when weather is unpredictable.

  • bill muto

    We booked a package (flight and hotel) to Cancun last Spring through Travelocity and got what we thought was a good price compared to other travel sites. A few days later we saw the identical trip (and it has to be identical, hotel, dates, airline and flight schedule) at a lower price by nearly $300. We contacted Travelocity as they advertise matching a lower price if the same package is seen on ANY web site. We wondered if this included their own site and turns out it does. After a few bureaucratic glitches, we eventually got the positive response we hoped for and got the discounted rate plus a $50 credit toward our next booking through them. Needless to say, our bookings in the future will be through web sites that offer the same guarantee and information up front regarding trip specifics, i.e. hotels, flights, etc.

  • bodega

    The assumption that because a price is on the internet means it is the cheapest is not true and many are finding this out the hard way.

    When a fare comes into the market on a certain routing, most carriers match the carrier that placed the lower fare for sale. WN often starts a sale fare and many will immediately grab the allotted sale fare on the various flights. Knowing what other carriers fly in that market will often help you find that fare as long as you don’t wait to book. Each carrier only allows a certain number of seats at any fare. So when the lowest gets sold out, the pricing increases to the next level. I have heard many people comment that WN wasn’t as low in price as say UA. However, they just don’t understand how inventory and pricing works. That is the one main drawback to looking on line.

  • Carver

    @jacqui

    I can confirm Arizona’s experience. I can attest that AA.com routinely has cheaper flights from SFO to LAX than Southwest. I ‘ve gotten the round trip, with one day’s notice, for as little as $29 each way.

  • David Z

    Would be nice to get a partial refund from Store A for a cellphone I bought that’s sold cheaper at Store B…oh wait, a TV too…no, hold on, a DVD player…the list goes on and on. I’ve been made aware some stores do that, but not all.

  • http://nmdfreelance.com Nancy

    I won’t use the “opaque” sites for anything but to find out who is doing the most business in a particular location.

    I prefer the comfort of knowing someone/a business has accountability if things go wrong. I also tend to give my business to a small number of companies.

    I fly Delta (though this will change once the Southwest/Air Tran merger goes through) and when I have a problem, they can look at my Sky Miles account and know I use them.

    I rent cars through Budget. If there’s a problem, they can look at my account and see I use them regularly.

    Spreading your business around works in theory that you are saving money but it doesn’t help when you say, “If you don’t help me I’ll take my business elsewhere.” There’s no impetus for them to help you because you’ve ALREADY taken your business elsewhere.

    Orbitz, Travelocity, et al, have no vested interest in helping you out because they have 10 million more just like you.

    Always do business with the business, not their representative.

  • Mike Z

    Most normal people check the operators site before going through the onlinecheapprice.com places. At least if you check the company site first you will know exactly how much you are saving or overpaying. Also, I have found that in almost every circumstance, when I have tried to book hotels, that hotwire or similar sites are only a few bucks cheaper a night, if even that. Some places have e-mail members clubs that send you special promotional codes that work better. In all, when I am looking for a room/car, etc, i check the on line places to get a general idea of what is in a specific location and if I like what I see, then I go to that property website and call them direct. I nicely ask what type of rate I can get because I would rather book directly. Normally I always get a cheaper rate with limited cancellation penalties.

  • The Good Doctor

    What’s the problem?!? He got a car for the price he was willing to pay – $87. Too bad if he happened to stumble across a lower price later. Shame on him for not booking directly and for assuming a lowest-price guarantee through an opaque booking agency. But thanks for an interesting story though!

  • Deb

    I always check http://www.carrentals.com before I book a rental car. Then once I have picked out the best car for my needs, I double check it directly with the company. I hate opaque sites and just don’t want to leave that much to chance.

  • Kevin M

    @Arizona & Carver:

    You’re correct that Southwest is not always the cheapest option, and that often it requires a change of planes to get from A to B. However, “not always” is not the same as “is not” – the latter categorically excludes any chance that Southwest could be cheaper.

    You’ve cited that 2009 fare so many times ad nauseum, AZ, that I have to wonder if you’ve ever priced any other city pairs at any other time for comparison. You fly from a city (Phoenix) which has an enormous airport serving as both the primary hub for US Airways (from its America West heritage) and a major “mini hub” for Southwest. This gives your airport the advantage of the Southwest effect – which pushes down airfares compared to airports not served by them – as well as allowing for an even more aggressive response by USAirways to protect its base.

    In addition, being USAirways’ home naturally means Phoenix will have lots of non-stop flights on that Airline, just as Atlanta has lots of non-stop Delta flights, Dallas has lots of nonstop AA flights, and so forth. Move to any city which is served by Southwest, but which is not a hub for a major airline, and you’ll likely find more non-stop flights on Southwest than any other airline – because all those other airlines shuttle everyone to their nearest hub, even if that’s flying in the opposite direction of travel. And even if there’s a single stop and change of plane on Southwest, it’s likely that (A) the turnaround time at the airport is likely to be shorter, and (B) the flights are almost certainly moving “in the right direction” of your final destination.

    It’s true that other airlines offer things like elite flier upgrades to first class – or they used to; it seems that everyone’s complaining that they can’t get or use those any more. Most business travelers, true, don’t use checked luggage, but for those who do, and leisure travelers, two free checked bags roundtrip can negate a lot of fare discrepancy.

    You make unsubstantiated statements like higher fares being “the reason why Southwest doesn’t allow its fares to be included in any fare search engine” with no evidence to back up that allegation. Southwest has repeatedly stated they prefer to drive booking from their own website, hence they decline to participate in such sites. Given how many people complain on here about Orbitz/Expedia/Travelocity/Hotwire/Priceline/whoever hiding things in fine print and tacking on fees by pre-checking opt-in boxes for extras, I can’t say I blame Southwest; their customer base seems to appreciate the clarity and simplicity of their booking process.

    They are not for everyone. People who turn their noses up at having to sit in coach shouldn’t bother. People who want to play the F-class upgrade lottery shouldn’t bother. People who want to cling to the illusion that flying a legacy carrier, even in coach, is somehow a better experience than the so-called “Southwest bus” shouldn’t bother.

    But everyone else should at least compare the prices when booking, and I suspect most will find that, in MOST cases, Southwest is as cheap or cheaper than any other option. That’s a statement that would be impossible to make about any other airline.

  • Andy

    I was just chatting with a Hotwire rep who told me that if I can find a lower rate within 48 hours of making a booking on Hotwire, they will match the rate. So hotwire should have refunded him the difference