Selling too much? It sounds like a joke. There is never “too much”. Any reservation is welcome, and the more the merrier.
I’d like to talk about an issue I have heard mentioned by several hotel managers, they’re worried about their excessive dependence on the high percentage of reservations that they get through Booking.com, while their official hotel website is unable to produce the same good results.
Booking.com has grown spectacularly in the past few years. They have carried out an excellent work, they have a fantastic website in relation to customer experience; they have created a huge affiliate network and a ubiquitous presence on the internet that has given them an enviable position in Europe.
As a consequence of its growth, many Spanish hotel managers feel not just a great satisfaction for the increased sales, but they are also starting to resent some of the aspects of Booking.com and their relation with it:
1. – Excessive dependence on just one provider.
The hotel managers’ traditional wisdom says it all “Do not put all your eggs in one basket”. I would add: “…especially if that basket isn’t yours”. I think that the direct online sales channel is an exception to diversification: As the ideal long term target, it should try to get limitless growth, to the expense of the middleman.
2. – High costs
Booking.com isn’t cheap for the hotel, especially the contracts that provide more sales volume and more visibility. You could argue that there are other middlemen who are as costly or more than Booking.com, but there are also others that are better value for money, especially: direct online sales.
3. – Increasingly higher pressure on the hotel to make its conditions stricter.
Commissions that keep increasing every year, a maximum amount set for some contracts…This year they are focusing for the first time on hotels that do not apply a strict parity pricing policy with the hotel webpage. This, although, legal if it’s in the contract, had not been required by many companies up to now…
Booking.com has on its site 648 hotels in Barcelona and 526 in Madrid. That is to say, all of them, and they can be checked by any user. They don’t have a lot of space for growth, at least in the big Spanish cities. They could try to grow by making their conditions for hotels harder and harder to fulfil?
4. – “Having to be on it”, because of visibility
Not being on Booking.com is a luxury that not many hotels can afford. Not just because of their sales capacity, but also, because of the visibility that the hotel gets by being presented to thousands of visitors: Many of these visitors choose the hotel in booking.com and end up booking on the hotel website.
Basically, even though Booking.com advertises itself as “Hotel bookings online”, and that’s what they want to promote, advanced users see its alternative use as a directory and a hotel comparison site …one important reason for the hotel to be present.
5.-Not a lot of space for differentiation.
The huge visibility for the hotel provided by Booking.com is balanced by the fact that it presents all hotels in the same light, and standardized images. The record for each hotel in Booking.com isn’t an ideal advertising platform for those who already have a differentiated product, who have been able to develop clear features that appeal guests, who have identified them, or who want to offer a style and an image of themselves that is clearly defined.
The problem gets worse when Booking.com distributes the information among its many affiliates, and the image of the hotel can appear in difficult conditions and also difficult to trace.
I believe that Booking.com has an opportunity here, if it’s able to find more ways of highlight the differences of those hotels and all their especial features. Besides, those hotel managers who are normally “enterprising” with regards to marketing usually tend to be as well in other situations, and that’s why they are more critical and feel uncomfortable with their relation to Booking.com and the inconveniences it represents.
What can a hotel in this situation do? Is there any way to break with the vicious circle? How to get rid of the big and powerful arms of the Booking.com bear without having less reservations or an increase in costs?
I believe that this alternative exists and it’s based on two things:
1. The desire to act. It seems obvious, but maybe many hotels are happy with this situation, in which somebody like Booking.com provides them with a considerable number of bookings. They don’t see the disadvantages I presented above and they don’t have to develop the marketing actions themselves. It’s totally okay. If, on the other hand, the hotel has other needs, maybe it would be receptive to the idea of looking for other alternatives.
2. Investment in advertising. That is the key of everything, and the key that opens all the doors for a change… and I’m not talking about investing more.
The second part of this post will explain the alternative solution and express it in mathematical terms and terms that are valid for the hotel.