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Genius programme - should we get a discount on commission not an increase? Discuss!

I think that there should be something to encourage hoteliers to be better. Aim higher. Get those fantastic reviews. But at the moment, those hoteliers are rewarded with the chance to join the Genius programme and pay more commission and give a discount to the customer.

Er.........is it just me, or is this crazy?

Hoteliers who are really good should be rewarded with REDUCED commission and the customer should know that this 'Gold Star' rated establishment will make sure they have a fantastic stay, therefore pay full price.

It would encourage those hotels that maybe are coasting along to pull their socks up and aim for a true reward, and immediately reward those who have been earning those great reviews.

The customer would be getting a gold star guarantee of a great establishment.

BC would get more customers going to these great establishments, so more happy customers means more future bookings all round. 

Everyone is happy!

If BC think they should offer discounts to their regular customers, then they should reward those customers out of their own coffers.

There is a lot of competition out there for booking sites and AirBnB is mentioned often in comments on this forum. They have clearly thought very carefully about their business model and got it right. I have only had delightful guests through AirBnB. It makes a big difference when people staying know they will be reviewed too!! Plus the commission is perfect reasonable and acceptable. BC need to be careful they don't get too big for themselves and miss the bigger picture.

They don't just need happy customers, they need happy hosts too. Or there is no business.

15 Replies

8
Leandri Klopper

Hello Louise ,

Excellent points that you make!

It's refreshing to read a post with an Actual solution or suggestion instead of just being irrate about the higher commission and discount required.

What a grand idea. I will even be willing to do the Higher Commission and More Discount to prove myself for the better park of half of year, to be able to belong to the Elite class of establishments that have that Gold Start and pay Less commission without offering discounts.

I think people/properties sometimes struggle so much to stay in these programmes that Booking.com wants to make sure they get the most out of their efforts while we are in the programme... So it makes sense. But then hire a group of account managers who are really good at keeping the properties allocated to them in the programmes, then it will all be worth it.

Thanks for the interesting topic!

10 months ago
2
Louise

Thank you Leandri

There was another comment on here from someone called Cassid, but it seems to have disappeared.

She said that she was a small business and with bookings through the genius programme she barely breaks even. Now I'm no economist but Cassid, if you're reading this, please go and rewrite your business plan and cash flow forecast because if you barely break even you are not making anything to invest back into the business. Cassid pointed out she has had to get a loan to pay for work needed in the house!! Warning bells Cassid. Maybe you need to start again on your finances and work out what you actually need to be charging to leave your self something at the end of the season. What is you need new bedding, new crockery etc etc.

Raise your prices and customer on Booking.com will still see they are getting a discount. You will still therefore get bookings because they can see that magic word discount. But maybe you will then be able to service the loan you have taken out!!

There is no point being in this business for nothing, unless you want to be a charity. It is in BC's interest that their hosts make money or they will close.......and then no commission.

Talk to your account manager at BC. Be realistic. I really hope you get sorted our because otherwise it will wear you down and make you want to give up.

Louise

10 months ago
2
Louise

Further thoughts on this.

I am NOT in the genius programme (so on Booking.com regular commission) and I do NOT offer discounts on any site. Our prices are the same whoever you book through, although AirBnB customers know they pay a bit more because that is their share of the commission. I have refused to join Expedia because their commission was 20% plus the host was expected to discount on top of that (as this is a search site, I could not work that out!) but I know that my prices are as low as they can be and that is based on taking a view on commission.

What I mean by that is that I have taken an average view over say 2 months in the summer, when we have been very busy (we have only been open since April, so do not have a full year to view yet). I can see how many people booked through Booking.com, AirBnB, our own website or by phone. My prices are OK for us based on that business (I would prefer higher to give us some breathing space but local competition means not for now) but this is based on NOT having 100% of our business booked through Booking.com. I can work out how many guests we need in a month minimum to keep the house running based on this average view as long as we continue to get bookings through other routes.

If I had 100% Booking.com bookings for a couple of months, that would be a problem for us, because I would need so many extra guests to cover the shortfall of it all being the higher commission than an average including AirBnB and our own website.

One other cost consideration is are you running a credit card machine yourself? Booking.com and AirBnB both take card payments on my behalf for no extra cost. So consider how much you pay for your card machine and perhaps if you are taking card payments mostly for Booking.com guests, you might as well let them handle the payments. It does mean with Booking.com you have to wait a month to get paid, actually 6 weeks for someone who comes at the beginning of the month, but AirBnB you get paid straight away. I take that cost into consideration when working out my costings.

10 months ago
2
Maarten

@Louise your proposal rasing the prices to adjust for the loss of revenue should be illegal on all OTA sites. It is good for the OTA's they get even more commission because you raised your price, they will like that a lot. If this is allowed then a message should be shown that "You do not pay commission as always and will get a discount. Be aware that the owner had to raise his price to be able to give you, as a valued customer of our site this special offer"

I do not like to be listed lower on the listing because someone raised the commission or offered a discount after raising the price. As property owners we are joining a race that is only good for the OTA's and not good for the property owners and our customers. The prices will continue to rise because everyone, thanks to the algoritms, has to raise the commision to become visible.

10 months ago
2
Louise

Le Moulin Malin

That is an excellent point and I take note. You are definitely right about raising prices and my suggestion was wrong.

Although, it has just occurred to me that it is exactly what Booking.com are doing but the other way round. They get a host to sign up for the genius programme, but it is at a higher commission rate and then want the host to discount, so in the end, Booking.com are still getting the same amount of commission as they were before signing up for genius.

I think the OTA's have taken over and put necessary pressure on hosts to discount and sign up to unrealistic rates. With some it seems as though there is only respect for the customer and not for the hosts.

The difference with say AirBnB is that the property owner is respected equally to the customer.

But these business are here to stay and as property owners we have no choice but to use them. We know that customers use these OTA's because it is the quickest and most convenient way to find a property in any area. Sad, but it's how it is.

But anyone who is not actually making anything on a room needs to think again and just quit genius.

10 months ago
6
Bandara Hotels…

@Louise I do agree with you. We do not mind to pay extra commission as long as is on win-win situation as a good partner together. But lately Booking.com seem to less care about hotel part than old day.

10 months ago
8
Leandri Klopper

Hey guys,

Both equally deep points to reflect on. However I doubt Booking.com will change their ways as they are massively successful. Hopefully they will try to compromise with us.

Louise , you were offering pointers to Cassid. Firstly, well done on showing such passion/interest in someone else's place/future that you write a full essay to help them! Bravo!

Keep in mind though that the properties listed on Booking.com by the good people commenting here on the Forum, are widely different and are loaded for wildly different reasons or outcomes. Some people have their property/guesthouse/b&b listed as a hobby. So breaking even is all they are aiming for.

Some of us have Huge properties with many units, so offering discount to get Feet on the ground is more than acceptable, it's actually disarable (this is the case for me with one of our properties). But I also have more than one propery listed and I would love our smaller property to belong to an elite club.

Something to also take into consideration is that not all properties have competition in their areas on Booking.com, so some properties have no problem in offering discounts to get more visibility or no need to offer discount for visibility. I completely understand not wanting to offer discount when you have a smaller property with no competitors, and I completely understand that it's frustrating that you have to offer discount on a smaller property to be more visible than your competitors (which ranges from small to huge properties).

You can atleast take comfort in the fact that Guests sometimes don't go for the first thing they see or the cheapest most visible option. Sometimes they are looking for something within specific parameters (such as a Guesthouse which included breakfast and has only two rooms...or whatever else they are looking for). This is where Setting up your Property Description is extremely important. You can be the most visible, least expensive property way on top of the list... but if there is a property with affordable rates and Amazing Photos and a stunning vibe then ... well at least I think... you will win the booking.

Just my inset. Great advise though!

Keep well.

10 months ago
1
Matt - The Las…

Hello everybody,

I was just having this exact conversation yesterday! .... here's my thoughts and for the record, i am in the Genuis program but i'm struggling with it for many reasons, as i was with the 'preferred partner' program which i am no longer a member of.

The idea of being able to pay to outrank others (unfairly) in the listing results makes a nonsense of any search algorithm, and can only ultimately lead to one result and that is a very distorted database that ends up serving nobody very well. Look at Apple for an example, where they have to constantly take two steps backwards with their software because they've done so many deals with partners over the years that their own licensing has started to conflict itself leaving you with a product that will talk to this thing today but not that one tomorrow. Obviously an extreme analogy but true never the less.

The correct way to approach this would be to decouple the respective programs between Guests and Hotel owners. BDC would then offer an independent Guest program to their customers which i suppose would act like a loyalty program but would have no affect on the Hotel owners.

For the hotel owners, they would then offer some sort of performance program that would be rewarded with perhaps extra exposure outside of the actual search rankings but maybe include a badge in the listings highlighting the fact that this hotel is a high performer. These awards could actually be for many things but shouldn't be financially rated as the owners own set price will already highlight this but will obviously bring the hotels strengths to the attention of the potential guest.

This approach has many advantages

1) The BDC listings keep their integrity and filter / sorting options will always give a 100% true representation of what is on offer to the guests. This in turn creates trust and loyalty with guests which will ensure the longevity and appeal of BDC

2) BDC are free to operate in any manner they please without it affecting hotel owners, this will encourage hoteliers to offer more rooms on BDC and i'm sure, in many cases lead to an increase in BDC being sole agencies, leading to far more revenue in terms of commissionable sales.

3) Hotel owners, as has been said above, will strive harder for listing placement as increased efforts will have a direct affect on rankings which will then mean increased sales without the fear that all their hard work being usurped by greater commission offerings.

4) Reduced cancellations due to confidence in bookings offered by booking through BDC

5) Reduced manpower required due to reduced level of communication and disputes.

I could go on forever here, but i think i've made my point! .... artificially increasing the weight of anything, be it a database entry of a side of bacon will only serve to bite you in the ass further down the line.

Cheers, Matt

10 months ago
2
Maarten

Matt,

I totally agree with you.

The ranking on the listings is for me unclear and I do not think it serves our customers very well. What is for example, 'our top picks' exactly?

Wouldn't it be great if the Head of Search would open a thread like Morten Larsen, Head of Product Marketing did on this forum to help us understand how we can improve our sales without the need to adjust our prices and commision and give answers to questions about the search.

For customers search is why they use BDC and they should get the best recommendations for what they are looking for and we need to understand how we can give the customer what they are looking for.

Maarten

10 months ago
1
Matt - The Las…

Indeed, the search engine is everything. Look at google now .... if your trying to find out anything that's a little bit scarce but is linked to a product you've got no chance. You'll have to trawl through all the paid ads and product placements before you give up and try a different one.

Head of search ...... is there anybody out there? ...... Head of search ..... Where are you??? .... This is "distorted search" calling "Head of search", do you read me?

10 months ago
2
Louise

Matt you have hit the nail on the head and said exactly what I wanted to, but much more eloquently!

And yes, it would be fantastic for the Head of Search to follow Morten Larsen's example, but I suspect they are shy of the floodgates that would open.

It would no doubt start the debate about their price parity strategy as well...........

Louise

10 months ago
1
Matt - The Las…

Oh Dear .......

After all that discussion i've logged into my extranet and i'm confronted with this (see below)....

Think about it, if you activated this, you would at times be discounting your prices by 15%, paying BDC 15% commission on that and if there happened to be any other running "opportunities" that you've forgotten about like a last minute deal or maybe your in the 'preferred partner' program you'd end up with about 50-60% of the price ..... I don't need to join a (not so) Genius program to fill my gaps if i'm going to give everything away for half price!

This demonstrates how quickly a database can lose it's integrity if it's allowed to get out of hand with thoughtless marketing. .... What will they do next year? This strategy can only crash and burn as clearly these levels of compounded discounting are in no way sustainable.

Where is the Head of Genius? ..... I would really like to hear your strategy behind this program. It really needs to make sense otherwise i'm out of this, is my 10% discount not sufficient anymore? I know eBay has never really taken off in NL but i would highly recommend a case study into why its user base declined so much in the last 10 years to avoid falling into the same traps, you'll find some very unnerving parallels.

Matt

Give an extra 5% discount to select Genius guests

You’re already getting a boost in bookings by being in the Genius program, but you can get even more by offering an extra 5% discount to the most experienced Genius guests.

  • More frequent bookings
  • Special branding on the search results
10 months ago
2
Louise

Matt, this made me chuckle. How ironic!

I completely agree that this compound discounting will simply implode. Surely some basic common sense needs to prevail. You could sell all your rooms and be fully booked 365 days a year, but if you only break even then you make 0.00€ in a year, and that will not pay the bills! Larger hotels will have accountants to control them but smaller properties are normally looking after themselves and not always with a business head on. It was pointed out the some people only do B&B as a hobby, so do not need to make money at it............that does not mean that it is OK for them to be encouraged to discount and pay more commission just to get up the visibility list to work hard and make nothing from it!!

But in my humble experience it is often the same pattern in a big company. Marketing plough ahead with ideas, usually based on discounting because we are all so brainwashed into looking for a bargain but there comes a time when there is simply nothing left to discount............

Marketing departments are usually very well funded and not short on decent salaries. They should be made to earn their salaries by coming up with alternative strategies to discounting. There are other ways to be competitive!

10 months ago
1
Matt - The Las…

I'm going to save my answer for a new thread as it's not totally on topic but definitely related.

And don't get me started on marketing budgets ....

10 months ago
1
Info

I wholeheartedly agree that commissions on Genius bookings should be lower! We are already offering rooms at a discount, to get hit with the commission at the same or higher rate is egregious!

2 months ago