Tag Archives: Online bookings

Booking accommodation direct – is it really cheaper?

Over the last few years, there has been a push in the Australian travel and tourism industry to encourage travellers to book their accommodation directly with the property owner or manager, rather than through an online booking agent. The advantages in doing so include:

  • Cheaper rates
  • Dealing directly with the provider makes it easier to reserve a particular room, satisfy any special requirements you may have, and handle cancellations or rescheduling directly
  • Instead of booking commissions (typically between 15 to 30 percent) being paid to overseas online travel agents, those commissions are retained by property owner, thus helping the local economy
  • Those booking direct may receive bonuses to reward them for this, such as free breakfast or free vehicle parking.

While booking accommodation directly has many benefits, let us consider just the cost of the room and conduct a small experiment with online booking rates. Note that booking over the phone directly with a property may offer better rates, but for the purposes of this experiment, we shall limit ourselves to online booking only, either directly with the property’s own reservation system or an online travel agent like Booking.com.

We shall try booking three very different holiday properties in Victoria on a weekend for two nights, from Friday 17th May to Sunday 19th May. We have chosen:

  1. A 5-star Melbourne city hotel with luxury rooms
  2. A family beach resort that offers holiday apartments
  3. A romantic mountain cottage retreat for couples

Luxury hotel – The Langham Melbourne

The Langham Hotel in Melbourne is one of the city’s most exclusive hotels and is consistently ranked by Tripadvisor as one of the top places to stay in the city, where opulence meets unparalleled service. It is situated in Southbank, across the Yarra River from Melbourne’s CBD.

Choosing a superior king room for two adults, we were quoted a total of $740 ($370 per night) when using the hotel’s own reservation system on their official website. Choosing to book the same room via booking.com gave the exact same quote – $740.

The verdict: same cost whether booking online direct or through an online travel agent.

Online booking at The Langham Melbourne using booking.com
Online booking at The Langham Melbourne using their own reservation service


Family beach resort – Silverwater Resort

One of Victoria’s most loved beach holiday destinations is Phillip Island. It is close enough to Melbourne to be within an easy drive, and far enough out of the city to feel like you are really on holiday.

The gateway to Phillip Island is the tourist town of San Remo, which is located at the start of the bridge which goes across the water to Phillip Island. There are several cafes, restaurants and hotels in the town, and some lovely beaches in the area. However, the town is most famous for the daily pelican feeding on the main beach, near the jetty.

One of the most family friendly places to stay at San Remo is Silverwater Resort. Spread out across this large property are 170 resort rooms and self-contained apartments. The resort’s many on-site facilities include an indoor and outdoor pool, tennis courts, jumping pillows, games room, gymnasium, extensive grounds to explore and a bar and restaurant.

We have chosen a two bedroom apartment for a family of four – 2 adults and 2 children. Going through the reservation system on the resort’s official website, the total cost for two nights was quoted at $526. Using booking.com, this was reduced down to $518.

Why is there an $8 difference? If you use an online booking website, they generally absorb credit card fees. However, if you book direct with Silverwater Resort, they charge you the credit card fees on top of the cost of the accommodation which is priced at the same rate at booking.com. It is quite surprising that Silverwater Resort is happy to give 15 to 30% of their revenue (between $77 and $155 for this specific booking) to booking.com, yet if you bypass the booking agent and book directly with them, thus meaning the resort gets to keep the $77 to $155 booking fee, they actually penalise you for this act of generosity and make you pay an $8 credit card fee.

The small print on the booking page explains the credit card fee if you book online directly with the property. “Payments made with with Visa or Mastercard will incur a 1.5% surcharge, and Amex will incur a 3% surcharge. This surcharge is not displayed on your reservation it is added automatically when your credit card is processed.”

The verdict: go through booking.com for a better rate than booking directly, due to the credit card fee.

Online booking at Sliverwater Resort using booking.com
Online booking at Silverwater Resort using their own booking system


Mountain retreat – Forest Edge Cottage

For those looking for seclusion and privacy in the mountains, but not too far from Melbourne, then Mount Dandenong is a great choice. Less than an hour’s drive from the city centre, the lush Dandenong Ranges are home to a number of romantic holiday cottages and we have chosen Forest Edge Cottage which is part of the Merrow Cottages group. This private holiday rental is suitable for couples and is an excellent weekend getaway.

The managing booking agent for this property quotes a weekend stay at $620 ($310 per night). However, the rate on booking.com is significantly more, coming in at $700 for the weekend, or $350 per night.

The verdict: book direct with the property for a much better rate than with online booking agents.

Onlike booking at Forest Edge Cottage using booking.com
Online booking at Forest Edge Cottage using their direct booking manager.

The verdict

Whether you book online directly with the property, or whether you use a third party online travel agent booking service like booking.com, the cost may sometimes vary. This depends specifically on the accommodation property chosen. Booking directly with the property may be cheaper in some cases, but in other cases it actually may be slightly dearer.

To encourage direct bookings, we urge all property owners to ensure those booking through their official website and booking system are offered the same or cheaper rates than they advertise through third party online travel agents.

The background behind the major online accommodation websites

When searching on the internet for accommodation, it can be quite a daunting task with many options available, particularly in large towns and cities. So a quick way to get an overview of these many options is to use an online travel website. They can display availability and pricing for many hotels at once, so at a glance you may be able to find something suitable without individually going to each hotel’s website.

There are many online travel websites which feature listings for accommodation in Australia and throughout the world, but most belong to either one of two large groups.

Online hotel booking brandsThe Priceline Group runs a number of websites including:

Expedia Inc is the owner of these popular websites:

It is important to realise that searching for accommodation within a specific accommodation group will yield the same results. So, for example, search for somewhere to stay on wotif.com, and you will get exactly the same results as if you had searched on expedia.com. What may be different is the layout of the website, the search mechanism, loyalty reward schemes, and the ways guests can get customer support.

Between the two major groups listed above, there may be price differences between individual accommodation properties. However, in general, they are limited to special offers or campaign sales. For example, we did a search for a one night stay at a specific hotel in the popular Melbourne inner northern suburb of Brunswick on several websites within these two major groups. For most room types, the tariffs were identical. But within the Expedia group, they were promoting a sale at the hotel of our choice on deluxe queen rooms, which resulted in the nightly pricing dropping from the standard $145 down to $108 on all the websites within that group.

Based on that, one could conclude that best way to get the lowest pricing when using online travel websites is to pick one from each of the two major groups and search those.

Another option is to use what is known as a meta search engine website. These gather pricing for accommodation through a large number of booking websites and present the combined results.

Meta hotel searchSome major meta search engines for hotel bookings are:

A few years ago, using meta search engines was really the way to go. That was because many of today’s popular online travel booking sites were actually independantly owned and managed, with their own arrangements between suppliers of accommodation. This meant there were many instances of wide variability in pricing and the presence of some hotels across those sites. But in the last few years, many popular online travel booking sites have been bought out by big groups, including Australia’s Wotif which was acquired by Expedia in late 2014. What exists now is basically a duopoly between the websites that are part of Priceline Group and those that Expedia Inc runs.

Is this the end for hotel meta search engines? Yes and no.

While Priceline and Expedia control many of the world’s most popular accommodation booking sites, there are a few smaller ones out there which are still independant and do offer unique deals, so using a hotel meta search engines can easily sniff these out for you.

Australian-based HotelsCombined is an interesting meta search engine. Like Trivago and Kayak, it searches websites belonging to the major online travel groups and combines the results. However, it also has arrangements in place with some hotel chains, like Best Western for example, such that it can get pricing directly from the hotel, rather than through the major online travel websites that the hotel has listed itself on. While this sounds good in practice, it may not actually mean you get a room cheaper when booking direct.  There is usually a rate parity arrangement in place which prohibits a hotel from advertising a cheaper rate on its own website than through the major online travel groups that it distributes room availability through.

The most popular online accommodation booking systems for your website

reservation
Book your stay online

There are an overwhelming number of online booking systems available for use by accommodation providers that allow guests to check availability and made a booking at any time, day or night. People are increasingly abandoning the process of phoning up to make bookings, and email bookings are also being shunned with the proliferation of instant online booking systems.

We have tallied up the 5 most popular third party (i.e. not in-house or group developed) online booking systems used by accommodation providers that are listed on the Travel Victoria website and these are the results:

  1. The Booking Button.  This is by far and away the most popular system, used by 25% of our clients that have an online booking facility.  It’s developed by SiteMinder, who have their headquarters right here in Australia, and their product is also used extensively by overseas accommodation providers. Minimum cost is $29 per month. We love the clean interface that The Booking Button provides to guests.
  2. RMS.  They’ve been in business for 25 years and, like The Booking Button, are from Australia and market their product overseas. Around 11% of our clients that provide online booking facilities use RMS. Minimum cost is $35 per month. However, we’ll go out on a limb here and say that the user interface for those booking accommodation using RMS is probably one of the most dated and cumbersome we have seen.
  3. ResOnline. Used by roughly the same number of our clients as RMS, the ResOnline group has had an interesting history with ownership changes and other dramas. Despite that, they offer a solid product priced from $39 per month.  It also provides free exposure for accommodation property owners into their associated RoamFree accommodation search website.
  4. FrontDesk. This is produced by V3 (pronounced as “V cubed”) – an organisation well-known for their venture with the ATDW (Australian Tourism Data Warehouse) in developing a national booking and distribution system for  tourism products called Tourism Exchange Australia (TXA). V3 provide FrontDesk to accommodation providers via a rather complicated fee schedule.  In general, there’s a $39 monthly fee (although for some providers, it may be free), plus there’s a transaction cost on successful bookings. Almost 10% of our clients that use online booking systems are using FrontDesk.
  5. Web Reservation Systems. 8% of our clients that have independently chosen to use an online booking system are with this group that are based in the idyllic holiday location of Byron Bay. Web Reservation Systems employ the easy to use Booking Center hospitality management software and are the preferred supplier for the Golden Chain motel group throughout Australia. They also create websites which are easy to maintain for businesses, so if you’re after both website development and an online booking system, they are your one stop shop.

Travellers are increasingly expecting to book their accommodation instantly online and will seek out those providers that offer that service. So if you don’t already provide an online booking system, what are you waiting for?

Use your website’s on-line booking facility to the max

booking online
Get the most out of your on-line booking system

More and more accommodation providers are adding instant on-line availability and booking facilities to their websites to ensure potential guests can quickly and easily find and book accommodation 24/7. The benefits to the provider and the consumer are numerous, some of which we’ve mentioned in our article why you need a real-time online booking system.

But are you getting the most out of your own on-line booking system?

A couple of months ago, one of our staff members booked a 5 night family holiday at the beachfront town of Cowes on Phillip Island for late November. The apartments they were looking at had an on-line booking system, so they expected using that would be the quickest way to make a reservation and get the best deal. Unfortunately, the apartment provider made their online booking system very unattractive by only offering apartments at the “rack rate”, which is basically the maximum price they’d ever charge without any discounts. In reality, you almost never pay anywhere near the “rack rate” unless it’s right in the middle of peak season or during some local event when accommodation is scarce. Whether you stay one night or 10 nights, the accommodation provider offered the same inflated nightly “rack rate” if you booked online with them.

Upon phoning the establishment directly, our staff member secured a deal for the 5 night stay that was 40% cheaper than booking on-line. Instead of paying the $275 per night online rack rate, they paid $165 per night.  Wow!

The lesson here is that if your on-line booking system is only accepting bookings at the inflated rack rate, then chances are you’re going to be missing many bookings.  Our staff member could have easily been put off by the exorbitant off-peak $275 per night rate shown in the online booking system and tried somewhere else, thus costing the establishment a profitable 5 night booking.

Some useful tips for accommodation providers with on-line booking facilities:

  1. Advertise your best rate within the on-line booking system on your website. You’ll only get one opportunity to secure a booking when someone visits your site as you’re not directly negotiating with them. So don’t scare them off with inflated prices.
  2. Ensure your on-line booking system has discounted packages for multiple-night stays. Most systems should be flexible enough to allow you to discount rates instantly when people enter in the length of their stay. People don’t expect that the nightly rate for a week will be charged at the same rate as just a one night stay.
  3. Don’t undercut your own website’s online rates on third party accommodation distributors like Wotif, HotelClub, etc.  If you can offer those rates to those websites, then you can surely offer them on your own website. In fact, you really want people to book directly on-line with you, to save you paying hefty commissions to those third party distributors anyway. Additionally, people often compare your rates on Wotif and others with your own website for the best deal, so save the commission payment and make your own booking system competitive.

Your on-line booking system is a valuable, time-saving tool, but it can also cost you bookings if used wrongly.

Why you need a real-time online booking system

Booking your holiday online
Guests want to book online, so let them or miss out!

You’ve just spent a few great days at Mallacoota and enjoyed the natural beauty of the beach and surrounding national park. You and the family are heading home tomorrow morning, but just before going to bed, you check out the latest weather forecast on the internet – sunny and 30 degrees for the next few days – perfect beach weather! Everyone agrees the holiday should be extended by spending a few nights at Lakes Entrance for some more great beach fun.

But the problem is that school holidays are on, so many places may be booked out. It’s too late in the night to telephone accommodation managers direct, so you head to the internet looking to secure a place to stay.

Searching for Lakes Entrance accommodation reveals some brand new holiday apartments just across the road from the beach and right in the town centre, which will be perfect for the family! Oh no, the only way to make an enquiry is to telephone or email them. There’s no availability calendar or online booking system. You could wait for the morning to phone them, but in the meantime others may get in before you and snap up the remaining apartments. And if you wait till the morning, other vacant accommodation at Lakes Entrance might be taken.

You keep looking and find some more holiday apartments. They are older style, situated one block back from the beach, and a fair walk to the town centre. However, they do have a real-time online booking system and they have one family unit remaining for the next two nights!

As you’re determined to stay in Lakes Entrance, you make the booking. It’s not where you would have wanted to ideally stay, but you can’t risk waiting until the morning to contact the manager of those apartments with no online booking system.

The question for managers of accommodation properties is how many bookings are you missing out on because people can’t instantly check availability or book online 24/7? How many people are instead staying at places that do offer the convenience of online bookings?

It’s not just last minute bookings which you may lose out on. Some people may have a list of places they want to stay in, but to spend time and money making long distance telephone calls, or being prepared to wait a day for email responses to be answered, would put them off booking with you unless they can check availability instantly and then reserve that room in the process.

In this increasingly busy, impulsive, unpredictable and digital age, more and more travellers are expecting to instantly reserve rooms, any time of day or night. Which is why you really need an online booking system.

The best online reservation systems are those which don’t charge you a fee for every booking made (i.e. commission-free bookings), making the booking directly between and you and the guest, and are fully under your control. Some which you may wish to consider that are administered in Australia are:

  1. Web Reservation Systems. Their system gives you total control over pricing, availability and conditions. The bookings are secure and guests can provide credit card details to you through this system. Implant the booking button on your website and on other sites you have your property listed with to allow customers check availability and/or book.
  2. The Booking Button. An intelligent and fully-featured online booking facility which you can use on your website or others you’re listed on. There’s no lock-in contracts, you pay monthly, and pricing varies depending on the number of rooms your establishment has.

If you don’t have an online booking system for your accommodation property, not only is it costing you guests, but also time. While guests organise their accommodation online instantly, you can attend to other tasks instead of being tied up on the phone or answering emails.

What are you waiting for?