By Hâfi Martinsdóttir
Estimated reading time: 5 minutes | 938 words
Whether you own or run a guesthouse, boutique hotel or small, independent resort, chances are you also advertise your property on an online travel agency website, such as Airbnb, Booking.com, Vrbo, etc. in exchange for a fee. But thanks to the recent backlash that many of these businesses are facing over their handling, or mis-handling, of the coronavirus crisis, its no surprise that hosts are considering other options.
On a recent webinar with Rafat Ali, Founder of Skift and his Executive Editor Dennis Schaal, they discussed the future of these online travel agencies and the impact their decisions have had on their hosts, guests and reputation.
“Airbnb are going to be okay, the players that aren’t going to be okay are a lot of the hosts, the mom and pop hosts. Airbnb did something controversial and really pro-consumer in that they decided to just refund all guest fees in full, in cash.” When asked whether this was done in collaboration with the hosts, he replied with a shake of his head, “this was dropped on the hosts and many of them are outraged”.
And rightly so. The whole world is watching right now. We are all watching how companies are treating their staff, clients and communities. It seems that the biggest question that each of these companies are trying to answer is, who is most likely to have long-term memory? Airbnb clearly decided that their consumers would be most likely to remember how they were treated and instead opted to be disloyal to their hosts. You also have companies like Expedia’s Vrbo where they are urging hosts to refund 50% of the booking, however this is not mandatory.
“Or do you take the balanced approach? Angering consumers and trying to mollify your suppliers? It’s no doubt a difficult decision. The vacation rental owners are saying that Vrbo is being human and taking a balanced approach and the consumers are yelling and screaming when their money isn’t being refunded”, said Dennis. “There’s a backlash against Airbnb by the hosts, look on social media they are outraged because they have homes and mortgages to pay.”
When it comes to Airbnb, they are now pushing their OpenHomes program where they are asking hosts to house medical workers entirely free of charge. There have been mixed reports that they are also expecting hosts to service the rooms according to CDC guidelines at a cost to the hosts alone alongside reports stating that Airbnb will provide €50 for cleaning costs.
Again, this move has been considered controversial as it makes Airbnb out to be the good guys, whereas actually it’s mostly the hosts who are bearing the brunt. And you would rightly ask why is this the case when, according to Dennis, “Airbnb have raised $4.4 billion dollars and the latest report I saw said they have $2 – 3 billion dollars of cash on hand and they’re going out fundraising.”
So if this makes their hosts feel as though they have been left out in the cold and fending for themselves, it would seem that it’s because they have. But how might these recent backlashes affect the ongoing and future relationships between hosts and the online travel agencies?
In the last seven to eight years there has been a war between the online travel agencies, for whom the hotel industry is a large revenue source, and the hotels who have pushed for their own booking system and encouraged guests to book directly via their own website. Rafat says “there are companies like Hilton and Marriott and others who have focused on ‘come to us directly’, ‘book through our sites or apps’ etc so that they don’t have to pay a fee to Expedia”.
However, many hotels are also working with online agencies in cooperation, as opposed to the hotel/online travel agency wars of the early 2000s. Marriott has made technology deals with Expedia and it has grown into a much different relationship now, more symbiotic.
Considering the controversial decisions made by the prominent travel agencies and their repercussions, what comes next?
Dennis explains, “I have to believe that when the dust settles, when a recovery starts, that you’re going to be seeing hotels around the world leaning into online travel agencies because it’s all about putting heads in beds. Direct booking, that’s for another day.”
So, it would seem that during this time, all rule books and egos are out the window. Although many hosts are hurting, now is not the time to abandon our agencies.
Our advice would be, continue to advertise your property with your chosen agency until you get back on your feet. But when the time is right, start encouraging guests to book via your own site. You can do this by offering the cheapest rates if they book direct, certain promotions, extra value add-ons and entry into your guest loyalty program. This will also enable you to own the guest relationship entirely, whereas right now we pay the agencies to access our potential guests.
If there is anything that we have learnt from watching how companies like Airbnb and Vrbo do their business, it’s that we shouldn’t place all of our eggs into one basket. By cooperating with the online travel agencies, we can spread our brand awareness further while also prioritising our own booking systems on our website to ensure that they no longer have a monopoly over us, but at the same time, can still bring in revenue.
Taking back control might take some time but it’ll make for fewer nasty surprises down the road if an agency makes an abrupt and harsh decision that affects you directly and leaves you reeling as many hosts around the world currently are.
Unsure of your next step? Get clear on your hotel’s recovery strategy
As COVID-19 is unlikely to disappear completely without an effective vaccine, it’s expected that we will have a W shaped recovery with lock downs repeatedly being enforced, relaxed and enforced again over time. Being prepared for this tumultuous recovery will stand you and your hotel in good stead to ride the waves to come.
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Magpie Creative Co. is a digital marketing and design consultancy with a worldwide client base. We provide branding, web design and online marketing for businesses that offer luxury guest experiences and require an efficient online booking system.
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