Alpharooms Prices - Too Good To Be True?

Many people have been booking their trips with >> Alpharooms << recently due to their current incredibly low prices. Gowick did some research and found that the date range for this silly season price is:

Not surprisingly folks have been asking both here on the forum and directly to me via PM and email whether the prices are just too good to be true and will they get screwed over. Rather than keep on answering individually I thought I'd write this to refer people to in future.


Alpharooms the Company:
Alpharooms are a UK company that have been in business for over 13 years and currently employ over one hundred staff. Although they may be an unfamiliar name in the US and Canada, in the UK they are fast increasing their market share as a leading independent travel agent. I was surprised to see them running TV commercials on my last trip home.

Recent commendations include:

• Nominated for 'Best Online Hotel Booking company' and ‘Best Flight Booking company’ at The British Travel Awards 2011.
• alpharooms.com reached number 20 in The Sunday Times' Fast Track 100.
• Which? Magazine (Feb 10) stated "alpharooms.com had the best average saving" when comparing prices on the 10 most commonly used booking websites.

Alpharooms.com about us, company information

So you can see this is not a fly by night company that will be here one day and gone the next.


So, how do they do it so cheap?
I had a few chats today with people in the know and learned a little more about how the hotel industry works.

There are thousands of websites and travel agents out there where you can book Temptation. Temptation does not have a contract with each one individually, instead there are a handful of big players like Expedia, Orbitz etc and then contracts with travel wholesalers. Hotelbeds is an example of one of the bigger wholesalers. What the wholesalers do is buy thousands of nights at once in bulk at a discount rate and then resell them off to independent agents such as Alpharooms. Every so often the wholesalers will re-evaluate their inventory and make a forecast as to whether they have enough, too many or too few rooms.

The popular theory in this case is that a large wholesaler re-evaluated and found they have too many low season Temptation rooms in hand that they don't think they would sell. Perhaps with uncertainties over the US election and a weak economy they expect low season to under perform their initial expectations. Remember these rooms have already been paid for so the wholesaler could hold on to them, risk not selling them and make a loss or they could cut the price drastically and 'dump' them on the retail agents, and make a smaller loss. The retail agents would then run the risk of not selling them.

I think that Alpharooms already know that Temptation is one of their single best selling hotels (largely through sales from here) so they saw Temptation rooms available dirt cheap on the wholesale market and bought them knowing that they would probably have a good chance of selling them.


So who is happy and who isn't:
Well, this is largely my own conjecture, so make of it what you will.

• The consumer is happy (you guys) because you get a great rate

• Alpharooms are happy because even though they are selling cheap, you can bet it is more than what they paid for them. They also gain upsells on things like travel insurance and airport transfers (hint book transfers through USA Transfers instead it's cheaper and more reliable). Plus they increase their brand recognition.

• The wholesaler is happy because they make less of a loss on the rooms than they may have done.

• I'm happy because it means you guys get a great deal that you found here which helps the reputation of the site. The fact that people will be taking an extra trip that they might otherwise not have done means the forum will be busier in the months prior, and I also get a 5% referral fee on each sale booked via cancuncare links - hint see my signature!

• The hotel probably have mixed feelings. Remember, they have already been paid the proper rate so they wont lose money - the wholesaler or retailer will. They would much prefer a fuller hotel than an emptier one - think upsells again, tours, buying stuff at the gift shop, currency exchange etc. It may cause problems with their other suppliers though, so I would be surprised if measures weren't put in place to ensure this doesn't happen again.

• Premier probably have mixed feelings. They wont be happy to see non members getting prices cheaper than members. But imho their offer of providing all the membership benefits to members who book through alpharooms was genius PR, and shows that they are once again putting members interests first. Better PR for them is going to help them sell a lot more memberships.