We had warned it and it is here: Booking.com's Early Payment Benefit makes an appearance in Spain
Revenue 07/03/2019
No more than three weeks ago we alerted hoteliers about the new initiative against direct sales that Booking.com had launched in certain countries. Well, Early Payment Benefit (that's what it's called) already works in Spain and we have witnessed first-hand the effect it has had on the first victims who have suffered it in our country. If hoteliers don't avoid it, Early Payment Benefit is here to stay.
Let's get into the background. On the 12th of last February, alarm bells went off when one of our clients, who operates internationally, informed us of strange disparities in the prices he received from Booking.com. In fact, thanks to Price Seeker, we were able to verify that he was right and, pulling the thread, detect Early Payment Benefit, the new functionality of the OTA giant.
We will not spend too much time explaining in detail what it consists of (you can do so here), we will simply limit ourselves to remembering that it is an automatic price equalization system via unilateral discounts, that is, without informing the hotelier of its activation. In other words, at the time of their customer's reservation, Booking.com runs a comparison and if your official website offers a cheaper price, they first match it and then camouflage the discount under the guise of a, and we quote verbatim , “reduction for early payment” .
According to the information we have, it is possible to directly request Booking.com to deactivate this new “service” which, although it does not entail a direct cost for the hotelier, since they deduct the price difference from their own commission, Its importance due to the value it brings to building customer loyalty (yours) is incalculable, helping them to continue positioning themselves as the most economical channel.
In any case, at Paraty Tech we would like to share with you again certain recommendations that can minimize the effect of this and other similar initiatives that may arise, and which we will not always be able to anticipate as on this occasion:
We knew that OTAs mobilized quickly, but even we have been surprised by the expansion and implementation capacity of any of their developments. Today more than ever, we appeal to the extreme importance for hoteliers of implementing the essential resources to keep meticulous control of their prices in all the channels through which they distribute their inventory. Technology, in short, will save you a lot of effort, time and trouble, while at the same time it will help you foresee and intuit these types of actions that are so harmful to direct sales.
Let's get into the background. On the 12th of last February, alarm bells went off when one of our clients, who operates internationally, informed us of strange disparities in the prices he received from Booking.com. In fact, thanks to Price Seeker, we were able to verify that he was right and, pulling the thread, detect Early Payment Benefit, the new functionality of the OTA giant.
We will not spend too much time explaining in detail what it consists of (you can do so here), we will simply limit ourselves to remembering that it is an automatic price equalization system via unilateral discounts, that is, without informing the hotelier of its activation. In other words, at the time of their customer's reservation, Booking.com runs a comparison and if your official website offers a cheaper price, they first match it and then camouflage the discount under the guise of a, and we quote verbatim , “reduction for early payment” .According to the information we have, it is possible to directly request Booking.com to deactivate this new “service” which, although it does not entail a direct cost for the hotelier, since they deduct the price difference from their own commission, Its importance due to the value it brings to building customer loyalty (yours) is incalculable, helping them to continue positioning themselves as the most economical channel.
In any case, at Paraty Tech we would like to share with you again certain recommendations that can minimize the effect of this and other similar initiatives that may arise, and which we will not always be able to anticipate as on this occasion:
- Technology, technology and technology : Although we have already stressed the importance of having a Rate Shopper, we now emphasize how effective it is that it is also integrated with your booking engine and with a price matcher with OTAs. There are several on the market, although the only one that operates in real time is Parity Maker.
- Beneficial disparities for your hotel : we invite you to consult in our blog everything related to the different types of beneficial disparities for your hotel, and we list some of them below: greater flexibility in the conditions of your reservation and cancellation policies, facilities payment, exclusive privileges available only for reservations through the official website, favorable discrimination of your inventory, segmentation and personalization ... If the price constitutes a barrier, look for other ways to differentiate yourself so that, by paying the same amount, your customers enjoy experiences more than stays.
We knew that OTAs mobilized quickly, but even we have been surprised by the expansion and implementation capacity of any of their developments. Today more than ever, we appeal to the extreme importance for hoteliers of implementing the essential resources to keep meticulous control of their prices in all the channels through which they distribute their inventory. Technology, in short, will save you a lot of effort, time and trouble, while at the same time it will help you foresee and intuit these types of actions that are so harmful to direct sales.
