There has been quite a lot of debate lately regarding the new offering by Booking.com – BookingSuite. The Priceline Group acquired Buuteeq, a digital marketing and website “cloud-based system” for independent hotels, for according to several reports around $98 million.
Booking.com recently announced that they would no longer operate Buuteeq as an independent brand, and that they now offer free websites in exchange for a 10% commission on every Euro generated on those sites.
Bye Bye Buuteeq.
The first thing I observed is how quickly Booking.com moved away from letting Buuteeq “continue to operate as an independent business within The Priceline Group.” As I was working for a hotel at the time that was using the Buuteeq technology I was highly skeptical about them being allowed to operate independently even though I was receiving emails from the founders that “nothing is going to change”.
Here is an excerpt from an email that Buuteeq sent to me at the time:
“We remain an independent brand (one of the prime reasons we considered the merger with Priceline Group) and we continue to run business as usual. That said, I am thrilled to be able to rub shoulders with other brands in the group; we’re already getting great advice on how to improve conversion for hoteliers (who wouldn’t want to get best practices from the likes of Priceline, Kayak, and Booking)!”
Great news I thought, but as we all know by now that nobody acquires a small company to make things better for their existing clients. They buy assets to benefit the larger group, which in this case is Priceline. The interests of thousands of small and independent hotels is not the primary objective of the group. Their own revenue is as you would expect it to be.
The hotels who built their entire online presence on the Buuteeq platform – instead of owning their own digital assets – now have even less control over what happens to their own website and marketing. Priceline will tweak, update and change the new entity as they deem fit.
You must keep in mind that Buuteeq was acquired because it was working. It was built by smart people: former Microsoft executives Forest Key, Adam Brownstein and Brian Saab. They raised the capital, built the platform, and implemented aggresive sales teams that closed thousands of hotels and inns. They even convinced established hotel brands like Choice Hotels to join them. They flourished by playing on one of the lodging industry’s major deficiencies: the fact that people in hospitality do not want to spend time or money on direct marketing/ building a website/ getting a decent booking engine.
Over the last few months, we have been seeing the BookingSuite link taking the place of “Hotel Marketing by Buuteeq” on independent websites. How did we know that the Buuteeq brand would be “sunsetted” by Priceline? Because there is so much more money to be made by taking a % of bookings versus peddling “digital marketing platforms” for a flat monthly fee. Where is the fun revenue in that?
You see, if a hotel on the Buuteeq platform decided to spend money directly on Google via PPC (which is their greatest marketing tool!), the hotel itself would profit from PPC success. This of course, is not what Buuteeq/Booking Suite would like to see. They would prefer to cash in on any marketing success you experience..
Using the services of Booking Suite in return for a commission for direct to property bookings, approximately 10 per cent. The rates are populated from your Booking.com inventory and should mirror their site. What they fail to mention are the potential drawbacks to your business of which there are many. Currently your property benefits from what we call “the bounce”. A majority of consumers looking at your property on an OTA site will eventually find their way over to your website to review what deals you may have for direct bookings. Booking Suite will be powered by whatever you display on Booking.com, so the opportunity to vary your prices or room stock has now been taken away from you.
In addition you are now restricted from displaying on the new meta sites, which seem to be the possible future of online search. Should you list on the meta site direct and happen to attract a direct booking, you will pay two lots of fees; one to the meta site and one to Booking Suite, which is simply cost prohibitive. It may be there will be a clause in your contract that you cannot participate in these sites at all; this is still unclear as we’re not privy to the contracts at this point in time. The consumers may become deterred from searching properties direct across the entire industry should they constantly find an OTA when they end up on a direct site.
We may be inadvertently educating the traveller not to bother leaving an OTA site at all, which in turn erodes your capacity to capture direct unique bookings, a huge value to your business.
In addition how will the other OTAs feel if they learn you have elected to “partner” with Booking.com in this manner, under the guise of Booking Suite? Will they choose not to promote you as well as they may have in the past as they know only too well the impact of the bounce on their own marketing spend.
So in conclusion
“It’s a trap.”
Yes, free websites are a trap indeed. The old adage “there is no such thing as a free lunch” needs to be revisited by anyone in the this business who is considering getting a “free” website. Yes, BookingSuite is a “free” website, but it comes with a very big price. The price is 10% of every single reservation you receive on your website.
I am not against paying an OTA (Online Travel Agent) a commission for revenue they deliver to my hotel, when they incurred the marketing cost of bringing that guest to me. I don’t even mind them converting a guest who is hooked on their brand. The thing to consider here is that, when using BookingSuite, you are going to share 10% of every euro booked on the website, even the revenue that you made because of your own:
reputation & press
word of mouth
Here is a wonderful thought. Instead of paying a flat 10% commission to BookingSuite, spend it here instead:
Spend directly with Google. Buy something as simple and effective as your brand name keyword searches.
Pay a photographer. Photos make or break a website. Better photos = better revenue (update them on all your channels!).
Put more/better content on your website. Convert visitors on your website by giving them better information about your location/destination.
Do some testing. Try out social and meta advertising platforms with minimum budgets and see what works best for you.
Hotelient can help you with creating for your independent Hotel or Resort a digital marketing strategy that works and can demonstrate increases for your RevPar. email us firstname.lastname@example.org for further info our request our free no obligation case study of your current online presence.