Booking.com: Your Worst Best friend?Dec 14, 12 | 12:06 am

By Guestcentric

In a time not so far away...In recent years, mostly in Europe tour operators would book entire hotels to fill up with guests that would travel on the tour operator's planes. Hoteliers lovedthis model, because while price was low, occupation was guaranteed and often paid upfront.

However, as service degraded or competition increased, Tour Operators would book other hotels. Hoteliers that relied solely on a few Tour Operators wouldstruggle establish new channels, or fail and go out of business. But what does all of this have to do with Booking.com?

Booking.com's success for independent hotelsBooking.com has taken Europe by storm, and is now making inroads into the US. Studies show that over 50% of all hotel nights booked in Europe are bookedthrough booking.com.

This level of market consolidation has been a bonanza for independent hotels. Without any brand recognition, booking.com has become the ideal digitalmarketplace to promote and sell their rooms to guests from all over the World.

Booking.com's has been able to create a formidable marketplace with a large amount of inventory (many consumers consider that "all hotels are onbooking.com, at least all that matter"), it does not take payments upfront, and booking.com's increased focus on user reviews provides a one-­stop-­shop forconsumers.

Booking.com now claims to be the number one online hotel reservation service in the World. From our experience with hoteliers, booking.com certainly hassignificant distribution power, and there is no doubt that it represents an increasingly significant portion of the income of numerous hotels throughout the World.

Booking.com's obsession with priceBooking.com is obsessed with providing the best possible prices to consumers. J.D. Power and associates reported that Booking.com has the highestcustomer satisfaction rate of independent travel websites, mainly due to competitiveness of pricing.

This obsession with price causes the relationship that hoteliers have with booking.com to frequently be one of love-­hate. They love the reservations thatBooking.com brings in, but they hate it when they have to sell for low prices, preventing them from differentiating their hotel on any other factor.

To add insult to injury, Booking.com's flat commission model has been replaced by one of bidding for position on the first page of a destination. It is notinfrequent that hotels pay over 20% in commission to be on the first page of the recommended properties in their city.

These issues and Booking.com's market power, make its relationship with hotels uneven. Hotels might be receiving significant revenue from the reservationsthat are made through the site, but if they depend on Booking.com for their reservations, they have little bargaining power.

The playing field is tiltedBooking.com recently started taking one-­sided decisions on how their system operates and forcing hotels to adapt. For example, booking.comrecently reserved the right to automatically resell a room that one of its customers has canceled, apparently to protect their commission. Booking.com alsochanged their information policy and now blocks access to the customer's information, e.g. by eliminating customers' e-­mail addresses apparently to preventdirect contact between hotels and customers.

Even appreciating all the revenue they get from Booking.com, most hotels' situation may be so precarious that if Booking.com were to raise its commissionmargins there is little that they can do about it.

In a recent debate at Phocuswright Conference, hoteliers divided channels between good channels (the ones that extend reach or create new markets) andbad channels (the ones that cannibalize their natural markets, e.g. by bidding on their keywords, e.g. Hotel XYZ).

With booking.com taking all these steps, how can hoteliers really trust that booking.com has their best interest in mind and is not their worst best friend?

Balance your Booking.com presence through hotel digital marketingHotels need understand how to use Booking.com for their benefit, but not be overly dependent on it. They need to understand how to keep the reservationservice at arm's length by having a sound hotel digital marketing strategy.

It's important to have a multi-­channel digital marketing strategy that gives hotels digital presence. Achieving such online presence would include, among otherfactors:

1. Great looking website-­ Many studies show that a large majority of consumers would prefer to book directly with the property given the same terms andconditions. To instill consumers with the trust to book, it's important to have a stunning website that conveys to potential clients a positive feel for thehotel,;;

2. Multi-­channel reservations -­ it is vital to diversify channels, and ensure that your hotel is present in at least 5-­10 mass channels, includingExpedia/Hotels.com, lastminute.com, hotels.de and the ones that may be most relevant to your segment (e.g. if you have a boutique hotel, you shouldtry to get listed on splendia.com, tablethotels.com, mrandmrssmith.com);;

3. Optimize for mobile devices -­ Mobile is the fastest growing channel in hotel bookings, especially last-­minute reservations. With the increase ofreservations by mobile devices, your hotel needs to have a website and booking engine optimized for mobile devices;;

4. Collecting guest information -­ Collecting your guests' data so as to target the right profiles with your promotions and reward the best guests withcampaigns that encourage loyalty;;

5. Presence on social platforms -­ a beautiful page on the major social networks can go a long way to increase an hotel's brand exposure;;

ConclusionNo hotelier wishes to have their hotel completely booked this year if they are to find themselves empty and helpless next year, because their reservations onlycame from one channel and they didn't have any other channels established.

Hotels need to have a multi-­channel digital marketing strategy, so as to avoid any kind of dependence on any one service for their online revenue. They need tohave a digital presence that safeguards them from other companies having power over them. One that guarantees that they are sought out by potential clients

have a digital presence that safeguards them from other companies having power over them. One that guarantees that they are sought out by potential clients

no matter on what search engine these are conducting the search.

Source: GuestCentric

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