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 $100 per night, they have immediately lost $25 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.....
In summary:
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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