September 19, 2017
New Expedia CEO has a hard act to follow
Everyone at Expedia says Okerstrom will carry the company in the same direction it’s been going. But Expedia’s fleet of websites doesn’t have open waters ahead of it.Read more
Booking.com now claims to be the number one online hotel reservation service in the World, and its flat commission model has been replaced by one of bidding for position on the first page of a destination, with hotels paying over 20% in commission to be on the first page.
Booking.com is obsessed with providing the best possible prices to consumers. J.D. Power and associates reported that Booking.com has the highest customer satisfaction rate of independent travel websites, mainly due to competitiveness of pricing.
This obsession with price causes the relationship that hoteliers have with booking.com to frequently be one of love-hate. They love the reservations that Booking.com brings in, but they hate it when they have to sell for low prices, preventing them from differentiating their hotel on any other factor.
To add insult to injury, Booking.com’s flat commission model has been replaced by one of bidding for position on the first page of a destination. It is not infrequent that hotels pay over 20% in commission to be on the first page of the recommended properties in their city.
These issues and Booking.com’s market power, make its relationship with hotels uneven. Hotels might be receiving significant revenue from the reservations that are made through the site, but if they depend on Booking.com for their reservations, they have little bargaining power.
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