Remember that nice person who set up your vacations for you? Your travel agent was someone you got to know over the years, someone you valued for that increasingly rare human touch.
The travel agent made all your lodging arrangements and took a 10 percent commission from the hotel for doing so. Creating your itinerary with him or her took the headache out of planning your trip, and you knew that what you spent would get you what you expected.
The field has changed, leaving customers and hotels short changed.
Over the years, travel agents in offices have given way to online travel agents (OTAs), which means websites like Expedia/Orbitz/Travelocity/Booking/Priceline and, more recently, mobile travel agents such as Hotel Tonight/Expedia App.
The average OTA commission is now 15 percent to 50 percent, yielding less profit to the hotel as more and more business comes by computer or phone rather than direct.
Trouble is, with convenience comes lower quality for the customer and higher costs for the hotel – and those headaches customers thought had gone away are back.
The guest may find himself getting a room that isn’t what he bargained for. It’s not as high quality as the price would indicate. Blame OTAs that demand a stiff commission from the hotel for booking.
And while customers often have to change their plans, the website won’t give their money back, making them contact the hotel and beg for a chance to use their reservation another time. The hotel, meanwhile, just lost a chunk of money and won’t be in the most accommodating mood.
Besides, many websites require that a hotel make a certain percentage of rooms available or demand that the hotel stay open until it’s sold out to that website. Last-room availability sure does have its drawbacks.
Many customers may not realize that if they find a good rate online, the hotel will gladly match or better it because it will still make more money if the guest calls direct. But people have gotten used to clicking a button rather than having to wait while on hold, and they like booking quickly via web and mobile.
For the best of both worlds, putting state-of-the-art technology in the service of customer satisfaction (remember, the hotel’s a customer, too), try IBC. The InnDependent Boutique Collection is a network of stand alone boutique hotels with a solution sure to please customers and hotels alike. Not only does it satisfy hotels that look fondly back to the travel agent era and its lower commission model, it appeals to travelers who want to book online and, since they’re automatically enrolled in IBC’s InnDependent InnCentives frequent traveler program, still get free nights.
IBC doesn’t require a set number of rooms or last-room availability, giving the hotel extra selling power. And on the customer’s end, it allows the guest to either book using a 4 p.m. hold or prepay with a credit card. And like Southwest Airlines seats, if the guest has to change his reservation, he can use it later.
Booking through IBC is more flexible than booking through an OTA or a mobile app – and more forgiving, not to mention profitable. Right now, the customer could go to Ibchotels.com and make a reservation, opting to either pay then or pay when he arrives. OTAs take your money on the spot.
The hotel tends to put the guest who pays the most money in the nicest room. It makes very little money on someone who books through OTAs that take 15 to 50 percent off the top. Priceline and hotels.com demand 50 percent from the hotel per booking – and the customer is often bamboozled. What kind of room quality do you think such customers get?
From a guest’s standpoint, IBC is an OTA. To the hotel, it’s a membership because the hotel has the ability to get additional benefits.
During the travel agent era, hotels thought low commission fees were scandalous. Now 10 percent seems like a bargain.
The hotel makes the most money if the customer books direct (because there is zero commission) or through IBC (because the commission is only 10%). And the customer has a better chance for a nicer room or nicer experience either calling or booking direct with the hotel or through IBC.
These days, because of the dominance of the OTAs, a hotel operator has very little influence over whether a guest is going to book online. But if you want him or her to stay with you and you want to get your hotels onto as many channels as possible, working with IBC is a win-win deal.– By Pamela Barnhill