Some of you our customers have asked why you are not listed on various sites within the BookingCenter Network. Unfortunately, changes in the distribution business as a result of the slow-down in the travel industry are affecting us all and we must work together to ensure we receive the best distribution for the best price.
If you've been following recent travel news, you may have noticed these subtle and yet far reaching changes. Many of these companies- including Yahoo and AOL – are moving to a "pay for play" model by increasing fees and/or commissions. This is having a ripple effect across all businesses in the supply chain. Due to the slow-down in travel spending and an overabundance of hotel room choices, these portals are offering preferred placement for properties that are paying higher commissions. For example, only properties paying 20% commissions will even appear on some sites. This has been happening since October and we expect it to continue into the near future.
This trend will directly impact all BookingCenter Network Clients, as we expect to announce commission increases before the end of the year. Let me assure you that we do not like nor benefit from any rate increases. As the distribution business models change, we will work to maintain the best possible rates for our customers using the entire travel marketplace - WorldRes, Sabre, Galileo, Amadeus, WorldSpan and thousands of others.
Commencing January 1st, we will offer our customers the ability to to distribute their inventory at the commission level they feel comfortable paying. For example, AOL is currently listing hotels that offer AT LEAST a 20% commission. If you want to sell rooms at AOL, you will have to be willing to pay 20% commissions to do so (unless you are a Bed and Breakfast or Inn, which will be provided to AOL customers at 15%). On the low end, travel sites - such as www.PlacestoStay.com - are going to accept 15% commissions for bookings. Unfortunately, this is the low end and will leave you off sites such as AOL.
The good news is that we expect the network to get more intelligent and allow better 'filtering' of properties in smaller markets (ie, Des Moines, Iowa) to be presented at lower commission rates than those at large markets (ie, San Francisco, CA). While we want to continue offering the current 10% commission model, it's not clear that ANY site currently contracted by BookingCenter will even present a 10% site.
What can you do? Can you get a lower commission rate going direct to a provider such as WorldRes?
No you cannot. We are and will remain the value leader in the field of distribution. And we will continue to make managing your distribution easier. WorldRes and BedandBrakfast.com have moved their rates to 15% and 20%. Expedia is at 30%!
Don't lose hope! BookingCenter will continue to push for better commission rates on your behalf. We are your advocate and understand that the higher the commission, the less the independent property can participate in the BIGGEST travel opportunity - Internet travel. As demand rises and consumers begin traveling again, we will see commission rates erode.
We expect to have more specifics that allow you to 'pay for play' in different channels by January 1. Until then, please know we are working hard to keep the independent operator strong.
Written by: Jeff Tweddale
Jeff is the President of BookingCenter, a provider of Property Management Software, online availability, booking tools and access to online distribution networks.