Why is it so much cheaper to order through Expedia than ordering directly through the airline and the hotel?

My family is planning a June trip to San Diego. The prices are so much cheaper to package them through Expedia or Priceline for airline, resort hotel, and renting a car. Why is it so much cheaper than ordering them direct? Is it not as safe as ordering them directly from the actual merchants?

Expedia and Travelocity work like large groups for a hotel. Since so many people use them, hotels give them a discount to these companies. The 3rd party sites (eg. Expedia) mark up the prices that they sell the rooms for and that is the price you pay. Hotels like them- because you can't cancel the reservations- so the hotel makes money even if you don't show up and so do the 3rd party websites.

Now, what they don't tell you... Hotels, have a hard time with these sites because:

The reservations come in for the wrong room types

Guests get upset and confused when they can't cancel the reservation

The number of nights cannot be changed

If you wanted to pay to upgrade to a suite- you can't

Many people who book through those sites tend to be the cheapskates and give hotel staff a hard time- being polite when a reservation was screwed up by the 3rd party site can occasionally land you with freebies (breakfast, 2 drinks, movie, etc.) Be polite and ask if the hotel can compensate you for the error. You may end up in the wrong room type, but a hotel will do its best to work with you.

What hotels do- if you are trying to beat the 3rd party prices, call the hotel directly. Most hotels will beat that price. But, please, don't lie about the price you found. The staff sees the rates for 3rd party sites- we have an idea as to what you're paying and if you lie the hotel won't give you a better rate.

Expedia buys in bulk, negotiating good rates with the hotels and passing on a bit of the savings to you. In reality though, you can frequently do as well or better talking to the hotel directly. Expedia will also frequently put restrictions on - e.g. no more than 2 in room, no refunds.

In terms of the airlines - it is normally cheaper to go through the airline than to Expedia due to fees.

Sometimes Expedia is cheapest, sometimes it's not... you should search other sites like hotwire, priceline, orbitz, and many more. Actually, if you want to search them all, go to http://BookMe.com and you can search all those sites from one location and be able to find the cheapest. It's where I always begin my search.

Because expedia is a network of charlatans that steal the services and resell them to you at a cheaper price. Just be warned you will be buying 'hot' products.

Because they are selling by volume and selling to millions of customers.