This blog covers the new features Booking.com has activated over the last few months. It will highlight what to check on, deactivate, and opt out of. It will also go deep on whether you should leave the Genius programme.
So, let’s get started.
The giant has been busy while we were all in lockdown.
It was not only the changes that Google made to facilitate hotel search and online bookings that rattled Booking.com. They were also thrown by the sudden rise in direct bookings as travellers sought first-hand and up-to-date information during the recovery stage of Covid. As a result, everything that Booking has been doing over the last 18 months has been to improve their bottom line.
This is not a criticism. Whether we like, love, or despise them, Booking is just another business that can only remain viable if it generates a profit.
(I will continue to write “Booking” in reference to the complete .com business name from now on, to avoid dozens of mentions of the full URL throughout this blog).
I remember connecting the companies I worked with in Chile to Booking for the very first time somewhere around the mid-2000s. The possibility of appearing instantaneously to anyone searching for accommodation in my destination from anywhere in the world was definitely attractive.
The executive assigned to the properties I managed was friendly, helpful, and always picked up the phone. Like anything, with expansion comes change. Since then, the modifications to how Booking can control what the end customer sees have been colossal, and it doesn’t always play in the hotelier’s favour.
I must add in here that I am not against OTAs, at all.
I believe them to be an important part of any property’s distribution strategy, but I also believe that we should know more about how to use them so that we don’t live in fear of what would happen if they suddenly disappeared.
It is a powerful question to answer:
Would your business survive without its Booking.com profile?
Strengthening your business so that it will is the single most important resilience strategy that you can focus on. As you work to reduce your reliance on the giant, you will realise that you will also become much more able to withstand other challenges that your destination, or even the travel industry as a whole, may one day again face.
Becoming unafraid of marketing your property without a Booking profile is not a pipe dream. There are many actions you can take such as optimising your website for direct bookings, personalising your offer according to guests likes and needs, as well as working on an internal customer loyalty programme.
Right now, the reality is that A LOT of people use the OTAs for research. They look at the maps to pinpoint your location, they read the reviews (though there is an argument that anything prior to March 2020 no longer carries any weight). It is also highly possible that they find out about you for the first time on those sites.
There will always be someone who just goes through the booking process right there on Booking, but there is an increasing number of people who use the OTA to find out more, and then type the name of your hotel into Google. Savvy travellers know that often they can get a better price when they book direct, so why not try to find out? That is when you can shine (and win the booking!) by providing a seamless booking experience on your own website.
Anyway, enough of that for now. This blog is about understanding what new features Booking has brought out over the last few months, whether you should participate, and if so, how to use them to your advantage.
#1. Promoting their Online Payment model
This Online Payment model is nothing new. Some properties started working in this way years ago when they didn’t want to, or couldn’t, take credit card payments themselves. Booking can take payment on your behalf, and then they pay the stay amount minus commission and an admin fee.
However, by participating in this payment model, you essentially allow Booking to undercut your prices. They are able to play with your net versus final prices. This means that you are giving them permission to offer lower rates than the customer will find on you direct channel.
You can change your payment agreement by contacting your executive. If you don’t know where to start to find the details of your executive, follow these instructions to find the correct details.
#2. The return of Risk-Free reservations
Ask any hotelier what they find the most annoying about Booking, and usually the first or the second response is to do with the high number of cancellations for flexible rates. It is unacceptable and downright annoying.
The pandemic has of course exacerbated this with price fluctuations and stops and starts of customer demand fuelled by changing travel restrictions.
Booking responded by bringing back to life their Risk-Free Reservations programme. It has been hanging on in there under the radar for some time, but the new news is that Booking automatically activated the programme for many hotels across the board.
This programme means that Booking will look for a replacement guest in case you receive a cancellation for a certain booking. And if they can’t find one, they also state that they will take over the payment obligation for the cost of cancellation.
The idea sounds interesting to hoteliers because it kind of guarantees that any reservation that comes through Booking will be paid for.
But here’s the thing… by allowing Booking to promote your inventory in this way, what incentive does the customer have to contact you to see if they can get a better deal?
Also, what if you have published non-refundable rates on your Booking profile to entice last-minute bookings? The same blanket policy will be applied to those rates too.
Please note that you could only have been unilaterally included in the Risk-Free Programme if you participate in the Online Payments model as mentioned above, as Booking uses that solution to ensure your payment. If you have never activated that Online Payments model, then Booking could not automatically add you to their Risk-Free Reservations programme.
If you have been added to the Programme but would like to opt out, you should be able to do so via the Opportunities Tab in your Extranet, where you will see the Risk-Free Reservations subheading on the dropdown menu.
#3. Preferred Plus programme
This is a new feature that has been sold as a select, exclusive and limited product – much in the same way as the Genius programme was at the outset.
It is not to be confused with the regular Preferred Programme that already offers increased visibility in return for 17% commission, as opposed to the standard 14%.
The Preferred Plus programme promises a higher visibility boost in the search results, in return for a 5% commission increase. Members are quoted as enjoying “up to 30% more bookings”. Here are the reasons Booking says you should join the programme.
However, Booking does not explain how they will boost your property’s visibility. Just a quick destination search seems to throw up non-Preferred partners alongside those who are participating.
This is what a customer will see if a hotel is participating in the programme.
Another real downside to the programme is that, in addition to your inflated 22% commission, Booking will offer credit to your customer when they later book another hotel on their own website. This is a strategy to keep customers on their own site.
Essentially, your inflated commission paid to Booking is then used to convince the guest to book another stay on their site. In essence, it becomes a customer loyalty incentive, that you then need to match to stay in the game.
Not only that, but the increase in commission is charged on your rates including taxes, not on the net rate of your room.
AND, one of the biggest problems is that Booking do not provide any kind of breakdown so you can assess how many and which bookings have been generated by this increased visibility, and yet the 22% commission will be applied to every sale made via their site.
#4. Genius rate sharing
Now, onto Genius rates.
I get asked a lot by concerned hotel owners and managers if they should work with the Genius programme. My answer is usually along the lines of, if you are comfortable stacking discounts so that you profit dwindles and are happy to let Booking dictate your lowest available price, then go ahead.
Most people stay out of comfort and fear of what will happen if they opt out. More on that below. But first, the news about the rollout of Genius rate sharing should really make you sit up and take action to get out now.
What does Genius rate sharing mean?
In short, your Genius rates will now be available on Booking’s partner and affiliate websites like hotels.com or on airline websites for example. They will also be visible on metasearch engines such as Trivago and Kayak, as well as on any site within the Bookings Holdings Group. That means Priceline and Agoda too.
Ultimately this means that you lose all control of where this supposed “Booking member benefit” is published.
As seen above, you can opt out of sharing these rates on other channels by going to your Extranet > Opportunities > Genius Partner Programme > Manage your audience.
Now onto the important question:
What will happen if I opt out totally of the Genius programme?
The answer is that you will take control.
Why do people stay in the Genius programme?
Comfort and fear.
That is all.
It is comfortable to see those Genius bookings rolling in. You have probably taken a look at the Genius bookings report for your property. They usually show a higher percentage of bookings coming in via the Genius programme. That of course fuels the fear and locks you into status quo.
The hard truth is that Genius might get your more sales, but it costs you so much more. Only you can answer if that is worth it to your business and your bottom line.
Here are 5 points to think about when taking a decision on staying or leaving:
#1. There doesn’t seem to be an exclusivity about being a Genius member anymore. Their own website states that you can just sign up to start accessing discounts right now.
And to access a higher discount, all you need to do is complete 5 stays over 2 years at a property listed on Booking.
#2. You will never find out how many full rate sales have been lost to Genius bookings. This will never change.
#3. You have very little flexibility over when you want Booking to show Genius rates or not because you can only opt out for a total of 30 days during any calendar year.
#4. If you work with business travel and/or host events, your clients will also see Genius rates available to them meaning your ability to offer a group discount is weakened at best and compromised at worst.
#5. If you work with mobile rates on Booking, that discount will stack onto the Genius rate meaning you could suddenly be discounting anything up to 30% before commission and tax.
So, if you don’t fancy having to repeatedly check to make sure your direct channels are always offering a basic rate that is as low as or better than the best Genius rate available online, why not test opting out and see what happens?
You could close the Genius programme for the next 30 days to see what happens but bear in mind that will use all of your available calendar black out days for a year. You can do this in the Extranet > Opportunities > Genius programme > Suspend Genius account
Or take the bull by the horns and opt out completely. You can always opt back in after 6 months.
Before you do, download a report that shows the revenue from all your Booking.com bookings in the last period, and then go month by month comparing what happens as you move forward without Genius.
I would love to be able to direct you to where you can opt out of the Genius programme in the Extranet, but it seems that the once hidden “Leave Genius programme” button has now been completely retired, so I can only say that you have to contact your executive.
Getting hold of them might be like trying to catch glow worms in your hand, but here is where you can go to your Extranet > Inbox > Booking.com messages > and then in the bottom righthand corner is a drop-down box that says “Contact”
(Click here to go back to Promoting their Online Payment Model if you just popped down to look at the instructions on how to reach your executive :) )
I hope you are inspired to take control back of your Booking profile. As recap, here are is a checklist of suggested actions to get you into action:
Decide whether to opt out of the Genius programme. Option one is to block the programme for 30 days, and option two is to opt out permanently.
If you decide to stay in the programme, deactivate the option to share your Genius rates on other channels.
Don’t participate in the Preferred Plus programme, and consider if it is really necessary that you are in the Preferred option.
Don’t activate the Online Payments option.
Make sure your website offers a better rate than a customer can find on any other OTA site.
Work on your own customer loyalty programme by copycatting what Booking do by offering credit for a future stay for example.
Unless you are a real Booking fan, do not refer other hoteliers to Booking in order to receive savings on your own commissions (this is a cheeky move on the part of Booking, they offer you a discount on your own commissions if you recommend a friend who signs up to publish their hotel on the OTA). You end up doing their marketing job for them!
Don’t fall for the “discounts on commissions according to sales target” option. This has been around for quite some time, but the discount you receive is actually only a 30% commission on the difference between the total sales and the sales target for specified high season months. But…. in order to be eligible, you have to activate a 10% mobile discount as well as the flexible rate. Offers like this might sound attractive, but you run the risk of your mobile rate becoming your best available rate, everywhere, and that means you need more room nights sold to cover your costs.
The question you should ask every time when considering whether to participate in any programme, on any platform, is not what can I save on my next bill, but how much will it actually cost me to participate?
There is nothing wrong with trying to do everything you possibly can to bring revenue in after the challenges of the pandemic, however, it is definitely time worth spent to develop a strategic plan of action.
Participating in every offer and option that comes your way is the best way to lose control of what you are doing.
Stay calm and don’t fall prey to the fear that staying as you are is ok. Don’t compare to anything pre-pandemic. Take a look at your sales figures and sources during this last 30, 60 or 90 days during this pandemic recovery period. There are small actions you can take that can lead to a higher return. Be confident and adjust your relationships with companies such as Booking.
Just one thing to remember, generating direct bookings is not something that happens overnight. It is the result of a handful of actions from a strategic toolkit that you tailor and adjust when you see what works and what doesn’t.
You have to be resilient to create a resilient business, but the dividends will be a more sustainable future, increased profit margins and a lower breakeven point. Selling less to earn more can be achieved through focusing on value over quantity and is the perfect goal to aim for, so start today by taking back some control of your Booking.com profile.
If you want a hand with implementing changes to your Booking profile, contact me here for my one-on-one consultancy fees.
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