A female hotel receptionist in a black and white uniform is serving and explaining how hotel booking websites work to guests

Why Most People Misunderstand How Hotel Booking Websites Work: Direct vs OTA Third-Party Explained

Over the years the hospitality industry has gone through a massive transformation mainly due to advancements in technology. The days when travelers relied on traditional travel agents or called hotels directly for bookings are long gone. Nowadays there are hotel booking websites that provide a wide range of options with just a click catering to the specific needs of every traveler. But do you know that while some travelers remain loyal to direct hotel bookings, believing it gives them a more personalized experience or better rates, there’s a growing trend leaning towards third-party websites? 

Even though these websites are becoming more common, many people still have misunderstandings about them. One common question that often arises is how hotel booking websites work. Many people perceive them as catalogs but in reality, they are complex systems driven by sophisticated algorithms, real-time data integration, and analysis of user behavior.

What is a Hotel Booking Website?

When planning a trip, many travelers, perhaps including you, have turned to hotel booking websites to find the ideal place to stay.

Then, what is a hotel booking website? It’s a site that provides real-time updates on room availability and prices. As you browse, the data is continuously refreshed, ensuring that what you see is always up-to-date. This accurate, real-time information prevents the disappointment of trying to reserve a room that’s already been booked.

Where are they usually implemented? You might encounter hotel booking systems in two main places:

  • OTA (Online Travel Agents): Websites like Expedia or Booking.com are OTAs. They list a wide range of hotels, giving you plenty of choices. They’re a favorite for travelers looking for comparisons and options.
  • Hotel’s Personal Website: Some hotels have their own booking systems on their websites. They aim to offer a direct and personalized experience, often with exclusive deals or packages.

In general, hotel booking websites serve as a link between travelers and potential lodging options. However, labeling them as “middlemen” doesn’t capture their full scope. It’s not about displaying rooms anymore. 

One significant advancement is the integration of user reviews. This feature has transformed the booking experience. By showcasing feedback, experiences, comments, and ratings from previous guests, these platforms offer deeper insights that foster trust and transparency. 

Many people think of these reviews as advice from fellow travelers, guiding them towards accommodations that best match their preferences. 

With this wealth of information presented in a user-friendly manner, the decision-making process becomes far less daunting.

How Hotel Booking Websites Work with Hotel Reservation Systems

A hotel receptionist with long black hair wearing a navy blue blazer is smiling broadly as she hands the room key to a guest

We know that It’s quite fascinating how quickly you can find room availability and prices on hotel booking websites. 

Well, that’s the result of seamless Integration between Hotel Booking Websites with Hotel Reservation Systems!

When you input your travel details, such as location and dates, the website’s algorithms get to work. They communicate directly with hotel reservation systems, accessing their inventories to display options that match your search.

To make it easier to understand, think of it as a real-time dialogue between the booking platform and individual hotels’ reservation systems. For instance:

  • When a traveler books a room through the website, the system immediately informs the hotel, updating its inventory.
  • Conversely, if a hotel modifies room availability or rates, these changes are automatically mirrored on the booking website.

This continuous back-and-forth ensures that the information you see is always current, which dramatically reduces issues like overbookings or outdated rates.

So How Do Hotel Booking Websites Work? 

Hotel booking websites, at first glance, might seem straightforward: you input your preferences, and voila, you get a list of available hotels. 

But behind this simplicity lies intricate processes on how hotel booking websites work : 

User Query Processing

When you type in your travel details—such as destination, dates, and number of travelers—the website processes this query to narrow down the potential list of accommodations.

Communication with Inventory Systems

After understanding your query, the booking site communicates with various hotel reservation systems or global distribution systems (GDS). These are massive databases that contain real-time data on hotel room availability, pricing, and other details.

Algorithms and Filters

With the raw data from hotels, algorithms then filter and rank these options based on numerous factors. These could include user preferences (e.g., non-smoking rooms, pet-friendly, or proximity to landmarks), room rates, promotions, user reviews, and more.

Displaying Results

The curated list of options is then displayed to you in an easy-to-navigate format. This often includes pictures, descriptions, ratings, and, of course, prices. Advanced sites might even provide map integrations or virtual tours.

User Reviews and Feedback

Many booking sites integrate user reviews and ratings. This not only aids travelers in making informed choices but also influences the ranking and recommendation algorithms.

Booking and Confirmation

Once you’ve made your choice and initiated the booking, the website communicates in real-time with the hotel reservation system to ensure the room you’ve chosen is available and to reserve it for you. Post this, you’ll receive a confirmation, usually via email.

Post-Booking Services

Modern hotel booking websites go beyond just reservations. They might offer additional services like reminders, travel guides for the booked destination, transportation options, or even activities and events in the area.

Data Analytics

On the backend, these sites continuously analyze user behavior, searches, and bookings. This data analysis not only helps in refining the user experience but also aids in personalizing offers and recommendations for repeat users.

Unpacking How Third-Party Hotel Booking Makes Money Using Revenue Models

A female advertising manager with long ash silver-gray hair is explaining how hotel booking websites work to clients in a meeting room

To really get how hotel booking websites work, you need to look at how they make money. While you might think they mainly earn from commissions on bookings, they have a variety of ways to bring in revenue.

Yes, they do make money from commissions. Every time someone books a room, these sites get a piece of the amount—either a percentage or a set fee. It’s a win-win: hotels pay only when they get a booking, and the website earns when they help make that booking happen.

But there’s more. Hotels can pay extra to be featured more prominently on the website, like at the top of search results or on the homepage. This kind of advertising is another way booking sites earn money.

Plus, because these sites have lots of users, other industries want to team up with them. Think about it: if you’re booking a hotel, you might also need a flight or a rental car. So, hotel booking sites partner with airlines and car rental companies. When you book one of these services through the site’s suggestions, the site earns a bit more, either as a commission or a referral fee.

Read more: 7 Powerful Ways to Use Customer Data to Skyrocket Your Hotel Revenue

How Hotel Booking Sites Use Google Ads and SEO

Google Advertising

When travelers plan their trips, they often start with a search engine. They might look up “beach resorts in Bali”, “budget stays in Paris”, or “tips for visiting New York”. And that’s where Google Ads becomes vital for hotel booking websites.

Imagine someone starts typing their travel query. If a hotel booking site has set up a Pay-Per-Click (PPC) campaign with Google online reservations, it can show up in the search results. But it’s not just about being visible. Google Ads ensure that the ads shown are relevant to what the searcher is looking for. So, someone dreaming of a beach vacation might see ads for beach resorts, while a backpacker might get options for affordable hostels.

But Google Ads does more than just get that first click. If someone visits a hotel booking site but doesn’t book right away, retargeting campaigns can remind them of their earlier search. This keeps the booking site on the traveler’s mind, from the moment they start planning to when they’re ready to book.

Read more: Google Hotel Ads Guide: A Comprehensive Guide For Hoteliers 2023

Search Engine Optimization (SEO)

a hotel receptionist in a hotel uniform with a name tag attached happily explaining how hotel booking websites work to a blonde female guest. 

Understanding how hotel booking websites function is just the beginning. In today’s digital age, standing out among numerous online options is the real challenge. When travelers look for accommodations or plan trips online, they’re flooded with choices. It’s a misconception to think that just having a website and understanding online reservations is enough.

To truly grab a guest’s attention, your platform needs to show up prominently in search results. By tailoring your website to match what search engines look for, you can improve many elements – from content and structure to technical aspects. I’ve aimed to maintain the core message while making it more reader-friendly and integrating online reservations

Read more: 7 Actionable Tips to Boost Your Bali Hotel or Villa Business with Local SEO


Diving into the workings of hotel booking websites unveils a complex yet user-centric ecosystem. These platforms effortlessly meld vast data, real-time room availability, user preferences, and sophisticated algorithms to cater to every traveler’s unique needs. Yet, like any system, misconceptions persist.

By partnering with these platforms, hotels not only broaden their customer reach but also tap into various market segments, leading to improved occupancy rates. Simultaneously, they gain valuable insights into traveler behaviors, allowing them to fine-tune their services and elevate guest experiences.

For travelers, a deeper understanding of these sites empowers them to navigate more effectively. They’re better equipped to make informed decisions, snag the best deals, and tailor their stays, all while trusting the platform’s authenticity and reliability. In essence, the rise of hotel reservation platforms represents more than just a digital shift—it’s a transformation of the entire travel booking landscape.

Frequently Asked Questions

As a general overview, hotel reservation systems normally allow guests to book the dates of their stay based on the real-time presentation of your rates and inventory across all booking channels and to complete their booking using an online payment portal.

Booking directly through the hotel will result in better customer care if something goes wrong during your vacation or stay. Because they didn’t have to pay a commission fee, hotels prioritized reservations made directly with them.

An online booking system is a software solution and reservation system that makes it simple for guests to book and pay for their tours and activities online. Some of these systems also include reporting software for tour operators and other user-friendly tools that help you improve efficiencies and boost bookings.

Navigating the world of hotel reservations can sometimes feel like maneuvering through a changing maze. User behaviors are constantly evolving, and the complexities of how hotel booking websites work present both challenges and opportunities, for businesses and travelers. In the days of the Internet simply having a presence was often sufficient for hotels or booking platforms. These platforms are no longer about showcasing hotels and prices; they now focus on delivering experiences leveraging real-time data and utilizing advanced algorithms to anticipate and cater to traveler’s needs. This complexity arises from an understanding and evolution of how hotel booking websites function.

From Google Ads to optimizing your booking platform, SATUVISION has you covered. Begin your digital transformation journey with us today!

Start Now

Share To

Other Category

  • Blog (220)