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Is Genius making an Idiot out of you?

I am hoping that this article might be mute for all of you and that fewer and fewer hotels are convinced that Genius benefits their business, but lets look at some of the reasons hotels join and then why they definitely should leave…

How hotels think that Genius will benefit

First of all, for those who aren’t aware of the Genius programme, Booking.com sell this to hotels as a way of filling your rooms to their preferential guests and all you have to do to see the business roll in, is offer an additional 10% commission.

These ‘preferential guests’ are supposed to a closed user group that travel frequently and therefore Booking.com say that by joining this programme, you are more likely to cream off these frequent travellers.  But the fact of the matter is that ANYONE can join their programme. To join you don’t need a business email that can be verified or a VAT number – basically this programme is open to anyone. What hotels are then doing is giving an extra 10% commission to travellers that would have booked anyway!

Booking.com also sell this as a way of selling distressed inventory during low season but as we all know, dropping rates and adding more commission that reduces our bottom line never, ever works. Some hotels have the attitude of ‘sure the rooms aren’t going to fill, so why don’t I try and sell them whatever the cost’ but that is an incorrect and very dangerous sales strategy.

Hotels often don’t have the facts or metrics to judge how this programme is performing and a lack of knowledge means that measurement and true value or disruption to your business can’t be understood.

Hotels often feel ‘bullied’ into joining and they have a fear of leaving – they are simply frightened by what they feel Booking.com would do to their business.  Is fear and intimidation a good enough reason to join and stay?  Absolutely not.  I say many times that hotels and OTA’s need to have a partnership not a one-sided relationship and Genius definitely tips the balance toward Booking.com.

And why should I leave Genius?

  • Hotels often turn on this programme, thinking that they will only use it during low season, however the fact of the matter is that hoteliers often simply forget to turn it off and end up accepting bookings during High Season.
  • These High Season bookings are then subject to the additional commission so you have immediately diluted your bottom line.
  • Because this programme is offered to everyone, you are basically displacing business that you would have secured anyway.
  • How do you think your corporate guests feel if they see that they can secure a lower rate if they book via Genius, rather than if they book directly with you at their ‘very special, confidential, negotiated rate?’ Not too happy I guess
  • And what about other contracted business such as weddings?  If you are selling yourself as offering exclusive rates to your own direct customers and they find heavily discounted rates through Booking.com’s Genius programme, don’t you think they would have the right to be very irritated.
  • When you work out the financials (and I won’t bore you with the figures), you are actually losing around 30% of your revenue – yes 30%!  Are you really happy with that?
  • You can only close out 30 days in the whole programme. For any busy hotelier this is not enough and you will end up selling dates when you are disrupting and displacing higher rated business.
  • Ask yourself, why you would do something that benefits someone else’s loyalty programme?  Shouldn’t you be putting time, effort and money into building your own database and managing that better?
  • There are many better ways of gaining business – yielding rates better / having better guest communication / having better guest intelligence / selling your property on experience rather than discounts / actually knowing your guest and their needs. Put the effort into that and not taking the easy option of allowing an aggressive OTA to fill your hotel at such a high cost of sale
  • Remember that your hotel will still appear on searches whether you are part of the Genius programme or not.  Being part of that programme does not guarantee higher rankings

The bottom line is that you should never increase dependency on an OTA.  Whether it is Booking.com or any other channel, you need to be more independent and learn how to stand on your own.  There is a place for these channels and I have never once said that you shouldn’t work with them but increasing dependence in favour of actually working on your own direct strategy is simply a mistake.

(and for all things revenue just ask@rightrevenue.wpengine.com)