We are used to Booking-dot-com’s inventory appearing re-distributed in endless places and the surprising thing is when we come across the opposite finding which, up until now, has gone unnoticed in the industry media: rooms on Booking.com provided by third parties.
This is called Booking.basic and we do not currently know its current scope.
For now, we have come across it intermittently in accommodations in Asia, provided by Agoda or CTrip. With this novelty, Booking.com has crossed a threshold with potentially enormous consequences.
In all cases, what we have found is a non-refundable prepaid rate at a lower price than the one offered directly by Booking.com.
Since March, Booking.com refers to it in its Privacy Policy, which therefore recognises this novelty and makes it official:
Booking.basic: You may be able to make a Booking.basic reservation. Booking.basic reservations are facilitated by third party business partners. During the reservation process, we are required to share some relevant personal information for that reservation with the third party business partner. Please review the information provided in the book process or the reservation confirmation for more information about the third party business partner and how they further process your personal data.
We made a few bookings to check how it works. You book it on Booking.com and it does not allow changes, requests or comments, it has limited customer service and confirmation is not immediate. A subsequent email from Booking.com confirms our booking for definite, and informs us of the partner supplier, in this case CTrip:
The confirmation email also indicates that, for the hotel, the booking has to be identified as made by CTrip, not Booking.com.
CTrip, on its website, offers the accommodation from our booking for the same price of 57€ we saw on Booking.basic:
Without making a booking, anyone can see which wholesaler is behind a Booking.basic rate. All you have to do is open the source code from the booking’s page and search for ‘wholesaler_id’. In our case, we see ‘ct’ under ‘wholesaler_id’.
For another hotel, we can see Agoda is the partner supplier:
The source code on Booking.com indeed states ‘ag’.
Mirai’s opinion: What would happen if Booking.com offered third-party wholesale rates en masse?
It is nothing new that inventories are re-distributed and re-sold on different levels by successive links. Many OTAs supply themselves with third-party inventory sources. It is not surprising nor should it be a shock that Booking.com also resorts to others to improve their competitiveness where it does not have the best price. However, this piece of news leaves us with many questions, which we have raised here:
- The main question: is it a limited test or does Booking.com have the intention to extend it to accommodation from other countries?
- Which third-party wholesalers will take part? Agoda is a brand from Booking Holdings and CTrip is related too, therefore the collaboration seems normal. Will we see Expedia supplying rooms to Booking.com?
- Booking.com is the top OTA in Europe. It has the client in its possession. However, it does not always offer the best price, as anyone can easily check on metasearch engines. What would be the impact if the main OTA, already having the client, definitively guaranteed the best price with Booking.basic?
- If metasearch engines manage bookings and OTAs like Booking.com provide the best prices from third parties, is the boundary between them disappearing?
- What about price disparities? Up until now, Booking.com has shown to be exemplary by respecting the hotel price. The fact that its model is based on the client paying directly at the hotel prevents any price violation. Booking.basic should not shock or surprise whilst it deals with legitimate rates which comply with the conditions or restrictions signed with the hotel. We understand that Booking.com makes this verification with the same professionalism that it respects hotel prices with. However, is Booking.com aware of the restrictions which usually go with discounted rates and does it verify this compliance with Booking.basic? Otherwise, it would be co-responsible for the price disparities which anger hotels so much.
- Are the accommodations on Booking.basic notified of their participation? Do CTrip, Agoda, etc. know that the bookings were made on Booking.basic? Does the Booking.com extranet or its communication channel with the hotel include Booking.basic results? Can a hotel refuse to participate?
In any case, any hotelier which sees his hotel on Booking.basic should be worried. There are two possibilities as to why his hotel is there, both negative:
- Either his discounted rates are being re-distributed with conditions which are being breached (de-packaged without authorisation, do not comply with minimum markups if they are net, shown in markets which they were not directed to, etc.).
- The hotel/chain has signed distribution contracts with no sense or control and therefore two potential clients are being shown different prices for the same conditions.
Whether it is one reason or the other, something is going wrong. If it is a test carried out in Indonesian hotels, then it may end up as a curious anecdote. However, if Booking.basic one day arrives at your hotel thanks to the largest OTA there is, you have a serious problem on your hands.
Mirai is the hotelier’s partner in the common objective of maximising the potential of direct sales, commercial independence, reduction of distribution costs and access without intermediaries to the highest number of potential clients, always within the general framework that these actions contribute to increase the hotel’s profits.
We cover the three necessary areas required to reach this objective: Creation and maintenance of the hotel’s direct-sales platform (website, mobile device, booking systems, etc.) with the best technology, design and service; Visibility and marketing to make that platform reach the client and, above all, collaboration with the hotelier in the development and implementation of the sales and commercialisation strategy, actions which are down to the hotel but essential to achieve the desired results.
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