Over at WebmasterWorld a member was suggesting that contacting hotels directly leads to the lowest price for a room. Not true. There's no magic bullet site online for cheap rates, you need to surf around and may often find a "consolidator" that is cheaper than the hotel itself. Hotels.com, Travelocity, and Expedia are major consolidators and there are hundreds of smaller ones. In Europe, for example, Venere may find you a cheap room.

Example: Last week I used a small flight consolidator called cheapseats.com to book Delta to Boston and paid about $100 less than the cheapest fare Delta had online at the same time.

This situation is common in travel because pricing is very market driven and surprisingly inconsistent both for flights and hotels.

As a travel publishing guy I know how some of the deals are cut and it's a very sloppy and counter-intuitive process where some consolidators will force properties to sell them blocks of rooms far below rack rate in exchange for a guarantee of selling those rooms. Hotels.com is notoriously unpopular as the top consolidator because they tend to squeeze great deals from properties in exchange for guaranteed volume and lots of bookings. Good for consumer, somewhat hard on profit margin for the properties.

If, at the last minute, the consolidator has a lot of rooms left they may sell them at rates far below what the hotel will charge if you call them. You especially see this in places like Vegas and big cities with Hotels.com. During a November Vegas trip I got the Hilton through (Travelocity I think) for about $55 which I think was under their own website rate, though during a March trip I found the best price for Oriental Palace at their own site – a fantastic $65 nightly for a nice room in the middle of the strip plus some buffets.

All that said I think the hotels are getting smarter and some provide a low price guarantee at their own websites, so you are certainly right that you should check the hotel site as well as other places.