By Theodore Holloway, CHDM, Director of eCommerce, Remington Hotels, and a member of HSMAI’s Marketing Advisory Board
There are a plethora of changes going on in hospitality marketing. On a recent call, members of HSMAI’s Marketing Advisory Board (MAB) discussed three of them: the potential implications of Booking.com’s upcoming policy to charge commission on resort fees, Airbnb’s decision to eliminate guest fees, and Google’s next iteration of its travel product.
1. Booking.com: Under its new policy, hotels will be required to pay Booking.com commissions on resort fees, as well as any extra fees charged for any stay booked on the platform. At the time of the MAB discussion, the policy had been recently implemented, on June 1, but as of July 2, Booking announced it will be delaying the new policy until January 1, 2020. Expedia announced June 24 that it will not be following Booking’s lead, but will downgrade hotels in search results if they charge resort fees.
One MAB member questioned the idea of resort fees in the first place. “It’s a customer-hostile process,” the member said. “From the Booking and Expedia side, I think they’re just being clever, quite honestly, and saying, ‘Hey, if it’s a mandatory fee that you’re charging the customer, you are hiding revenue. We should get part of that because it’s a mandatory fee.” The same member believes that eventually resort fees will be legislated out.
But another member said that resort fees are typically cleaning fees that are just passed along, not fees that the resort is profiting from. And another member noted that the resort fee commission will be prepaid at point of sale, and guests will know the total price before they book, adding a layer of transparency to the process.
2. Airbnb: Airbnb is eliminating guest fees for many property managers and hotels that sign up for its service in order to better compete with OTAs. Under the business model, new property managers in Asia-Pacific, Europe, Africa, and the Middle East will be charged a 14-percent host-only fee. Prior to this change, Airbnb charged hosts a 3- to 5-percent fixed fee and guests paid a fee of up to 20 percent of the listed rate. Existing property managers will have the choice to switch to the host-only fee or the shared host and guest fee. MAB members discussed the implications for listing hotels on Airbnb.
“My understanding is that they’re pulling from our rates, just like anyone else would, like Hotel Tonight does,” one MAB member said. Another member brought up hotels that are listed with Airbnb getting broken down by room type, which results in the hotels being listed multiple times on the site. A third MAB member said it will be interesting to see what happens with Airbnb and how it will affect hotel revenues if they are listed on the site.
3. Google: Google has announced that, beginning in August, it is combining its travel-related products — including the Google Trips app, Google Flights, and Google hotel searches — into one page called Google Travel. This will include an option that allows consumers to go straight to the Google Hotel Ads system, bypassing metasearch engines; hotel searches will be embedded instead of organic as they had been. Consumers will be able to use the Google Search and Google Maps functions to plan their trips as well as adding flight and hotel reservations from Gmail and Google Calendar.
“We did check with Google on that update, and it really shouldn’t have any impact,” one MAB member said. “Typically, you could still show up on a map, or you could show up in direct answers, or you could show up in one of those local searches, or you could still show up in organic. All it’s saying is you’re not going to show up sometimes now, because basically what would happen is your homepage would show up and your other page could show up. Now, it’s just going to be one page.”