Booking.com's online payments, a double-edged sword.
There's no doubt that one of the few weapons you have at your disposal to take on the OTAs is controlling your rates. Keeping the most competitive price on your website is paramount and the mantra of a good Revenue Manager.
So why is Booking.com outselling me when my rates are better? Probably because of Booking.com's Online Payment.
I'll take care of it (or I'll cover for you), but...
The Online Payment mode was launched in October 2020 with the intention of making life easier for the hotelier. From that moment on, Booking.com is responsible for the payment of bookings made through its platform. No more uncollected no-shows, no more penalties for unpaid late cancellations, no more lost bookings due to not offering alternative payment methods such as bank transfer or PayPal. All advantages, right? What can go wrong?
Here's the double-edged sword. Payments are not received automatically, Booking.com decides when you receive them depending on the chosen payment method: payment by virtual card or payment by bank transfer. More importantly, you lose control over the price of your rates. From now on you will only see the net price of the bookings and you will give free rein to the disparity of the RRP.
And how can it lower prices without you noticing? By taking over part of the booking fee or, in other words, by lowering your commission to make the price more attractive. In short: better price, more bookings.
And how do I deal with it?
- Consider opting out of Booking.com's Online Payments programme.
- Make yourself responsible for payments by activating the COF (Credential On File) in your virtual POS and automate the sending of the payment link for all your bookings.
- Consider accepting other forms of payment.
As with all sales strategy decisions, you will need to study the situation; weigh the pros and cons and determine what is most profitable for your hotel.
For more information on how to plan a good rate strategy, see our services.
