Industry Update
Opinion Article13 November 2013

Booking or not Booking

By Georges Panayotis, President & Founder of MKG Group & Hospitality ON

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In a message from its communication agency to various publications, Booking.com denies being a greedy distributor who takes advantage of weak hoteliers in order to impose its own conditions. It attempts to restore a better image by rejecting 11 ideas. However, in doing so, it recognizes some practices alleged against it and avoids sensitive issues. The exercise deserves to be supplemented by answers to some additional questions....

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Are clients aware that the hotels that appear in their searches are classified according to

the size of the commission Booking receives on the amount of the reservation? The choice is not so clear and rather directed according to the financial interest of the site.

Can the hotelier supplement its CRM with customers' personal data sent by Booking?

Not really, recognizes the site, under the pretext of preserving the confidentiality of private information. Where is the line between discretion and trademark protection?

Does the hotel run the risk of losing some of the value of its business? Booking does

not feel affected by this problem for which it is nevertheless directly responsible. In losing the direct relationship with its clients, the hotel weakens the value of its business.

Does the hotel control its inventory? Yes, says Booking which does not require a

minimum number of rooms to sell. Yet there is pressure for the site to have access to the last available room. Otherwise, the hotel is taken out of the listings of proposals. Hoteliers who have too easily forgotten to diversify their sales channels have had a painful experience.

Will the hotel's own site be visible on search engines, especially in natural search? This

is less and less the case. It is understood that generic keywords are purchased by online retailers. After all, this is the origin of their business! It is less acceptable that the proper names of hotels are also captured and diverted by these operators, which always appear in the first lines of Google and other search engines.

Is the commission rate really reasonable? The base rate is between 15% and 17%,

depending on whether the hotel wishes to appear as "Preferred" or not. It was already a significant rate when commission was usually 8% to 10% a few years ago. Keep in mind that at this rate the visibility of an hotel is low: to stand out in the crowd it must accept much higher rates, or participate in promotional transactions involving an actual commission charge beyond 25%.

Doesn't the hotel simply become a Booking franchisee? It begs the question when a 3%

commission is charged on all bookings to a hotel if the hotelier has chosen to use the Booking search engine on its own website. Booking.com can have access to all customer information already acquired at the hotel.

Isn't this abusing a dominant position? Certainly the competition among online booking

sites still exists and even justifies the existence of meta-comparison engines. But when Kayak, the largest among them, already belongs to Booking's parent company and Trivago is now controlled by Expedia, response transparency and the OTAs' stranglehold on all online distribution tools is legitimately questionable.

Professionals demand a little more transparency and balance in the rules of the game,

admittedly a little late, having expected to find an easy solution to all marketing problems. The alarm clock is painful, but it is beneficial.
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Georges Panayotis

Georges Panayotis is the President & Founder of MKG Group & Hospitality ON. Born into a family of hoteliers, Georges Panayotis left Greece at the age of 18 to study Political Science and earn a management degree at the University of Paris, Dauphine. In 1986 he created his own company and started developing specialised marketing tools for the hotel industry.

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