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Booking.com, however, has managed to grow its share without much resistance. Booking.com is now the place where you will find most of your distribution eggs, despite the fact that many channels have not yet appeared and we don't know if they will activate this season. Booking.com has been working hard over the past year to capture a significant share of the market, and many hoteliers may have contributed, more or less knowingly, to this effort. What is the secret to Booking.com's success? This post will examine some of the OTA's practices and show you how to compete. Online Payment: How Booking.com follows Expedia's lead. Booking.com's virtual cards and online payment have been hot topics for the past five years. Many hoteliers decided to activate Booking.com's online payment model for a non-refundable charging model. This allowed them to take advantage of the desire to cash and to make it easier to charge customers whose cards weren't accepted by the hotel. However, this model was subject to a significant (and additional) commission. This was a brilliant idea that saw Booking.com allow its customers to cancel non-refundable bookings unilaterally. All the cash went away. This is a warning sign of what might happen in the future. Hotels can also use Booking.com's Online Payment to make refundable or non-refundable prepayments and get some cash. This is music to our ears. This is actually a sign that Booking.com has moved to the merchant model. They charge the booking and have the ability to lower prices, playing the old game net vs final prices. Booking.com's Online Payment model will allow you to get more attractive rates if they have a margin. You can add a second program to your OTA pricing if you think Booking.com Basic is already causing problems with your pricing. You are making it easier for Expedia, Hotelbeds, and other bed banks to set your prices. Is this the right decision? Preferred Plus: Stronger, more expensive, and higher. Another feature that the pandemic introduced was the ability to join the Preferred Plus program. This option is only available to select hotels according to Booking.com. Booking.com has not sold us a programme that is exclusive or limited before. Genius was also created in the same vein, with only the most discerning customers. Genius prices are available on the website of all third parties. You don't even have to register to view them. It sounds great, but it isn't until you take a closer look at the Preferred program. Booking.com promises a 74% improvement in visibility over Preferred as well as up to 30% more bookings. Booking.com claims that the traffic you'll get is low-quality (+174 % in traffic, versus +30% for bookings). The OTA doesn't explain how visibility of hotels is affected or how they plan to improve it. Hotels that aren't preferred appear higher than hotels that participate in either version of the program. Booking.com will credit customers who book at your hotel and then book another hotel through the OTA. This is a great plan for Booking.com, but not for you. Booking.com's Preferred Plus program will increase Booking.coms margins and allow it to compete with your direct channel. This is a risky move as Booking.com could move loyal customers away form your direct channel. Also, the OTA may offer better prices than yours. Booking.com will not reveal which bookings were generated through increased visibility. The commission increase will also be applied to all Booking.com sales. This means that you cannot determine if the increased costs are worth it. Even if you believe Booking.com's claims, the numbers don't add up. What if you were to pay 42.53% commission for each additional sale? This is exactly what you would do if you joined the Preferred Plus program. Genius rate sharing: The globalization of your opaque pricing Most hotels have been notified over the past few days that their Genius rates, which are becoming increasingly transparent, will be available on booking engines of their affiliates and partners (agencies or other OTAs), etc. This news is coming after Booking.com expanded its special pricing program to all customers. The latest news states that your prices will be available automatically on the following channels: Booking Holdings Group (Priceline and Agoda), etc.Search engines for corporations, such as those offered by com partnersSearch engines like Google, Kayak, and Trivago. In other words, if your actions are not taken, your hotel's Genius rate will be available to all members of the Bookings network. An example of this is: Lastminute.com customers book hotels at a discounted Genius rate. The booking is made through Booking.com and instructions are provided for online payment. Booking.com loses all price traceability and becomes a middleman. This is hard to control. Genius offers discounts of 10% to 20% on all three levels. These rates are now available. This is a clever and sophisticated change from the original concept behind Booking.com genius. The general contract changes Undoubtedly, this was one of the changes that many hotels didn't notice and it shows how Booking.com works in times of crisis. Booking.com sent customers at the end 2020 a modification to its general terms and conditions, also unilaterally. It emphasized the clauses that relate to parity with direct channels. While this is not new, it is important to highlight 3 points. They don't apply to prices sent to other OTAs. Booking.com is aware that direct sales are its competition and wants hotels to be protected.They warn that they will reduce the RRP for Booking.com online payments bookings as an incentive, and will pay the cost.Hotels in large parity or nonparity are exempt from all parity clauses. There is still hope for the future. Booking.com was the best online hotel sales platform during the pandemic. There were few competitors. These new clauses allow Booking.com to protect its intermediary model, which redistributing rates throughout its network and using an agency payment model. Booking.com offers risk-free reservations. Booking.com uses any argument in its best interests, regardless of how absurd, as a standard practice. The high number of cancellations at the flexible rate is the one thing that all hotels agree on with Booking.com. This is in addition to the uncertain markets, price swings, and current conditions for trying and maintaining customer demand, which all contribute to a high volume of cancellations. Booking.com decided to revive its Risk-Free Reservations (or Hold my drink) program in this setting. This program has been around for a while, and we covered it in detail in 2018. Booking has now unilaterally activated the program in many hotels. If your hotel was automatically activated, you can deactivate the program (and other interesting options that you should consider) via the Booking.com Extranet. This premise is interesting, as it seeks to make sure that Booking.com bookings get paid for due to the high cancellation rates (though the program states that it is rarely used). The hotels had previously published non-refundable rates to protect their revenue. What is this program really all about? Booking.com decides unilaterally what you do with your prices, conditions of sale (dumping or policy relaxation).Booking could take away a lot of your sales. If the customer knows the hotel they want, it becomes a battle between channels. Booking will have the sword, while you have the fork.Most of your Bookings sales will be flexible, even if your price parity is not.Booking.com will not pay the full amount if a room is unavailable.Your website will not only be priced lower than Booking.com, but also has a cancellation policy. This could mean that all the hard work you have done over the past months can be lost. You can find a way to increase sales on your website without having to change your pricing. It will also help you maintain control over your inventory. Booking.com customer loyalty: The ultimate goal booking.com has been encouraging various actions to build loyalty with its customers (yours). We will only be looking at a few of these. This club is funded by hoteliers. It gives Booking.com an advantage over other loyalty programs that could strengthen your relationship with your customers. We have seen some examples recently: Credit for future reservations: Discounts and promocodesFree taxis It is more efficient to draw on existing demand rather than generate new. This has been our belief since the beginning. Many hoteliers don't see the value in investing in their own programs or offering attractive customer benefits through their website, while subsidizing those offered by third parties. Booking.com understands the importance of customer loyalty, which it will always protect above hotels. However, it also knows that hotels are essential to its growth. We have seen a variety of actions to encourage hoteliers to sell more on Booking.com. For every 200 registered guests you refer, Booking.com will save commissions. You will receive discounts on your commissions during summer (which has already increased if you accept their Preferred Plus program). What does this all mean? Booking.com will give you a volume discount if your sales targets are exceeded. The 30% discount applies to the difference between total sales and sales targets for the respective months. It is worth noting that Preferred Plus only applies to the total, and not the increase in sales. Although a discount on the commission sounds great, there are two conditions to joining the program: 10% mobile discountActive Flexible Rate Booking Holdings published Q4 2020 results that showed that 2/3 of all rooms were booked via a mobile device, especially on the app. We can therefore assume that 66% of sales could have been made using a mobile discount. Our mobile rate is now the BAR, or the price that everyone can access. We have already decreased it by 10%. You will need more stays to reach your goal, and your ADR and revenue will suffer if you sell more via the mobile channel at lower prices. It is not about how much I can save by signing up for the program, but how much it will cost me to be a member. You will see that Booking.com is the only program that really pays off. There are simple solutions. We have previously discussed some ways to increase your direct sales following the pandemic. Many of these actions can be applied to today's topic. You are the only one who can manage your relationship with Booking.com, and how they control your prices. You can increase your direct sales share online and through other channels, which will allow you to gain control of your inventory as well as increase your hotel's revenue. We recognize the fear of these steps and offer different levels of recommendations. Desired: Book only on Booking.com's Pay at Hotel model. Your website should offer the best sales conditions possible (mobile discount, differential etc. A good loyalty program and exclusive values. Favorable: You can deactivate the Online Payment option to prevent Booking.com dumping your RRP. You can restrict the distribution of your prices through third-parties (you can limit this option in the extranet under the Genius Choose Your Customers section). You can increase loyalty among your customers by keeping the Genius program. You can decide whether Booking offers you an incentive to compensate you for your direct sales. Minimun: Booking.com should not allow you to take any action without reiterating it on your own website. Booking.com is aware that we are living in an era of uncertainty and a shift in the way people shop online in the aftermath of the pandemic. It has not hesitated in using its most powerful artillery to help hoteliers in a time of crisis and fight for its survival and growth. This has resulted in a significant rise in channel number in the hotel channel mix. In most cases, this channel is the undisputed #1, giving it more power to dictate conditions for hotels. You can understand the temptation to do everything possible to get out of the current crisis and generate as much sales as possible. You must keep your head down and look at the numbers. Small actions that have a lower investment in direct channels can result in a higher return. You can find many interesting tools on Booking.com. However, you can also deactivate them when the numbers don't add up. You can adjust the relationship with Booking.com to suit your needs, without it driving your hotel sales. It also takes actions for you that you can take at a lower price. Our goal is to increase your direct sales while you maintain commercial independence and reduce costs. This goal is what we strive for every day. www.mirai.com
