Budget Motels – A note from the Chairman, Charlie Ikstrums

Budget Motel Chain Support Local Australian Motel Operators #HolidayHereThisYear

After years of drought, catastrophic bushfires in the last few months, the coronavirus outbreak, and now the possibility of widespread floods, the rural and regional tourism and accommodation industry has been knocked from pillar to post.

We are asking Australians to Book Direct with Budget Motels or with the Motel Operators.

DID YOU KNOW:
Regional Australia motel operators pay between 15% – 49% commission on the bookings you make with the OTAs (Online Travel Agents – Overseas Booking Platforms) such as Booking.con, Trivago etc.

Budget Motel Chain Support Australian Motels Say NO! to OTA Commissions #HolidayHereThisYear

The federal government has instigated the $76 million fire recovery package, and the Australian public, many Australian and international celebrities and corporations have responded magnificently, thus far raising in excess of $0.5 billion and growing.

Interestingly, the major players in the Australian accommodation industry, who have an overwhelming amount of control, were noticeably missing from this list.

Just yesterday, I received an email from one OTA (Online Travel Agent) suggesting that I reduce my prices by 20 percent to offset the potential loss of bookings due to the coronavirus. Thanks, but no thanks.

And from another which stated, ‘If you have to cancel a reservation due to a bushfire or any natural disaster, it will not affect your ranking and we will refund the service fee directly back to the customer.’ No thank you again. We will handle our own refunds.

So, we are asking you to please consider the positive impact you can make to regional Australia when you Book Direct with Budget Motel Chain or motel operators, and Say NO! to the overseas booking sites.

Thank you and please… Book Direct Australia!

Charlie Ikstrums

Chairman, Budget Motel Chain.

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Trivago Found Guilty

Trivago Found Guilty

ABC News 

Australia’s consumer watchdog says online hotel booking site Trivago is one of several online comparison websites that could face severe penalties after a court ruled the German-based giant had misled consumers about hotel room rates.

The company, based in Germany but incorporated in Netherlands, had regularly promoted that its website helped identify the cheapest rates for a hotel by comparing booking sites such as Expedia, Hotels.com and Booking.com, as well as the hotels’ own websites.

Trivago’s main source of revenue is cost-per-click payments from advertisers who pay Trivago a fee each time a user clicks on an offer.

Mr Sims said, rather than being an “impartial and objective” price comparison service, Trivago prioritised the advertisers willing to pay the highest cost-per-click fee.

He said Trivago’s conduct was “particularly egregious” as consumers may have been tricked into thinking they were getting great discounts, when in fact they were not.

“The rankings were largely based on which advertiser would pay them [Trivago] the most money,” Mr Sims told ABC News.

“Most of the time what was highlighted wasn’t the cheapest hotel deal, and therefore, consumers lost out.”

He said if consumers had known they were not getting the best deal, they could have “done more digging” such as calling the hotel or checking the hotel website to find deals that would save them money.

Penalties are yet to be handed down by the court, but could potentially be millions of dollars.

“We will certainly be seeking the highest penalties we can get to send a message to Trivago, and to send a message to others, not to mislead consumers,” Mr Sims said.

Trivago misled consumers more than 66 per cent of the time

Both the ACCC and Trivago called computer science experts to express opinions on the algorithm used by Trivago to select the ‘Top Position Offer’.

Trivago’s own data showed that in more than 66 per cent of listings, higher priced hotel offers were selected as the ‘Top Position Offer’ over alternative lower priced offers.

Justice Mark Moshinsky found that Trivago had “engaged in conduct that was misleading and deceptive or likely to mislead or deceive”, and therefore had broken the law.

The court also looked at Trivago’s use of strike-through prices.

It found hotel room rate comparisons that used strike-through prices, or text in different colours (for example green versus red), gave consumers a false impressions of savings.

“They weren’t comparing like with like, they were often comparing a luxury room price to a standard room price,” Mr Sims said.

“People [mistakenly] thought they were getting discounts when in fact they weren’t. It’s absolutely outrageous.”

The ACCC launched action against Trivago in August 2018.

Trivago’s television advertisements aired more than 400,000 times from December 2013, but in mid-2018 the company stopped using these ads featuring representations about price.

The court case centred around Trivago’s television advertisements that ran from December 2016 to July 2018, and on Trivago’s website from December 2016 to September 2019.

Other online comparison sites to come under fire

Mr Sims said his message to other online comparison websites was: “Do not mislead consumers.”

“If they’re making their money out of promoting the company that pays them the most money, consumers have got to know that,” Mr Sims said.

That may mean companies like Trivago will not get as many people clicking on their site.

“Well, so be it,” Mr Sims said.

“We’re really fed up with these comparison sites misleading consumers and consumers thinking they’re getting a better deal than they in fact are.”

Mr Sims said the ACCC had previously taken action against energy comparison websites and, following hotel booking sites, its focus would now extend to other industries.

“This is a widespread issue as people come to rely on sites to make their purchase choices,” Mr Sims said.

“We will focus our activity on websites that have a lot of use, that consumers rely on.  And we will take action when we think they are misleading.”

Mr Sims the ACCC would also be closely monitoring whether Trivago changes its behaviour to start informing consumers if their rankings are based on advertising money, and to highlight that the price they are seeing is not necessarily the best price.

“That may prompt consumers to ring up the hotel they’re thinking of going to,” he said.

“I know its old-fashioned technology, but you may find … it’s probably usually worth that phone call. Or visiting the hotel website itself if you don’t like making phone calls.”

A spokeswoman for Trivago said the company would closely review the ACCC’s decision.

“The judgment received yesterday from the court provides new guidance on how results of comparator websites, like Trivago and others, should be displayed in Australia,” she said.

“We are working to quickly understand the implications of this decision on our website design and its overall impact on the Australian travel industry.”

Source:  ABC NEWS – First posted  
 
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Booking.com Gauging Prices

Booking.con Gauging Prices

Booking.com held a workshop in Geelong, South West of Melbourne, where Account Managers Mandy Huynh (Western Victoria), Dean O’Leary (Eastern Victoria) and their Senior Account Manager Todd Lacey (Victoria and SA) took the attendees through what’s been happening and what’s coming up for Booking.com.

Some of the items which were discussed:

International Cricket Council:

The ICC has signed a 5 year sponsorship deal with Booking.com

Visit Victoria:

The Victorian Government’s ‘Visit Victoria’ webpage search engine is now powered by Booking.com.

Ad-ons:

In the same way that Expedia does, Booking.com now offers ‘ad-ons’, where guests can book tours, restaurants, etc. all on their page.

Daily Worldwide Bookings:

On average Booking.com handles 1.6M booking in any given 24 hour period

 Mobile First Selling:

53% of their customers now use the App compared to 47% using their website

80% of travellers use a smartphone app to research a trip

59% of Booking.com reservations come from a mobile device

The reason they were giving information about mobile bookings and research is that they now offer;

Mobile Rates:

So, what is a Mobile Rate?

Booking.com will be suggesting that property owners offer a discount to guests who book via a mobile device, lower than what is available on their normal website.  Properties who ‘opt-in’ and supply a discounted rate for mobile device bookers will have their properties listed higher on their search rankings than those who don’t.

The attendees were not impressed with this new way for Booking.com to force properties to discount their rates, and it didn’t go down well during the workshop.

Business Rates

Booking.com will be advertising to past guests who have advised that they are travelling for ‘business’ in an attempt to gain further bookings directly from businesses, thus trying to undercut specialised Corporate Rates properties already have in place.

There were some conditions;

1.  Rates are for “Genius Business Guests Only”.

2.  The MINIMUM discount offer that property owners can supply must be at least 15%.

3.  Guests can book weekdays only

The implications of this were that a “Genius Business Guest” already gets a minimum of 5% discount, plus the new (minimum) 15% discount equalling at least a 20% discount on your rate.

I asked if Booking.com was going to reduce the commission on any of these bookings as (at least) 20% on top of the (at least) 15% commission meant that for a $100.00 value room, the property owner would only be getting, at a maximum $65.00, less if they have opted in for other features.

They advised that as this is a voluntary ‘opt-in’, Booking.com would not be reducing their commission to anyone.

Minimum Stays:

It’s no surprise that Booking.com doesn’t like ‘minimum stays’ as these are potential ‘blockers’ for guests who don’t wish to stay for more than one night.

So, Booking.com is now suggesting that property owners stop minimum stays and instead double the price of the room for the night…  Their argument, the property owner would still be getting the same amount, and if they are able to sell the room twice for double the amount, it’s a win for the property, not to mention them.  The difference is they don’t have to deal with the potential arguments from guests who would be paying double what they normally would for a single night.

The three Account Managers hosting the workshop couldn’t understand why the attendees got upset by this as it (in their eyes) meant more income for the property.  (their argument).

Virtual Credit Cards (VCC):

One item they did try to push was their VCC.

When one of the attendees asked why they were charged an extra 3.1% fee on top of their normal Merchant Fee, the Booking.com hosts tried to tell them that their banks did this to all VCCs…

I then informed them that this is not true, and banks don’t mind what type of credit card is used, and they don’t charge extra for using a VCC.  The hosts continued to disagree with me until I informed everyone there that the reason a property gets charged the additional fee is because of what’s called; ‘Cross Border Transaction Fees’, and that just like everything that Booking.com do, it is all overseas and not in Australia, so you have to pay extra to your bank to have Booking.com’s VCCs.

Taxes:

The Senior Account Manager, Todd Lacey, then got up and was talking about how Booking.com pay all taxes due in Australia…  This understandably didn’t go down well with the attendees.

I queried if paying $2.76M in taxes in 2018-19 sounded like a fair amount of tax payable, when compared to the income received in Australia for the same period.

A few of the attendees left during this subject, leaving their departing thoughts with the hosts.

Pulse App:

This app looked quite interesting as you could manage your Booking.com account all from one app on your smart device.

The hosts suggested that people download it and have a play to understand what was involved with it.

The Partner Forum:

Similar to our closed Facebook page, Booking.com now have a Forum page where registered property owners can ask questions of other property owners.  They did mention that this is moderated by Booking.com staff and any user not following their rules and guidelines would be barred.

All in all it was a very interesting workshop, but from my impressions, the attendees didn’t seem to appreciate Booking.com’s blatant grab for more commission on yet more bookings.

If you would like more information about any of these topics, please contact;

Todd Lacey
Senior Account Manager, Vic & SA
todd.lacey@booking.com
0422 564 790

Mandy Huynh
Account Manager, Western Vic
mandy.huynh@booking.com
0401 196 092

Dean O’Leary
Account Manager, Eastern Vic
dean.oleary@booking.com
0423 519 549

 

Or myself

Chris Fozard
Operations Manager
Budget Motel Chain
manager@budgetmotels.com.au
(03) 9784 4111

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