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Ongeldige creditcardgegevens rapporteren. Booking

Beste Collega’s,

na veel geklaag en gezaag zijn ze dan toch over stag gegaan.

Hieronder kunnen jullie lezen hoe jullie foute cc-kaarten sneller kunnen aangeven op Booking(dot)com.

Een snellere, makkelijkere manier om ongeldige creditcards te rapporteren
U heeft gevraagd om een efficiëntere manier om met ongeldige creditcards om te gaan. Daarom hebben we dit proces vereenvoudigd. Dit is er veranderd:

Kortere updateperiode

Gasten hebben nu maar 24 uur en één poging om hun creditcardgegevens te updaten. Als een gast de gegevens niet binnen 24 uur doorgeeft, of nogmaals incorrecte gegevens verstrekt, kunt u de boeking direct annuleren.

Bovendien kunnen lastminute-boekingen die met ongeldige creditcards zijn gemaakt voortaan worden geannuleerd vanaf 15:00 uur op de dag van aankomst.

Een snel en gemakkelijk proces

Om een ongeldige creditcard te rapporteren, hoeft u nu alleen de laatste vier cijfers door te geven. Gasten krijgen direct een melding per e-mail, sms én de Booking.com-app die ze aanspoort om direct te handelen.

Een duidelijk overzicht

We hebben ook het tabblad Reserveringen in uw extranet verbeterd. De voormalige status ‘ongeldige creditcard’ is in tweeën gesplitst: ‘Openstaande creditcard’ en ‘Annuleren mogelijk’. Bovendien ontvangt u dagelijks per mail een overzicht van reserveringen met geüpdatete of openstaande creditcardgegevens. U krijgt dus gelijk een duidelijk overzicht te zien.

U vindt geüpdatete instructies voor het rapporteren van ongeldige creditcardgegevens op onze Hulppagina.

Evenementenlijst 2018

Beste Collega’s,

op onderstaande link kunnen jullie de voorlopige lijst met evenementen downloaden.

Zodra nieuwe updates beschikbaar zijn plaatsen wij deze online.

 

Retentierecht in de verblijfssector Deel 2

Beste Collega’s,

na het eindejaarsverlof blikken we graag even terug op wat er gebeurd is in onze hotels.

In 2 hotels hebben we hotelratten gehad, bij 1 hotel werd het retentierecht geweigerd door de politie. Daar wij reeds enkele jaren het recht hebben op retentie in de hotels hebben wij

de politie van Damme/Knokke-Heist hier andermaal over aangesproken.

Nu we een nieuwe preventieadviseur hebben kunnen we rekenen op de volledige medewerking van Dhr. Pintelon Philip Hoofdinspecteur Directie Operaties.

Hieronder vinden jullie de volledige wetgeving door die verkregen werd bij Horeca Vlaanderen en die integraal werd doorgezonden naar de korpsleiding van de Politiezone Damme/Knokke-Heist.

Vanaf heden kunnen jullie die de volledige medewerking krijgen van de politie inzake retentierecht, let op dit recht is niet van toepassing op wagens en levende dieren, indien de klant deze bij zich zou hebben.

Lezen jullie aandachtig onderstaande brief die naar de Korpsleiding werd gestuurd.

 

Hotelhouders en uitbaters van tijdelijke verblijven worden vaak geconfronteerd met wanbetalers of niet – betalers bij afrekening van hun verblijf.

Gezien dergelijke incidenten beslecht worden op burgerlijk niveau is een politionele tussenkomst – buiten het geval wanneer de fysieke integriteit wordt bedreigd – geen directe oplossing.

Naar aanleiding van verschillende vragen vanuit het BIN Tijdelijke verblijven werd contact opgenomen met de juridische dienst van Horeca Vlaanderen om hierover de nodige wettelijke mogelijkheden te kennen.

Op basis van dit contact mag duidelijk zijn dat de (hotel)uitbater binnen het burgerlijk wetboek beschouwd wordt als een bewaarnemer van goederen die hij bij wanbetaling of niet-betaling kan inhouden tot vereffening van het volledige tegoed.  Hij dient dit wel te doen op basis van de ‘pater familias’ m.a.w. hij dient de in bewaring gegeven goederen in goede orde te beheren (geen schade toebrengen, niet verkopen,…).

Deze regeling geldt met uitzondering van de voertuigen incl. hun lading en levende dieren.

Wil je dit agenderen op het OCT voor integratie binnen het interventiebeleid …

Dank bij voorbaat

Wettelijke basis – BWB

Art. 1948. De bewaarnemer kan de in bewaring gegeven zaak terughouden tot de gehele voldoening van hetgeen hem wegens de bewaargeving verschuldigd is.

AFDELING V. – BEWAARGEVING UIT NOODZAAK.

Art. 1949. Bewaargeving uit noodzaak is de bewaargeving waartoe men wordt gedwongen door enig ongeval, zoals brand, instorting, plundering, schipbreuk, of een andere onvoorziene gebeurtenis.

Art. 1950. Het bewijs door getuigen kan toegelaten worden voor de bewaargeving uit noodzaak, zelfs wanneer het een waarde betreft van meer dan ((375 EUR)). <W 10-12-1990, art. 2>. <KB 2000-07-20/58, art. 1, 006; Inwerkingtreding : 01-01-2002>

Art. 1951. Voor het overige is de bewaargeving uit noodzaak aan al de hierboven bepaalde regels onderworpen.

Art. 1952. <W 04-07-1972, art. 1> De hotelhouder is als bewaarnemer aansprakelijk voor beschadiging, vernieling of ontvreemding van zaken welke een gast die in het hotel zijn intrek neemt en er logeert, naar het hotel meebrengt; de bewaargeving van die zaken moet worden beschouwd als een bewaargeving uit noodzaak.
Als meegebrachte zaken worden aangemerkt de zaken :
a) welke zich in het hotel bevinden gedurende de tijd dat de gast er een slaapgelegenheid ter beschikking heeft;
b) welke de hotelhouder of een persoon die hem zijn diensten verleent, buiten het hotel onder zijn toezicht neemt gedurende de tijd dat de gast er een slaapgelegenheid ter beschikking heeft;
c) welke de hotelhouder of een persoon die hem zijn diensten verleent, binnen of buiten het hotel onder zijn toezicht neemt gedurende een redelijke tijd voor of na de tijd dat de gast er een slaapgelegenheid ter beschikking heeft.
De in dit artikel bedoelde aansprakelijkheid is per schadegeval beperkt tot 100 maal de logiesprijs per dag van de slaapgelegenheid. De Koning kan, in voorkomend geval, de gegevens voor het vaststellen van die prijs bepalen.

Art. 1953. <W 04-07-1972, art. 2> De aansprakelijkheid van de hotelhouder is onbeperkt :
a) wanneer de zaken in handen van de hotelhouder of van personen die hem hun diensten verlenen, ter bewaring zijn gegeven;
b) wanneer hij heeft geweigerd zaken in bewaring te nemen, ten aanzien waarvan hij tot bewaarneming verplicht is;
c) wanneer de beschadiging, de vernieling of de ontvreemding van de in artikel 1952 bedoelde zaken het gevolg is van schuld van hem zelf of van personen die hem hun diensten verlenen.
De hotelhouder is verplicht waardepapieren, geld en waardevolle zaken in bewaring te nemen; hij mag de inbewaarneming daarvan alleen weigeren, indien zij gevaarlijk zijn of indien zij, de grootte van het hotel en de omstandigheden in aanmerking genomen, een buitensporige handelswaarde hebben of overlast veroorzaken.
Hij kan verlangen dat het hem toevertrouwde voorwerp is opgeborgen in een afgesloten of verzegelde verpakking.

Art. 1954. <W 04-07-1972, art. 3> De hotelhouder is niet aansprakelijk voor zover de beschadiging, de vernieling of de ontvreemding te wijten is aan :
a) de gast of een persoon die hem vergezelt, bij hem in dienst is of hem bezoekt;
b) overmacht;
c) gewapenderhand gepleegde diefstal;
d) de aard of het gebrek van de zaak.

Art. 1954bis. <Ingevoegd bij W 04-07-1972, art. 4> De rechten van de gast gaan teniet indien hij niet onmiddellijk na de vaststelling van de opgelopen schade kennis daarvan geeft, behoudens wanneer de schade veroorzaakt is door de schuld van de hotelhouder of van de personen die hem diensten verlenen.

Art. 1954ter. <Ingevoegd bij W 04-07-1972, art. 5> Iedere verklaring of beding, waarbij de aansprakelijkheid van de hotelhouder voor het schadelijk feit wordt uitgesloten of beperkt, is nietig.

Art. 1954quater. <Ingevoegd bij W 04-07-1972, art. 6> De artikelen 1952, 1953 en 1954bis zijn niet van toepassing op voertuigen, noch op zaken die tot hun lading behoren en ter plaatse zijn achtergelaten, noch op levende dieren.

 

Philip Pintelon

Lokale Politie Damme – Knokke – Heist (PZ 5446)

Directie Operaties

Hoofdinspecteur

‘t Walletje 104 – 8300 Knokke – Heist

Tf. : 050 61 96 52

gsm : 0478 87 71 46

@ : philip.pintelon@police.belgium.eu

@ : PZ.DKH.HHOO@police.belgium.eu

 

 

 

 

 

Verdwijning van Lucien VAN VYNCKT (67) in Oostkamp op 20/12/17

Verdwijning van Lucien VAN VYNCKT (67) in Oostkamp op 20/12/17

Op 20 december 2017 verdween Lucien VAN VYNCKT, een man van uit Oostkamp. Hij werd die woensdag om 10u00 nog gezien in de apotheek “De Wieke” gelegen Bruggestraat in Oostkamp. Sindsdien ontbreekt elk spoor van hem.

Zijn voertuig een Mercedes-Benz 180 CDI met nummerplaat 1-FUM-950 werd teruggevonden te Oostkamp, deelgemeente Moerbrugge, Westdijk.

De heer is 67 jaar oud. Hij is slank gebouwd en 1m78 groot. Hij heeft donkerblond grijzend haar en draagt een bril.

 

Op het ogenblik van zijn verdwijning droeg hij een donkere broek, een witblauw geruit hemd, een blauwe pullover, een grijze lederen jas en bruine schoenen.

Verspreid op vraag van het Parket van West-Vlaanderen – afdeling Brugge – 20/12/17.

Link naar het opsporingsbericht

 
 

Getuigenissen

Hebt u meer informatie over dit feit, gelieve dan contact op te nemen met de politie via het gratis nummer 0800 30 300.

 

Nog geen hotel op De Raan, maar uitstel is geen afstel

BUURTBEWONERS HALEN SLAG THUIS BIJ RAAD VAN STATE TEGEN NIEUWBOUWPROJECT IN KNOKKE-HEIST

De plannen van het gemeentebestuur van Knokke-Heist om een hotel te bouwen op site De Raan, gaan voorlopig niet door. De Raad van State gaf enkele buurtbewoners gelijk.

Als het van het bestuur afhangt, komt het hotel er toch. ‘Uitstel is geen afstel’, zegt schepen Kris Demeyere (GBL).

De site ligt er verloederd bij, dus wil het gemeentebestuur er na de zomer voorlopig speeltoestellen installeren

Hotels komen in opstand tegen Booking.com

De Vlaamse hotelsector eist dat minister van Economie Kris Peeters (CD&V) en zijn collega van Middenstand Willy Borsus (MR) nu eindelijk de macht van hotelwebsite Booking.com aan banden leggen. Dat meldt Het Nieuwsblad. Horeca Vlaanderen baseert zich daarvoor op een recente Europese beslissing. Die verbiedt internetreus Amazon van zijn leveranciers te eisen dat die nergens anders goedkopere prijzen hanteren.

De Vlaamse hotels, vertegenwoordigd door Horeca Vlaanderen, willen dat de machtige hotelwebsite Booking.com in ons land dezelfde regels krijgt opgelegd als in Duitsland en Frankrijk. Daar mag Booking.com niet langer eisen van hotels dat de boekingswebsite altijd de goedkoopste hotelprijzen heeft. Een hoteluitbater in Frankrijk of Duitsland mag perfect op zijn eigen website nog lagere kamerprijzen afficheren.

In ons land werkt Booking.com echter quasi alleen samen met hotels die de website een laagsteprijsgarantie geven. ‘En dat is in het nadeel van de consument én het hotel’, aldus Horeca Vlaanderen, dat de praktijken al langer aanklaagt.

Hoteliers moeten immers tot 15 procent commissie afdragen aan de boekingswebsite. Horeca Vlaanderen voerde daarom onlangs nog actie, waarbij het consumenten ertoe aanzette rechtstreeks naar hotels te bellen en een prijs te onderhandelen. Die zou meestal lager liggen dan de kamerprijs op Booking.com.

Dat Horeca Vlaanderen zijn eis nu opnieuw kracht bijzet, heeft te maken met een recente beslissing van de Europese Commissie. Die dwong internetgigant Amazon om van een gelijkaardige laagsteprijsgarantie af te zien. De site mag daardoor niet langer van boekuitgevers eisen dat een boek niet elders aan gunstigere tarieven is te verkrijgen.

In ons land voert de Belgische Mededingingsautoriteit op dit moment een onderzoek naar Booking.com en de vraag of het prijzenbeleid van de website de concurrentieregels niet overtreedt. Van de uitkomst van dat onderzoek zal afhangen of ook in ons land Booking.com zijn prijzenbeleid zal moeten aanpassen.

Bevraging Paasvakantie.

Beste Collega’s,

op vraag van de dienst Toerisme graag onderstaande invullen en op Submit klikken om jullie gegevens door te sturen.

Deze bevraging is volledig anoniem.

Hebben jullie nog vragen dan kunnen jullie deze in het antwoordformulier aangeven, maar vergeet dan niet jullie email bij te plaatsen

zodat we weten wie we moeten contacteren.

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Cancellations shooting up: implications, costs and how to reduce them

What was just a concern a few years then became a problem and now it has become a nightmare. We are referring to booking cancellations, which have increasingly grown to unsustainable levels, in some cases above 40% and 50%.

Some hoteliers have considered this normal and have adapted their daily operations and even their strategy to such levels of cancellations, even stating that it’s no trouble and that it doesn’t incur any extra cost. A surprising statement and one I could not disagree more with.

Why so many cancellations? Who is responsible?

There is no doubt that advances in technology make it increasingly easy and simple to book a hotel on the Internet. This factor encourages us to do it even when we are not sure that we are travelling, which results in many cancellations.

At the same time, there is growing pressure from OTAs for clients to finalise their booking, which once again generates new bookings that, in many cases, will end up being cancelled.

Lastly, the client has got used to booking “in case I go” or with the idea of carrying on looking: “I book a couple of hotels now but when the date arrives I will look for a better or cheaper one”. Once again, more cancellations.

Are OTAs to blame for so many cancellations?

Many hoteliers are furious and blame OTAs for this huge amount of cancellations, arguing the fact that “many bookings are cancelled a few days before check-in and this causes many problems”.

It’s obvious that OTAs have an impact on cancellations one way or another but let’s not forget that OTAs are just the tool and that it’s the hotel who sets the rules. The main reason behind so many cancellations is the passivity of the industry who, due to lack of time or not knowing how to deal with the problem, has been carried away assuming that these are the new rules of the game and that they must be accepted.

All OTAs allow you to create and apply different cancellation policies depending on dates and/or rates: “non-refundable”, “flexible up to 24 h.” and “up to 7 days before check-in” are just some of the examples. However, hotels tend to abuse flexible cancellations, even on the “hottest” dates. A few years ago, the main reason was the economic crisis (“I will take everything that is coming in because I need it”) and now it’s “if the competition is doing it, I cannot do the opposite”, which sounds a bit like “if everyone is jumping out of the window, so will I”.

Costs associated to cancellations

However, are so many cancellations bad? Do they affect our RevPAR or our GOP? Of course they do, and for many different reasons.

  • Loss of income in the shape of unsold rooms (opportunity cost). An unsold room due to a cancellation (especially close to the check-in date) is something that you cannot afford, especially during high season. This impact, which is difficult to measure, is critical since it fully attacks your most important part of your income statement: the income itself.

  • Special mention to the impact of no-shows. A no-show is just a cancellation with no notice. It’s the worst-case scenario since it leaves the room unsold for at least the first night. For the rest of the nights, you have very little room for manoeuvre. For urban destinations where average stays range from 1.5 to 3.5 nights, the problem is not as big when compared with holiday destinations (avg. stay 4 to 10 nights), where the problem is much bigger.

The no-show impact can be reduced by:

    • Charging the client for the first night or the first two nights (assuming that it the charge doesn’t bounce, something which is not always the case).
    • In hotels with high last-minute sales and walk-ins where you can find occupants for the rooms from the second night forth.

In the event of no show

  • Lower RevPAR when edged towards wrong revenue management. Seeing how bookings come in means you have to make decisions on the prices that, in the end, may be wrong. How many more rooms could you have sold if you had carried out a proper revenue management? It’s hard to estimate but there’s a high probability that it could’ve been many more. This affects both high and low seasons, which places a question mark on the statement that “cancellations aren’t a problem during low season”.
  • Lower RevPAR when selling cheaper at the last minute. Cancellations just before check-in leave you with very little room for manoeuvre and, on many occasions, no alternative but to lower the price in order to sell the room, which then lowers your RevPAR.
  • Higher distribution cost (or net RevPAR) when using OTAs too much for last-minute sales. It’s normal to lean on OTAs when you’ve had last-minute cancellations and you are trying to desperately sell the freed-up rooms. The problem is that you do so at a higher cost (channel cost, override, etc.), something which happens especially when they cancel a booking from your direct channel (the one with the lowest cost).

Some hotels see last-minute cancellations during high season as a “blessing” since they can then sell those rooms at a higher price. This may be true in some particular cases but a calculation should be made on how much extra production did you get compared to unsold rooms. Awaiting cancellations to increase the price is a huge gamble.

  •  Direct operating cost. For hotels that do not have an automatic download of bookings and cancellations, the time that a person takes making bookings which will then be cancelled is high. Time is money.

Cancellations aren’t the important part, here. The important part is the notice period of the cancellation

It’s better to have 70% of cancellations and knowing about them in good time than 20% of cancellations that are notified at the last minute. Booking.com purists will quite rightly argue that many cancellations penalise you in the ranking. However, let’s leave this point aside for now.

The notice period of a cancellation is therefore the important part and the one on which you have to work on and devise a strategy orientated towards putting the cancellations forward as much as possible in order to put the cancelled rooms back on sale and not end up with an unsold room. In this example, the cancellation has barely any impact because you have not yet increased the price and you have plenty of time to resell the room.

How to reduce the impact of cancellations on my hotel?

In order to minimise the impact, as well as knowing the hot dates of your hotel as well as the destination pickup, it’s important to abandon the concept that “non-refundable” implies discount. Let’s see why:

Some techniques to minimise the impact of cancellations are:

  •  Measure, measure and measure. If you want to deal with the problem of cancellations, first you need to understand the problem at hand. What percentage of cancellations do you have? How does it vary per channel? Per month? Per source market? Per room type? What is the notice period of the cancellation? Your PMS should be able to provide you with all of these details. If he can’t, you have a problem. You are trying to solve a problem which you don’t know of. At Mirai, we publish a detailed cancellation report in order to make our clients’ decision-making process a lot easier.

  • Identifying false bookings. Bookings that you know are going to be cancelled but can do nothing but wait for that to happen are a big problem for many hotels. In these cases, you can charge and then refund 1€ for suspicious bookings the day it comes in and they will quickly come to light.
  • Along the same lines, limit the number of nights on flexible rates to 4-5 (in urban destinations) and 7-8 (in holiday destinations), especially for OTAs. In these cases, leave just the non-refundable one available. In some countries, bookings of 15 or more nights are required in order to obtain a travel visa.
  • Preventing cancellations.  Another good idea is to communicate with the client who has booked stays of higher value and give him a good pre-stay service, which will then reduce his tendency to cancel the booking.
  • Control the price on other channels. If you don’t control your distribution, your clients may find a better price for your hotel on an OTA with which you usually do not have a contract with. If this happens, the client will cancel the booking he had on your channel and book it again on another, where you will most likely have a lower margin of profit. Also, it will portray a bad image of the hotel to the client.

  • Do not waive cancellations in your non-refundable rates. If your client gets used to cancelling non-refundable rates, that can be a problem. This practice can be done on your direct channel (to build loyalty) but never through an OTA (since it’s the OTA who then builds loyalty).
  • Apply a revenue-management strategy that goes beyond the price. As occupation increases, as well as gradually increasing the price you should also make the cancellation policy more restrictive. Prepare your system with 24 h. notice, 2-3 days and even 7-14 days for holiday destinations. It won’t be a large obstacle for the sales and it will give you more room for manoeuvre in the event of a cancellation.
  • For low and middle season dates, you can apply a strategy combining flexible rates with non-refundable ones (this time linked to a discount). This does not necessarily imply lowering your average price. We wrote a post dedicated to this matter here.

  • For the hottest dates where demand exceeds your number of rooms, apply a non-refundable policy as the only one available, even if your competition does not do so. In this case, we would never apply the discount that we would normally associate to “non-refundable” but rather maintain the rate. It’s important to do so, even if there is not much time left for high season. Forget about leeway. If you are certain you are going to fill your hotel, don’t accept a single booking with a high probability of cancellation.

Your booking rhythm will slow down and this can be scary, which is why many hotels don’t do this. If it’s a hot date that you’ve always been full for, you won’t be wrong. In any case, you will fill the hotel up later than usual (the competition will already be full) but you will do so at a higher price.

Conclusion

Assuming a high level of cancellations is a dangerous game that can make you lose money and increasingly depend on intermediaries. Despite the fact that OTAs encourage the client to book (and cancel) with great ease, remember that the conditions of that sale are set by you. Is the objective to make money or fill the hotel as soon as possible?. Managing your distribution and controlling cancellations instead of them controlling you is in your hands.

How to calculate the real cost of each sales channel

Cheap? Expensive? Are you sure that you are measuring each action you carry out precisely? Grab your calculator and read this.

Calculating the costs of each channel and of each optional proposal with which you are continuously tempted with is essential to understand its profitability, comparing and making well-founded commercial decisions.

The analysis that we propose is based on two premises: calculate the percentage and consider everything, astutely adding what is not usually evident.

10 examples:

1. How much does Booking.com cost?

logo booking.com 2015

Usual answer: “15%

Correct answer: 16,5%

Reasoning:

Booking.com commissions on your retail price and not only in your taxable base. If you sell at 110€ (100€ + VAT) and pay 15% commission, that will be 16.50€.

You earn 110€ but 10€ of those are taxes that go to tax office and are not part of your income. In the end, you end up with just 100€ and 16.50€ of those are 16.5%.

  • A few years ago, it wasn’t like this. It allowed hotels to show prices without VAT and it calculated the commission on that net price. When it began to demand final prices, VAT included, it started charging commission on that final price. In the end, it was a covert commission increase. Why were they still talking about “15%” as if nothing had changed?
  • When the VAT rose in Spain, in practice this was also an increase in commission. Did anyone complain?
  • If the IGIC (Canary Islands tax) is 8%, in practice hotels in the Canary Islands pay less commission than those in mainland Spain (10%).
  • Pays on VAT, and why not on the tourist taxes of some territories?… I don’t want to give any ideas.
  • It is not about charging “15%+VAT” like we often hear. No, their invoices do not have VAT because they are among European countries. It is an apparently clean VAT.

Charging commission on taxes is a disgrace. Since it already does it (and nothing will change because of its dominant position), the hotel must at least be intelligent enough to re-calculate it internally and know about what numbers we are really talking about.

2. ¿How much does Expedia cost? (in its merchant model)

expedia-logo 2015

Usual answer: “22%”.

Correct answer: Between 24,2% and 34,2%

Reasoning:

Expedia also charges commission on taxes, so we should be talking about 24.2%. Also, in bookings with packages with 10% discount, your accumulated reduction of income will reach 34.2%.

As an example, a hotel that sells 10,000€ on Expedia of which 7,000€ are complete price and 3,000€ are discounted-package prices, the average cost of Expedia is 2,520€, which is 27,2% commission.

The numbers are like this: 8,000€ x 24.2% = 1,694€ plus 3,000€ x 34.2% = 1,026, which results in a total of 2,720€. Dividing it by 10,000€ of production, we get the average commission.

3. ¿How much does it cost to be Preferred with Booking.com?

logo booking.com y hotel preferente

Usual answer: “17%, in other words, 2% more”

Correct answer: 18,7%.

More precise answer: For the sale that you already had without being preferred, you don’t pay anything extra. For the new sale that being preferred, you pay between 20% and 60% commission. It all depends on the volume of new sales generated. Calculate it yourself.

Reasoning:

A hotel that sells 10,000€ + 10% VAT and its non-preferred commission is 16.5%, pays 1,650€ in commission.

It decides to become “preferred”, and its commission rises to 18.7%. Let’s say that its sales increase to 12,000€ (20% more).

Therefore, it pays 2,244€ in commission.

  • For the 10,000€ that it sold before it pays the same, therefore 1,650€
  • For the new sale, 2,000€, it’s paying the difference, in other words, 594€. This means 29.7% of the cost for this new sale.

Therefore, depending on the increase in sales that accessing the Preferred programme has meant, you will be paying one commission or another. Do your own calculations but you will probably be surprised.

Sale increase Comission on new sale
5% 62,7%
10% 40,7%
20% 29,7%
30% 26,0%
40% 24,2%

4. And over-commissioning on Booking.com?

Usual answer: “The commission that I choose”

Correct answer: The commission that you choose, taking into account once again that you will pay Booking.com for amounts that are going straight to the tax office.

More precise answer: Just like in the Preferred programme, the cost on the sales that you already had does not change. However, the cost of the new sale generated by over-commissioning oscillates between 30% and 113%.

A hotel that sells 10,000€ and its preferred commission is 18.7%, therefore pays 1,870€ in commission.

It decides to over-commission “for a few days because it has low occupation” and sets the commission on the extranet at 22% (in truth, 24.2%)

Let’s say that its sales rise to 14,000€ (40% more). Therefore it pays 3,248€ in commission

  • For the 10,000€ that it sold before it pays the same, in other words 1,870€
  • For the new sale, 4,000€, it’s paying the difference, in other words 1,518€. This means 37,9%.

Therefore, depending on the sales increase that over-commissioning has meant, you will be paying one commission or another:

Sale increase Comission on sale increase
5% 113%
10% 68,2%
20% 45,7%
30% 38,2%
40% 34,4%

5. ¿How much does Booking Genius cost?

logo booking genius

Usual answer: “10% price discount for Genius clients”

Correct answer: Apparently simple:

  • For non-Genius clients there is no increase in cost. They will pay normal commission.
  • For Genius clients (both those who booked before at the hotel at a price without discount -cannibalisation- and those new ones who would not have booked at the hotel had it not been for Genius) the commission will be of 26,83% (18.7% for preferred + 10% discount in price). It would be of 24,8% were it not preferred.

Reasoning:

Let’s go back to our preferred hotel that sells 10,000€ on Booking

It decides to participate in Genius. Let’s use this hypothesis:

It increases sales by 20% but it has 10% cannibalisation at the same time.

○      9,000€ from non-Genius clients at preferred commission (x18.7%)=1,683€

○     1,000€ from Genius clients that used to book the hotel and that now still book but with 10% discount (x28.7%) = 287€

○     2,000€ of sales from new Genius clients (x28.7%) = 574€

The total cost rises to 2,544€, which on a sale of 12,000€ is a cost of 21,1%

We could consider a third block, that we omit to simplify calculations: Clients that used to book through another channel (i.e. the official website) and that now book on Booking.com because they have an additional 10% discount. The damage is terrible because the cost shoots up. Every action of lowering price exclusively to a channel results in a large impact in sales on another channel (since most of them compete for the same clients).

To see how the cost of Booking Genius changes, we need to evaluate 2 variables: degree of cannibalisation and real increase in sales.

Cannibalisation

Real increase in sales

Total cost

0%

5%

19,2%

10%

19,6%

20%

20,4%

5%

5%

19,7%

10%

20,1%

20%

20,8%

10%

5%

20,1%

10%

20,5%

20%

21,2%

6. How much does a channel with commission + fixed costs? Or commission + volume discount on sales?

Usual answer: “The agreed commission”.

Correct answer: The result of applying the fixed costs or volume discount to the sale and adding said percentage.

Reasoning:

For instance, a hotel that pays 20% and a fixed monthly rate of 400€.

Let’s say that its yearly sales are of 80,000€.

  • The commission cost is 16.000€
  • The fixed-rate cost is 400€ x 12 months = 4,800€

The total cost is therefore 20,800€, which on a sale of 80,000€ is a total of 25.5%.

The less that your fixed-rate channels less, the larger your commission will be, in many cases reaching 30% or 25%. Because many times we just look at the commission cost, we do not realise this.

The same calculation applies to the volume-discount channels over sales.

7. ¿How much does it cost to participate in a Groupon promotion?

groupon logo

Usual answer: “The agreed commission, I negotiated just 15%”

Correct answer: To the commission, you must add the considerable decrease in price that they ask in order to participate: 40%-50%?

Reasoning:

For instance, let’s have a hotel that decides to take part in a promotion. Its price is 100€ and they ask for 50% discount, in other words 50€. On top of that, they have to pay up 15% of all income.

Therefore, the real cost of Groupon in this case rises to 65%.

Let’s ignore once again the new cannibalisation sales effect that occurred in other channels at correct prices and that are done now through this channel without such elevated costs.

8. ¿How much does a merchant channel cost?

tui logo

Usual answer:Nothing. I have no cost”.

Correct answer: True, there is no variable cost but there is a cost in loss of opportunity of having been able to sell at a higher price and earning more.

Reasoning:

For instance, a hotel that sells 10,000€ through a channel like TUI with whom it works only with net rates. On those 10,000€ it has no costs. What the hotel does not look at or tries to quantify is how much TUI has earned with the revenue on these rates that you give as net.

9. How much do my corporate sales and sales via agencies cost?

corporate hotel

Usual answer: “The commission that I pay the agency. Or the salary of my sales rep.”

Correct answer: It depends on the volume of sales that this sales rep or agency generates.

Reasoning:

Let’s say that our hotel has a sales rep for companies with a gross salary of 20,000€, which results in 27,000€ approximately if we add costs such as social security.

Let’s say that his/her work generates sales of 85,000€ for the hotel.

The cost of the corporate channel is no other than 27,000€ divided into 85,000€, which is 31%.

10. And how much do the direct sales through my website cost?

web hotel

Usual answer: “The commission or fixed rate of my search booking engine.”

Correct answer: A lot more. The sum of all the costs associated to the direct sale divided by the production.

Reasoning:

For instance, let’s have a hotel that sells 200,000€ per year on its website/engine.

Let’s count the costs of direct sales:

  • The booking engine commission (let’s say 3%) which is 6,000€
  • Adwords in Google, 4,000€
  • Website cost (9,000€) to amortise over 3 years, which is 3,000€ per year.
  • Company in charge of the SEO: 1,200€ per year
  • Plus Profile on Tripadvisor, 2,650€ per year.
  • Tests carried out to appear on the price-comparison website Trivago: 970€
  • Web hosting: 350€ per year

If we add all of these costs we get 18,170€, which over a production of 200,00€ is a cost of 9% on the direct sales cost through the website.

And now use all of this knowledge

Costs are necessary, of course. It’s also acceptable that some costs are bigger than others. Getting different clients costs different amounts. What we are saying here is that the measurement should be done correctly.

With these considerations, next time that a sales rep or an account manager describes the “low costs” of his attractive proposal, take out the calculator in front of him and ask him the uncomfortable questions that we have posed on here. He won’t know what to say.

After, when he’s gone, study your proposal and contrast it to what it would bring you, taking into consideration what you would have remaining from other channels and, especially, in comparison to all those other cheaper initiatives that you rejected for years for being “too costly”. You will find that they are not as costly as you first though. At Mirai, we could put forward a few of them for you.

Cancellations on Booking.com: 104% more than on the hotel website. Expedia, 31% more

Many hotels do the right thing by offering better stock and price conditions to Booking.com, and of course to their own website, rather than to Expedia after seeing that they make more money that way, since the net price (after taking out the commissions) is almost always superior.

However, rarely are these same decisions made depending on cancellations and the costs that these generate per channel. It’s not easy to estimate or measure this cost since it doesn’t leave a direct trail (albeit an indirect one) on the average price or production of each channel, but we should not ignore it nevertheless.

We will analyse these costs as well as determine who is responsible for the fact that cancellations are shooting up: the hotel or the channel?

Do cancellations vary subject to the channel?

We have chosen 40 of our channels and analysed the cancellations (% on room nights) in the last four months (January-April 2016) of our three most important online channels: Booking.com, Expedia and the website itself. The results are as follow:

How cancellations vary subject to the channel

According to our analysis, the Booking.com cancellations are 104% more than the direct channel ones, while they are 31% up in the case of Expedia. The relation between Booking.com and Expedia is +56% in favour of the former.

Booking.com, Expedia and official website cancellations

It’s important to note that Expedia’s cancellation varies a lot subject to the model that hotels are using. The cancellation of the Package rate is very low, less than 3% (airline rates are mostly non-refundable); the Expedia Collect (Expedia charges the client) cancellation rate is around 12% and the Hotel Collect (pay directly at the hotel) cancellation rate is close to Booking.com levels at around 35%.

An example will help to better illustrate how distribution costs vary per channel if we take the opportunity cost into account had we not sold any of the rooms after the cancellations.

Let’s work with 100 room nights generated by each channel at a price of, let’s say, 150€. We then assign the resulting cancellation percentage from our analysis to each channel. We assume 85% recovery of these cancellations (an optimistic percentage), in other words, that the hotel manages to sell them through the same channel after the cancellation and that they can still maintain the sale price of 150€. After adding this opportunity cost, we see how the final commission of Booking.com would go up to 24.8% (increasing by 4 points), the Expedia one to 26% (increasing by  4 points) and lastly the website one (in which we assume 8%) which would go up to 11% (+3 points).

SCHEME2

These numbers would vary in the different hotels. We invite you to make this calculation in your particular case and to start assigning cancellation costs to each channel in order to have a more complete picture of your distribution.

Why is Booking.com the channel with the most cancellations?

If the hotel applies the same cancellation restrictions to the three channels equally, why are the results so different? We believe that the reasons are as follow:

  • Fraudulent bookings. The truth is that most of these bookings (like, for example, to obtain a visa to enter a country) go through Booking.com, since it’s the most popular and important OTA in the world. These are bookings that the hotel usually identifies as fraudulent and cancels on the spot, therefore with little impact.
  • Payment method.  Expedia generates many of its bookings in the Expedia Collect mode, where Expedia charges the client directly (not necessarily non-refundable). It has been psychologically proven that you pay in advance when you are sure that you will be going, and therefore have less of a chance of cancelling. Also, this payment method avoids any kind of fraudulent booking.
  • Package rates. A high percentage of Expedia bookings (depends on the hotel) include a flight, which is usually a non-refundable rate. The cancellation of these bookings is, therefore, very low, thus considerably reducing Expedia’s cancellation average. It would seem fairer to compare Booking.com with Expedia in its mode of paying directly at the hotel, although unfortunately the data that hotels have is not always broken down in this way, thus making it very difficult to measure.
  • OTAs work more on inspiration. The hotel doesn’t with its website. Mail marketing campaigns are commonplace to generate booking interest. Many clients end up doing so but, since it’s so casual, they book first and then see if they have time and money to actually go. In any case, cancellation is free. The inspiration phase is still far from the booking phase and therefore there is a higher probability that many bookings end up being cancelled.
  • Culture of each channel. Booking.com is increasingly encouraging clients to book even if they’re not sure that they will travel. For that, it employs dozens of booking accelerators that pressure clients with a message such as “book now or you’ll lose the room”.  Here is a message that it regularly sends to its clients:

2016-05-19 (1)

This speculation suits Booking.com. Even if many rooms are cancelled, many won’t be. The hotel will most likely use Booking.com again to sell them, since it is the channel that best works with last-minute bookings.

Booking.com itself made a test some time ago where it notified the client when the hotel lowered its booking price (so that the client would cancel and make a new booking). This is an excellent service for the client but it was not received with open arms by the hotels, who themselves had an answer to it: make all rates non-refundable. In the end, Booking.com stopped this practice but it’s still active on www.tingo.com, www.triprebel.com and www.yapta.com

The traditional OTA discourse is that the final result is what matters and it ends up benefitting the hotel if it’s a positive one. Cancellations aren’t a problem. This statement is only partially true and supports itself on how hotels fail to calculate the impact of cancellations.

  • The hotel-website client is different. Our experience tells us that this client is the most loyal client to the hotel and, therefore, speculates less. If he books at your hotel, he almost always goes (unless he has a setback).

The truth is that Booking.com knows that all of these cancellations are a problem for the hotel and they are working to reduce their impact. For that, they recently introduced two new tools to facilitate charging the bookings from their extranet and there seem to be movements to exempt the hotel of non-payments by clients, with Booking.com taking on that risk. The latter seems like a great move by Booking.com. We will await more details on the matter.

What to do to take into account the cancellations of each channel?

As we’ve seen, even if you apply the same distribution strategy and cancellation restrictions, each channel will have a different percentage and cancellation notice period. These cancellations are costing you money and you should look to assign them to each channel.

If we penalise Expedia for their large commission (closing sales or increasing prices), we should also do the same to other channels with a higher cancellation impact.

If Booking.com has the largest index of cancellations, you should consider applying a more restrictive cancellation policy in comparison with the rest of the channels, especially in comparison to your own website and particularly during high season. A holiday hotel, for example, would add a 21-day cancellation notice period for its hottest dates on Booking.com (or, directly, non-refundable) and would maintain 7 days on its website. An urban hotel, during dates of high demand, could do the same with 24 h. and 72 h.

The other tool the hotel has is the price. Increase the price on the channels with a higher cancellation rate. If you manage to monetize them in each channels (unsold rooms, average price reduction, staff costs, etc.), and bring it to a total cost, you should add it to the commission of each channel, which would give you a more complete picture of reality. The difference in cost between Booking.com and Expedia would be reduced and, on the other hand, would further increase between OTAs and your own website.

Conclusion

When we compare the costs per channel, we should broaden the analysis and have a global view. Direct commission is just one of the many costs that each channel has. Other ones that are also known, albeit rarely calculated properly, are the yearly/monthly fixed costs and the sales rebate. On the other hand, we rarely include the cancellation costs in this analysis.

If we were able to monetize it, we would realise that the channels that appear to be more profitable are not as profitable as we think. Once again, it continues to show that the direct channel is the most profitable one of them all and one that the hotel should strongly commit its long-term strategy to.