Hotel avoids high online commissions by getting returning guests to book directly

A small boutique hotel based in Melbourne says it has a policy of trying to ensure no returning guest has to book through a third party site as a way of combatting high commissions charged by online booking sites.

The revelation comes after Fairfax reports hotel chains increasingly offering perks for customers who make direct bookings with them rather than through larger online booking sites, like Wotif and Expedia. 

The shift has to do with a rise in commissions taken by online booking sites in Australia, which traditionally used to be lower than the global average of about 20 to 25%.

Expedia’s takeover of Wotif  last year has been seen as the catalyst for the rise in commissions, with associations representing hotels, such as the Australian Hotel Association, warning at the time the industry consolidation would see a rise in commission rates.

An operations manager for the small boutique hotel in Melbourne told SmartCompany this morning online booking sites were taking “the best part of 15%” in commission at the 34-room hotel.

The manager, who does not wish to be named, says about 70% of the hotels’ bookings are direct bookings, which came down to a successful policy of “personalising the experience for guests who book directly”.

He says while the online booking sites are still welcome at the hotel and are especially “vital” for attracting people coming to Melbourne from other places, the goal was to capture return bookings away from the booking site.

“It’s important to give us new business, but important no one books through those sites twice,” he says.

The manager says unlike some of the larger hotels reportedly offering perks to customers, the business was not about “undercutting ourselves” by offering huge discounts to customers who booked directly.

“As a blanket rule we don’t discount direct, but we tailor the experience to create more value for guest,” he says.

“We’re able to personalise the stay more by the direct contact,” he says.

Acting chief executive of Tourism Accommodation Australia, Carol Giuseppi, told SmartCompany it is “certainly” a strategy of hotels to encourage direct bookings.

She says most hotels, including smaller regional properties, are looking at other channels to market their accommodation offerings.

She says TAA was interested in trying to curb some of the “quite exponential” rises in online booking commissions seen in places like Europe.