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The masked manager   By The Masked Manager

The Masked Manager | ARE YOU TRAPPED IN THE SPIDERS WEB?

ARE YOU TRAPPED IN THE SPIDERS WEB?

These last few weeks has shown the moves to increasingly monetise the rental world. The doors have almost shut as Best Match is introduced on HomeAway sites and guests are led down more disturbing booking paths.

From reading this week’s newsletters and forums it’s clear that wherever you have your home, how many great reviews or celebrities have stayed there, unless the service fee can be charged, we are all dead in the water relying on the big listing sites or at least much poorer and working harder.

It wasn’t long ago that we all got “Sharpled” and he got rich(er), all the promises of never charging the guest dematerialised with his pay offs. Airbnb have their own set of problems, but never made any promises or turned over a loyal customer base.

The attitude seems to be if this is the game to be played out, why not spread it around and let the guest foot the bill and work on them later to explain the errors of their ways and in so doing damage the OTA’s reputations.

These clever assurances, the security messages, the ease of booking, all fade into insignificance if a guest really knows the terms of their bookings. It’s easier to do it after a booking than before however. Hotels have become increasingly frustrated and figured that out with marketing and loyalty schemes with added benefits is now the way to go.

Check out this Skift report: https://skift.com/2016/02/26/hiltons-new-ad-campaign-and-push-for-more-direct-booking/

IHG recommends it: https://www.ihg.com/hotels/gb/en/global/offers/hotel/bookdirect

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WHAT NEXT?

It all hinges on the guest marketing. None of us individually have the power to out-market these behemoths because they trapped thousands of loyal customers (who used to be owners) long ago in the web of exposure and in some cases, deceitful promises and clever marketing. Plus they have pots and pots of money!

So we are expecting a few more things to happen:

NO MORE SUBSCRIPTIONS

Any site that wants serious transactional income can’t play the subscription game for too long. This is simply because of “leakage” and side-stepping. There is still an enquiry button and the opportunity to push offsite bookings via use of phones and emails. They have relied on this income but have been very clever introducing this booking combination, but it cannot last.

Best Match sorts this out by making payment of a Service Fee the MOST important factor. Way above where a home actually is!

For years HomeAway have been preaching “Guests want to book online”. Apparently it only applies to their websites! Of course you can now give up using your own sites, your own credit cards services, your booking management systems, other advertising sites, emails and social media.

The whole world wants to head to HomeAway, it’s clearly obvious! Why do we bother?

Too much sarcasm perhaps but in reality you need to focus even more on these aspects.

POORER CASH FLOW

Let’s face it, there are only three ways they can make money in this model: from the guest, from the owner and from sales of other products. The two biggest psychological drivers are fear and trust, which they all prey on with guests, leading them to the sales funnel.

To get all these revenue streams, they need to handle the whole transaction and keep the money, unless you have integrated merchant accounts from a channel or a PMS in which case expect a Booking.com invoice system. To sell and possibly use dynamic packaging they absolutely have to be in knowledge of the booking and for travel bundling, in control of the booking finance. Remember Expedia owns them!

Faster payments for higher fees are also possible, but with so many bookings 6+ months out, managers cannot adopt these principles and survive and therefore dynamic packaging is probably the most distant objective, even if Expedia is the parent company.

NEW PAYMENT SYSTEMS COMING

Don’t forget that many people still pay by bank transfer in this industry, how annoying is that to these companies. How do you cream off some of that? It’s either invoice like booking.com (more work) or build it in to the process.

Expect to see some financial modelling to allow this to happen “securely” with these trustworthy companies and under full control and increased fees. No doubt there will be some exchange rate gains too.

LESS CONTROL IS INEVITABLE ON THESE SITES

Now consider why there has been a slow transition to transaction. They need compliant inventory, and we are back to spiders and webs. What happens to a fly when it’s trapped, who rushes out to impale the poor winged insect after being drawn into the beautiful symmetry. Yes is scientifically proven webs are designed to appeal to certain insects.

The more inventory that is aligned (and I know the amount of hours put in to comply has been huge and continues to be so), the more your business becomes controllable and your dependency increases. Feeling trapped and threatened? You should be. The spider is closer than you think and it’s impossible to get away once you are wrapped and packaged. For anybody wanting to see a visual analogy try this:

By now I hope you, like us, will all be looking elsewhere and increasing your spread of marketing and advertising. Even this now poses problems in the hierarchy of your business. You get a request to book from one guest and another from another source, perhaps your own website. Who gets precedent, your guest or the one from an OTA?

If you cancel the OTA booking request, then guess what, you are out of favour with the 900lb Gorilla. You get de-ranked and re-positioned. You cannot double date!

GUESTS ARE THE PROBLEM

Lots of people have suggested competing sites and alternative models, but what we all need to do is educate the consumer with smart marketing! Just like these big companies do!

This is a simpler method of education, it does not compete head on for search positions, is more viral & newsworthy & guess what; we all have the guest’s details (eventually).

Let’s use these bookings and contacts from listing sites and educate them with the same message, pre-packaged.

The Masked Manager

The gloves are coming off each month so drop by to hear what the masked manager has to say.

The Masked Manager | ARE YOU TRAPPED IN THE SPIDERS WEB?

Are you advertising on Airbnb, Homeaway or Flipkey? What are your thoughts on on this subject?

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