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Why Is Agoda So Cheap? [Agoda’s Competitive Edge]
Why Is Agoda So Cheap?
Whether you’ve recently heard about Agoda.com for the first time, or you’re already a customer, it’s likely you’ve asked yourself, “Why is Agoda so cheap?”.
In this guide, we’ll answer that question.
We’ll cover how the relationship between Agoda and its hosts is mutually beneficial, why hosts allow Agoda to sell their rooms at steep discounts, how having low prices is Agoda’s competitive edge in travel booking, plus a small “experiment” I ran to see if Agoda really does offer lower prices than hosts’ own websites.
*Agoda.com provides a wide selection of steeply-discounted hotel rooms. To see today’s deals on hotels in any destination, click here.
Table of Contents
Agoda And Its Hosts Agree On Rates
How is Agoda able to discount by 60% or more?
Agoda sometimes buys rooms in bulk (wholesale) from its partner hosts, then goes on to sell the rooms individually through its website/app. In these cases, Agoda is offering “sales” on these hotel rooms.
When Agoda purchases rooms in bulk, an agreement is made between the host and Agoda that dictate the price range Agoda can sell the rooms for. The range aims to ensure customer satisfaction. For example, if budget rooms are sold at luxury prices, or vice-versa, both the hosts and guests would likely be dissatisfied.
*To see today’s deals on hotels in any destination, click here.
Agoda Provides Exposure For Hosts
Marketing can be expensive for small businesses.
While some hotels have clearly permeated the public consciousness and remain relevant thanks to a strong brand name (like Ritz-Carlton, Four Seasons, Hilton, etc.), small and/or newer hotels typically do not have this advantage in their favor.
Marketing costs can prohibit smaller hotels from competing with these established brands in the local marketplace - meaning they will struggle to get their name in front of new potential customers. This is where online travel booking sites, called online travel agencies (OTAs), such as Agoda.com come into play.
Agoda is one of the major OTAs (online travel agencies)
Thousands of travelers visit Agoda.com daily. Many are loyal customers - ready to spend when they find a deal. By partnering with Agoda, a lesser-known hotel is put in front of many potential customers without incurring high marketing fees. The win-win scenario allows Agoda to add another listing to its inventory, while hosts leverage Agoda’s platform and customer base to get more traffic than they would on their own.
*To see today’s deals on hotels in any destination, click here.
Why Hosts Let Agoda Sell Their Rooms For So Cheap
Agoda.com is its own marketplace and ecosystem.
Some hosts let Agoda sell their rooms at a discount in order to gain traction within Agoda’s marketplace. For example, if a listing is priced relatively low with high value, it will appear higher in the search results when customers filter their search based on price.
This extra exposure should eventually lead to more sales and reviews. After the listing gains some positive reviews, that host could then increase the price and let it “compete” with other listings at higher price points.
Here’s an example:
Let’s say you’re in a new city and you need to book accommodation for the weekend. You’re searching for a place on Agoda.com, but you want to keep your costs low. You could either book a room with:
2 positive reviews and costs $100/night
OR
83 positive reviews and costs $120/night
Assuming all else equal, the $120/night room will probably win most times, due of the sheer number of positive reviews it’s accumulated.
However, if the $100/night room slashed its price to $50/night, it becomes much more enticing. The price drop would lead to more sales, which helps the listing accumulate much-needed reviews, which would allow it to compete with that higher priced listing later on.
Hoteliers sometimes drop their prices on Agoda.com when they’re unable to sell all their rooms (common during off-season). Hosts often have nothing to lose by discounting rooms, if they’re not already selling.
*To see today’s deals on hotels in any destination, click here.
Having Low Prices Is Agoda’s Competitive Edge
The online travel booking industry is competitive.
Since its foundation in 2005, Agoda.com strategically built its reputation as the place to go to find deals on accommodation. This reputation has allowed Agoda to maintain relevancy while competing against major sites such as Booking, Expedia and Kayak.
Regardless of what type of accommodation you’re seeking (Agoda has luxury and budget hotels, resorts, guesthouses, villas, hostels, apartments/homes, bed and breakfasts, and unique/alternative types), Agoda will prioritize displaying the best deals. As you see in this screenshot, Agoda promotes itself as the OTA with the lowest prices.
Agoda emphasizes its low, discounted prices
*To see today’s deals on hotels in any destination, click here.
Is Agoda Really Cheaper Than Its Competitors?
Sometimes Agoda.com sells rooms at a similar price as the host’s own website. Sometimes you’ll find better deals on other booking sites. With that said, Agoda’s results keep customers returning for many reasons.
As you see in the screenshot below, a listing’s standard price and discount price are displayed on the search results page. Additional information like reviews, the cancellation policy and neighborhood are also shown, to assist in your decision-making process. Conduct a price comparison on the site or across the internet.
Agoda provides important details to help narrow choices.
*To see today’s deals on hotels in any destination, click here.
Does Agoda Really Have Lower Prices Than Its Partner Hosts’ Sites?
Let’s Run An Experiment.
As someone who’s booked countless stays on Agoda for many years, I wanted to conduct an experiment to see if Agoda really sells rooms at a lower price than its hosts’ own websites.
I searched listings in New York City and Belgrade, Serbia. I compared Agoda’s price with hosts’ websites for 15 hotels in New York (5 budget, 5 mid-tier, 5 luxury) and 15 hotels in Belgrade (5 budget, 5 mid-tier, 5 luxury). These results are from the first 2 pages of search and only hosts with websites were included.
Results:
New York City
Budget: 4/5 listings had a lower price on Agoda than the host’s website
Mid-Tier: 3/5 listings had a lower price on Agoda than the host’s website
Luxury: 4/5 listings had a lower price on Agoda than the host’s website
New York City: 11 of 15 listings had a lower price on Agoda
Belgrade
Budget: 3/5 listings had a lower price on Agoda than the host’s website
Mid-Tier: 5/5 listings had a lower price on Agoda than the host’s website
Luxury: 4/5 listings had a lower price on Agoda than the host’s website
Belgrade: 12 of 15 listings had a lower price on Agoda
Takeaways:
In NYC, 11 of 15 listings costed less on Agoda than on the host’s website
In Belgrade, 12 of 15 listings costed less on Agoda than on the host’s website
In total, 77% of the time listings cost less on Agoda than on a host’s own website (for the same room).
Of course, while this does not represent all of Agoda’s hosts, listings or destinations, it certainly shows that browsing Agoda.com is worth your time if you’re looking for a deal on accommodation.
*To see today’s deals on hotels in any destination, click here.
Conclusion
Hopefully you found this guide helpful.
We covered the mutually beneficial relationship between Agoda.com and hosts, why hosts let Agoda sell their rooms at steep discounts, how having low prices is Agoda’s competitive edge, and a test to see if Agoda has lower prices than its hosts’ own websites.
After evaluating the topic from multiple angles, it seems Agoda is a worthwhile tool to book your travel accommodation. But if price is very important to you, cross check listings you find on Agoda.com with the host’s website and/or other booking sites. To learn more about Agoda, explore our other guides below.
Enjoy your travels!
Find Your Discounted Hotel On Agoda
For great deals on a wide variety of accommodation options (including luxury or budget hotels, resorts, villas, apartments, homes, guesthouses, hostels, bed and breakfasts, and unique/alternative types), use our secure Agoda widget below. Just input your destination and dates, then browse the results!
To go directly to Agoda.com, click here.
Learn More About Agoda
Common Questions & Concerns
Is Agoda Safe And Legit? [Plus How To Avoid Potential Issues]
Is An Agoda Booking Refundable? [Agoda’s Refund Policy Explained]
Get Started With Agoda
Post-Booking Questions
How To Cancel An Agoda Booking [Free Cancellation, Refunds, EasyCancel]
How To Change An Agoda Booking [Dates, Guest Name, Card Details]
Agoda’s PointsMAX Feature Explained [Earn Airline Flyer Miles]
Agoda’s Other Features
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