Online hotel bookings: It’s hard to dance with the devil on your back
The world of hotel booking has changed immeasurably from days of having a brochure sent through the post to booking anywhere with the click of a mouse or tap of a finger. Online Travel Agents (or OTA’s as they are referred) have not only made it easier for customers to view hotels and compare rates in one place, but hotel marketing departments have a much easier job too. By listing on popular OTA sites they are beamed to the world in return for a commission, or share of the revenue generated from those room nights booked.
Commission ranges from 8% to 35% of the total booking value. But hotels reliance on this “easy business” has bread a greedy OTA industry intent on providing top listings to hotels who pay the most money (20%-30%), not provide the best service or a better hotel alternative.
Some of the more popular booking websites are beginning to be resented by hoteliers because of the high cost of the booking and their unfortunate position of now being reliant on these operators filling up a good percentage of their hotel. The hotel’s reputation can also be harmed by being seen as a discount brand and some hoteliers are refusing to work with them.
More smaller bespoke websites concentrating on hand selected quality alternatives are popping up all over the place and providing much better value for money for business and leisure hotel booking travelers. They also provide a better quality customer to the hotel who in turn will spend more money on hotel services like room service or bar and restaurant, because they are better matched to the hotel. They are actually booking a hotel which suits their requirements.
Hotels don’t want customers who fill the mini bar up full of bread and milk and do not spend money in the hotel. Combine this with a 25% cost to acquire the customer and it is not a sustainable business model for the hotel.
Hotels often spend millions on creating an atmosphere and experience t be enjoyed and appreciated. Filling this full of the wrong customers who do not appreciate it is just not good business sense.
All hotels now sign agreements with online agents to provide what is known as “rate parity”, meaning equal to the lowest rates in the marketplace. So, most online agents are offering the same rates anyway. Therefore the difference is in the selection and service provided by that website, allowing customers to get better service and often a better room or added value.
The hotels perceive a customer coming from these biggest, so called, discount sites, as a poorer customer. Someone who got a deal so should complain less. Where as they are paying the same as everyone else, but many times just given lesser standard rooms and no added value.
On TripAdvisor a customer wrote that the awful rooms they were booked into was probably because they booked through this particularly well-known discount website.
Sites like www.hotels.tv were created to hand select hotels and provide equal or lower than the best rates available. This site has agents (franchisees) actually based in the destinations creating relationships with the hotels and often customers. This provides for better hotel choices, better rates and rooms because of the hand selected and relationship nature of the business. Many presenter-led videos can also be found to help represent the hotels. The agents also provide a hotel room and meeting room finding service taking the pressure off PA’s and office managers looking for accommodation for colleagues and customers.
By Harrison Brown