Booking.com is one of the world’s most popular hotel booking platforms, offering travelers a variety of accommodation options just a click away. However, for hoteliers, using this platform can entail considerable costs in the form of commissions. In this article, we’ll dive into the world of Booking.com commissions, understand how they work, and explore ways to reduce them.
Understanding Booking.com commissions
How do Booking.com commissions work?
Booking.com operates on a commission model, which means that hoteliers pay a certain amount for each booking generated by the platform. This commission is based on the total amount of the booking and can vary according to various factors.
What is Booking.com’s commission rate?
Booking.com’s commission rate is not fixed and can vary from one establishment to another. It depends on a number of factors, including the size of the establishment, its location, the type of clientele targeted, and the hotel’s relationship with the platform. In general, it ranges from 17% to 23% of the total amount of the reservation.
When is it due?
Booking.com commissions are generally invoiced after the guest has stayed. This means that the hotel only pays when the guest has actually stayed at the establishment. However, it is essential to ensure that funds are available to cover these costs when they are invoiced.
Is commission paid on overbooking?
Booking.com does not generally charge commission on overbookings. If a customer makes a reservation, but the hotel is unable to accommodate the customer due to overbooking, the commission is not applicable to that reservation.
Is commission paid on cancellation?
If a customer cancels a reservation in accordance with the hotel’s cancellation policy, Booking.com will not charge a commission. However, if the cancellation is outside the hotel’s policies, commission may still be due.
To find out more about Booking.com commissions, we recommend you go directly to their website.
Commission invoices and VAT/GST charges
Booking.com commissions are generally invoiced exclusive of VAT or GST. It is essential to take these costs into account when managing your establishment’s finances.
Reduce commissions by encouraging direct bookings
Reducing Booking.com commissions can have a significant impact on your hotel’s profitability. To reduce the commissions paid to Booking.com and similar platforms, it’s essential to encourage customers to book directly with your establishment. Here are three key strategies for achieving this:
1/ Promote direct bookings:
An effective way to reduce Booking.com commissions is to encourage customers to book directly through your establishment’s website. Here are a few ways to achieve this:
- Preferential rates: Offer special rates or exclusive offers to customers who book directly. Make sure these offers are clearly promoted on your website.
- Loyalty program: Set up a loyalty program to reward regular customers. Offer them benefits such as discounts, upgrades or special services.
- Targeted communication: Use e-mail marketing and social networks to inform your customers about the benefits of direct booking. Let them know that this guarantees the best rate and direct communication with your establishment.
2/ Having a good digital hotel ecosystem:
A well-built digital ecosystem can contribute significantly to reducing Booking.com’s commissions. Make sure you have the following tools in place:
- PMS (Property Management System): An effective PMS allows you to manage reservations, check-ins, check-outs and daily operations seamlessly.
- Channel Manager: A channel manager helps you automatically synchronize rates and availability across all booking platforms in real time, reducing the risk of overbooking.
- Booking Engine: A powerful booking engine on your website makes it easy for customers to book directly, offering a user-friendly experience.
- CRM (Customer Relationship Management): Use a CRM to track and maintain relationships with your customers. Personalize offers and communications to build customer loyalty.
- Payment system: A secure payment system ensures smooth and secure online transactions for your customers.
- Website: A professional, user-friendly website is essential for attracting and converting visitors into customers.
- Communication hub: A centralized communication hub enables efficient management of customer requests, staff queries and internal messages, helping to improve internal and external communication.
- Connected tools: Integrate connected tools such as connected locks for your hotel rooms. Connected locks enable secure, easy access to rooms for guests, while making key management easier for staff.
- IT security system: Make sure you have a robust IT security system to protect your guests’ and your company’s sensitive data.
3/ Optimize fill rates:
Another crucial strategy for reducing commissions is to optimize your establishment’s fill rates. Here’s how:
- No more parity: You need to offer a higher price on OTAs, to ensure that your website is the most competitive channel even after all discounts (Genius, Rewards, etc.) have been applied. Your direct price is the best alternative for travelers!
- Dynamic pricing: Adapt your rates to demand and seasonality. Use dynamic pricing tools to automatically adjust prices in real time.
- Distribution channels: Identify and focus on the most profitable distribution channels. Reduce your dependence on high-commission distribution channels.
- Availability management: Ensure accurate availability management. Avoid overbooking by properly synchronizing your distribution channels.
- Marketing strategies: Invest in targeted marketing campaigns to drive customers directly to your website. Use online advertising, search engine optimization (SEO) and social media to increase the visibility of your establishment.
Understanding and reducing Booking.com commissions is essential for hotels seeking to maximize revenue and profitability.
Reducing Booking.com commissions by encouraging direct bookings is an essential objective for hotel establishments. Promoting direct bookings, having a complete digital ecosystem, and optimizing occupancy rates are all strategies that can help achieve this goal, increasing your company’s profitability while delivering an enhanced guest experience.