Why book direct with the person who operates the business?
What happens when I make a booking other than directly with the accommodation operator?
How to save money!
You may wonder why you rarely see cottages listed in those glossy brochures that all the travel agents have on show, they mostly seem full of international grade hotels charging $175 per night per person? It comes down to cost. The majority of organisations that control those brochures charge 20% to 25% commission on all bookings plus charge for the advertising.
If the accommodation operator's phone number or email address does not appear in their ad, but instead there is a "central contact number" or the same email address appears in all ads, then you are not dealing with the person who runs the accommodation business.
Thus, if a cottage charges $120 per night, they have immediately lost $30 of that every night of the booking. A fast way to go broke!
A certain organisation very conveniently sent us a fact sheet, here are some exerts from it -
"Usually commissions fall within the following ranges:
Source of sale Commission
Retail Travel Agent etc 10 - 15% (ie. those dealing directly with the public.)
Wholesaler 20 - 25%
Inbound Operator 30 - 35%"
FAQ "If I pay commissions how am I expected to make money?"
Answer: ".......... It is important that you factor commissions into the pricing of your product."
Which is a nice bland way of saying "increase your prices so that we can have our cut without you going broke".
What we had never heard of before is something called an "Override", basically it is an additional commission between 1% and 5% that is charged, here is the quote from the fact sheet:
Answer: "overrides are either paid to 'buy' business or to ensure you retain the business you already have."
Hmmmm, would that be something along the lines of 'paying for favourable comment' as happens with certain radio announcers?
The wording of that exert has some interesting overtones.....
The plague of the 21st Century - Internet Booking Services
It is incredible how many of these have appeared in the last few years. It seems every man and his dog has bought a computer, become a credit card merchant and decided to go into business as an Internet Booking Service. In order that they don't get lost in the crowd they then pay the internet search engines to "find" their websites! They make their money by charging a commission to the accommodation operator.
Many require the operator to update their availability calendar daily - the result being most accommodation operators ignore them altogether as who has the time to spend updating hundreds of different booking services?
There is a behind the scenes battle going on as all these services try and overwhelm their competitors and get a higher placing on the 1st page of any web search. All the while they are wanting the public to believe that they are offering a "free" service.
Out of date information
We recently had a phone call from a man who thought he had made an internet booking through one of the 3rd party internet booking services for accommodation with one of our competitors. For some reason he decided he wasn't comfortable and had baulked at the point where he had to provide his credit card number.
He had then attempted to phone the operator of the accommodation and kept getting a "number not connected" message from Telstra. He then found our number and rang us. It turns out he had been trying to make a booking with an operator who went out of business 14 months ago! But the 3rd party booking provider had been showing a vacancy and was quite happy to accept his booking!
This was for a very busy weekend and there would have been one very unhappy tourist when he found that not only did he not have any accommodation, but little hope of getting any, he would have been out of pocket as well and on his return home would then have to try and get his money back.
Not most people's idea of a holiday.....
Every so often we receive an email from one of several online booking sites saying they have a customer ready to book accommodation.
Following the link they provide takes us to a payment portal which requires us to pay between $15 and $25 to reveal the customer's email address.
You will not be surprised to find out that accommodation operator's ignore those emails. Who is going to pay that sort of money only to receive the usual "5 newly ordained Greek Priest" scam or similar?
The latest weird phone call was from an obviously American female wanting to book a cottage for one night. It was all going well until she queried whether or not they could use our tennis court. When I stated we don't have a tennis court she informed me that we shouldn't include things in our ad that we don't have.
"What ad?" I asked.
It became clear from her responses that she thought she was talking to a different holiday cottage operator, once she told me the name I was able to assure her that the other operator most certainly did NOT have a tennis court either.
After more quizzing it turned out she was attempting to book a cottage in Mildura (3 hours south of us), whose details had been combined with ours AND another cottage in Broken Hill and all presented as if located in Mildura!
Luckily she had used the telephone to verify the details and saved herself a lot of grief.
Book online at your own peril.
The above was written back in 2006, time has moved on and now the internet booking services war is pretty well over with 3 victors. The market is now dominated by these 3 major companies who through lots of sub-companies effectively control the market. Update, one of them bought one of the others out, so now it is 2 majors. True there are always independants, but the 2 majors take the lions' share of the enquiries.
In discussion with other accommodation operators it is a common theme that internet bookings are increasing with the use of mobile phones and such is the amount of money having to be paid to these services that many operators are struggling to finance anything else.
As of updating this page, the latest tactic some are using is "cookies" they place on your computer. These cookies then report back to the sites your search terms. The sites then can see what you are chiefly interested in and if you go back to one search location or term more than once the results are then tailored, which means the prices of what you are shown are increased (one way is to remove availability of the cheaper options).
See the screen capture below for the details. They use the terminology "OTA" = Online Travel Agent.
The ABC "Checkout" programme has also done a somewhat tasteless feature on this subject, one that you will not forget in a hurry. The Checkout - click on image or this wording to view.
We had a lady phone us at 4.45pm one day after arriving at an accommodation competitor's place she had booked via an OTA, she was one of a group of 4 females who deemed the accommodation not suitable. They had had no contact with the operator, just with an online OTA.
After being told that we were booked out, they wanted us to act for them: despite the fact none of what had happened was anything to do with us.
1) The OTA had responded that the problem was nothing to do with them as they were "only a booking agency, you should contact the operator".
2) We were booked out so had nothing to offer as they were now looking for 2 cottages.
3) As the booking was a multi-week one, involved a large sum of money = $ hundreds in commission for the OTA and could quite easily end up in a legal fight it would be foolish for us to become involved. In short, it was none of our business. 4) If instead of booking with the OTA she had rang the operator and discussed
their needs and made the booking direct all of this could have probably been avoided.
Dick Smith has become aware of what has been going on and has done a video about it. In the first 2 weeks it made 2.5 million viewings.
Dick Smith - click on image or this wording to view.
Dick Smith - click on image or this wording to view.
We fail to see why the middlemen should get a cut of our income, nor do we see why we
should have to charge our customers more in order to make up for the commission we have to pay.
Why should accommodation be the milking cow of the 21st century?
Ultimately, you as the customer determine how much you are willing to pay and to whom. But why would you want to pay extra for someone to send one email or make one phone call on your behalf when you could do it yourself?
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