Last week we looked at Airbnb. However this week, we see that Booking.com is a very different business to the other Online Travel Agencies. It is almost entirely designed around a convenient guest experience, which has been a big factor in its market leadership for hotel guest bookings.
The high volume of bookings, particularly for the European market make it attractive to hotels and even VR owners. For many, the advantages of extra bookings outweigh the disadvantages.
However, the booking.com system is not designed to make it easy for VR owners! The challenges for VRs are:
- ALL bookings are instant book.
- There is no dialogue with guests prior to booking, and no way to decline a booking once you get to know the guest
- The system encourages the ability for guests to cancel at the last minute without penalty
- All listings are written by the booking.com description writers. You have no say in what they write and no way to promote special experiences during the guest stay the way you can for other Online Travel Agencies. However, they always do list the name of your VR.
- The contract with the property owner usually requires price parity, forcing the owner to not advertise a lower price anywhere lower than the price on the booking.com listing.
- The owner takes all payments
- Credit cards are often declined in the weeks and months after the original booking is made
Like the other OTAs the ranking algorithm is not revealed, but it seems that the general principles for the algorithm are:
- More frequently booked properties are ranked higher than local competitors
- better reviews help rank higher
- properties available at a 10-15% discount to “Genius” club guests have a higher exposure and get more bookings
- higher commissions paid get you ranked higher
The deck seems firmly stacked against the VR owner, but there are a number of things VR owners can do to optimise their use of booking.com.
What you can do
Firstly, if you are exposed to high risk through the system, don’t use the booking.com platform! For example, large remote properties where there is no representative on site are vulnerable to damage from party guests.
If you do decide to list with booking.com make sure you stand out from your competitors.
- Make sure all your facilities are shown on your listing and are accurate
- Have excellent photographs that make your property stand out
Like all Online Travel Agencies, you should encourage your guests to submit reviews through the system, particularly the ones who have a great experience. The more reviews the better, the higher rating the better.
Challenge the description
If there are aspects in your description that have been missed, go back to Support and tell them, and offer a suggested change. I have done that successfully where our ocean view was omitted from the original description. I pointed out the omission, using a number of quotes from past booking.com guest reviews who loved the ocean view, so it was the customer saying it, not just me. I made it easy to make the change with new suggested wording, and it was changed next day.
Select a strict cancellation policy
The guest culture is to expect to be able to cancel at the last minute. The system default is last minute cancellation, but you can set a stricter cancellation policy to avoid late cancellations. Eg where the guest loses their payment if they cancel within 6 weeks of the stay.
If no one is on site, encourage your cleaner to cruise past occasionally and report back if there are potential issues, like more cars and people on site than for the booking.
After the booking is received, have a chat with the guest to make a relationship. Use the power of the crowd. “We are a small business and so lucky that guests like you invariably look after the property, thank you for choosing us”.
If you have a guest that you are uncertain about with and their card is declined at time of payment, you can report the non-payment and request that the booking be cancelled. In most cases it will be cancelled.
Side-step the price parity clause
In many countries, the price parity clause has been found to be anti-competitive, eg Europe, Australia. In those countries, lower pricing on the owner’s website is allowed for loyalty discounts. In Australia, the owner can set any price for telephone enquiries to the owner’s own website.
Given the growing market dominance of booking.com, consumer authorities are likely to further water down the price parity clause, as anti-competitive behaviour is clearer.
Hotels with hundreds of rooms are easily scrutinised for keeping to the parity rule. However many hundreds of sole owner VRs who are confused about price parity anyway are harder to scrutinise. A smaller owner is likely to set any price they want and if challenged, reasonably say they are confused by the complex 11,400 word agreement. Any crackdown on an individual owner would attract publicity and public outrage at the oppression of a small owner by a giant dominant player, and would possibly trigger a review of anticompetitive behaviour by authorities.
Take care with no-shows
If there is a no-show, you need to formally log it in the Booking.com system within the timeframe (48 hrs), or you will be charged a commission on someone who cancelled at the last minute, a tough double whammy.
Key takeaway: Weigh up the potential extra traffic versus the risks associated with the booking.com instant book system before signing up, as there is no ability to refuse bookings