Mastering Booking.com

Jasper: Being just on Airbnb is really not a viable option anymore, I think. Airbnb is removing and suspending listings pretty quickly. Because technically, if you get a couple four-star reviews, your listing might be suspended. So Booking.com doesn't force their guests to choose between essentially perfect and remove this listing. So I think that's a big pro for Booking.com.
But at the same time, if you don't really educate yourself on how all this stuff works, then you could list on Booking.com and really not get the most out of it, right?

Welcome to Get Paid For Your Pad

Jasper: Get Paid For Your Pad. Welcome back to an episode of Get Paid For Your Pad. In this episode, I want to talk about Booking.com. So Booking.com has become a pretty important channel. It's a channel that not all operators are using yet.
And the reason for that, I think, is because it used to be pretty complicated to get on Booking.com. It's not an easy process like on Airbnb, where you can sign up and create a listing within a couple hours. You could be live.
Booking.com was originally a hotel booking platform. And so they were originally more like a B2B platform, right? Where hotel companies list their hotels. And the process to be listed on Booking.com is a little bit more complicated, I think, as a result, right?

The Platform Is Getting Easier to Use

Jasper: So they did make it a lot easier recently. Because in recent years, Booking.com really started focusing more on individual hosts and especially like short-term rental inventory. And so they have made progress making it a little bit easier. But it's still a little bit complicated to sign up for Booking.com.
And not only is the onboarding process a little bit more complicated, managing Booking.com as a channel is also a little bit more difficult. But they've made it a little bit easier.

Booking.com Market Position and Growth

Jasper: So I pulled up some general stats about Booking.com just to give everybody a little bit of an idea of like, what's this channel about and what's going on on that channel, right?
So first of all, like I mentioned, they've really been focusing on like short-term rental inventory. I think they have about the same amount of inventory now as Airbnb, or maybe even more. They are the biggest OTA in the world. I think they have 29 million listings in total. That includes all the hotels.
But it's definitely an OTA that I think at this point is, you know, almost mandatory almost to list there, unless you're in a region where there's just no traffic. But especially in the larger cities, there tends to be pretty good demand on Booking.com.
More and more Booking.com users are learning that you can also book short-term rentals on the platform outside of hotels. Typically, it's because it was founded in Europe, actually in the Netherlands. It typically gets you get a very international crowd that goes on Booking.com. So that's also something to keep in mind.

Alternative Accommodations Are Growing Fast

Jasper: But I have some, pulled up some stats here. Alternative accommodations now make up 33% of all room nights on Booking.com. So that made a pretty big shift from just hotels to alternative accommodation as well. And that segment in Q4 2024 grew by 19% year in year.
So that just shows that, you know, that it's a platform that's growing when it comes to alternative accommodations and short-term rental accommodations.

The Merchant Payment Model Solved a Major Problem

Jasper: One reason why a lot of operators were not using Booking.com is because they didn't have, you'd have to process your own payments, but they introduced a merchant model. I think it was a couple of years ago. And now 59% of bookings are actually processed on Booking.com, where Booking.com collects the payments and pays the host later.
That was a big bottleneck. Because I remember when you had to take payment by yourself, Booking.com was notorious for chargebacks. So people would book, you would collect the payment, and then they would do, the guests would do a chargeback on the credit card, and you lose all the money.
So that's how that problem has been solved. You can just, you know, have Booking.com collect payments just like Airbnb does.

Why Airbnb's Review System Is Now a Major Risk

Jasper: Another reason why I think Booking.com is a really good channel to expand to right now is, I'm sure you've noticed that on Airbnb, if you get a bad rating, if you get a one-star review, it really hurts the performance of the listing. And that's definitely changed over the last year or so.
You know, it's always been negative. You know, if you get like a one-star review, if you have a low rating. But, you know, nowadays it's gotten to the point where being just on Airbnb is really not a viable option anymore, I think.
It used to be the case that you could still get away with just being on Airbnb and just really dominating the channel. But I think at this point it's become, I mean, it's always been a little bit risky, of course, but now it's even become a lot more risky because Airbnb is removing and suspending listings pretty quickly now.
And sometimes, you know, you get, obviously as a host, you're trying to do your best to get five-star reviews and, you know, create the best experience for your guests. But yeah, sometimes things can happen and it's not always your fault as a host, right? But yeah, that review can really crush the performance on your listing.

The Binary Review System Problem

Jasper: And it also has to do with the binary Airbnb review system where essentially a five is perfect and a four or less is basically bad. Because technically, if you get a couple four-star reviews, your listing might be suspended, you know?
It doesn't take that much for your listing to be suspended or show up as like a bottom 10% listing. So Airbnb is really punishing hosts for getting non-five-star reviews.
But the challenge is, because it's binary, your Airbnb forces the guests to choose between perfect and bad. And so, yeah, a lot of people are in the mindset that if it wasn't perfect, they don't want to give a five-star review. There was a small issue, but they, and so they give a four-star review, but that's essentially bad. And it's a lot of guests that are not aware of that, right?
So we always recommend, if you aren't doing this yet, it's like really educating your guests on the fact that this system, it's a binary system, right? So four-star is actually really bad.

Booking.com's Superior Rating System

Jasper: So with that said, you know, if you look at Booking.com, they have a rating system for one to 10. And so a 10 is perfect. But if there's, if it's almost perfect, but there was like, you know, a small, tiny little issue or something, you can give a nine or an eight and that's still a good rate, right?
So Booking.com doesn't force their guests to choose between essentially perfect and remove this listing. So I think that's a big pro for Booking.com. You're not going to be as, your revenue is not going to be as sensitive to the review scores.
You know, if you have a rating of anywhere between like seven and 10, I mean, it's very rare for properties that you have a 10 because if there's room, you know, to give a something in between like perfect and bad, then, you know, guests will naturally choose the number that best reflects their experience, right?
So I would say the best properties on Booking.com, the best I've seen have maybe like a nine, you know, exceptional cases, maybe like a nine and a half or so, but that's pretty much it. I think the booking, yeah, the rating system on Booking.com is much better.
And so if you have a good room momentum with a property on Booking.com, you know, if one person is not so happy and gives you like a five or a six or something, it's not going to immediately crush the performance of your listing.

Understanding Rate Plans on Booking.com

Jasper: Now, the other big difference between Booking.com and Airbnb is that Booking.com has a lot of different rate plans, which is common for hotels, right?
When you book a hotel room, you often can choose between, you know, non-refundable or flexible and you can choose like different, sometimes a different rate depending on how many people are coming and sometimes you can include breakfast or exclude breakfast.
So Booking.com allows for a little different rate plans, which Airbnb does not. Airbnb really only has one rate plan, I guess, although Airbnb now has the non-refundable discount of 10%.
But on Booking.com, you can create your own rate plan. So you can decide like, you can have multiple cancellation policies but price them at a different price point, right? Which is something that Airbnb does not allow.
So Booking.com, you could say like, hey, we have three different rates. We have non-refundable, which is the cheapest. Then we have, let's say, cancellation policy where you can cancel two weeks in advance and you pay a little bit more for that. Or you have a policy where you can cancel up to 30 days in advance and that one will be priced even higher than that, right?
And you can choose those percentages. So you can choose whether you want to make your flexible cancellation policy 10% or 15% or 20% more expensive. You can choose that. So there's a lot of flexibility on how you set up your rate plans.

The Merchandising Power of Booking.com

Jasper: The other big difference is Booking.com and this is where we're going to talk about most on this podcast episode is the merchandising options that you have. So Booking.com has a lot of different promotions and discounts that you can apply.
Booking.com it's a very conversion-driven platform. If you've never been a guest on Booking.com I highly recommend if you want to use it just use it as a guest a couple times so you can get familiar with the platform.
But essentially like on Booking.com whenever you book you're always getting a bunch of discounts. It's always impossible to book something on Booking.com without getting at least some type of discounts.
So Booking.com is very good at making the guest feel that they're getting a deal and they have all sorts of like marketing or sales or conversion tricks whatever you want to call it to make you feel to essentially like get you to book right?
That's probably why they're the biggest OTA in the world. You know they'll say things like oh there's only two rooms left you know 20 people have booked this in the last three days. Like they always every time you look at a property on Booking.com Booking.com tries their best to really make you feel like I gotta book this property right?

The Discount Strategy Challenge

Jasper: And so there's a lot of different discounts and deals and rates and all that stuff that you can play with which is on the one hand it's that's powerful because if we understand all these discounts and rate plans and we can apply them effectively then we can take advantages of those of those tools but at the same time if you don't really educate yourself on how all this stuff works then you can list on Booking.com and really not get the most out of it right?
So let me go through some of the most important discounts and some of the challenges that will come up as well.

The Genius Loyalty Program

Jasper: First of all there is a loyalty program on Booking.com that's called Genius okay so if you book a couple times on Booking.com they'll make you genius I think you only need a couple bookings or maybe even just one but there's three levels so level one is very easy to reach as a guest level two is a little harder and then level three is even harder I can't remember exactly how many bookings you need to reach these levels but I am a level three genius and I use Booking.com a lot whenever I stay in a hotel I usually use Booking.com.
And as a genius because it's a loyalty program that gives you benefits a host can choose to give a discount I think all the way from it starts at 10% but you can give a higher discount to different booking genius levels so you can do like 10% for like a genius level one 15 for genius level two and a 20 for genius level three.
But you can also offer additional benefits to genius guests so for example when I stay at a hotel as a genius three oftentimes get a free breakfast or sometimes they get a free upgrade free late checkout or early check-in so you get some advantages.

Why Genius Status Matters for Conversion

Jasper: So that's really important to know because as a genius guest if I book a property that's not that doesn't have genius benefits I feel like I'm missing out even if that property is priced more attractively I still feel like if there's a property that's $100 and one's $150 and the $151 has all these genius discounts and benefits even if it's a similar property my mind almost still wants to book the $151 because my mind kind of perceives that I'm getting a better deal yes it's more expensive but I automatically kind of assume that it will be a better product because it's more expensive and I'm getting genius benefits.
So that's one of the most important things if you're going to use booking.com is you got to get your properties eligible for the genius program so in order to do that you have to have free reviews on booking.com okay if you don't have free reviews then your property is not eligible for genius so you will be able to use the genius discount and that's going to really hurt performance.

The Impact of Genius on Performance

Jasper: According to chat TPG here genius drives quite a big increase in conversions I'm reading here that about 29% more bookings and 24% more revenue for partners using the genius program versus not right so that's a big difference okay so that would be the very first thing that I would focus on if I were you if you start using booking.com is or if you're already using it outgoing your account and check right now like which of your property are all your properties on genius if they're not see if they are legible and I would highly recommend opt-in if you can and then you should see an uptick in bookings.

Mobile-Only Rates

Jasper: Now one other discount that's very powerful is the mobile only rate so a lot of properties will give you a 10% discount if you book on mobile and I think booking.com they like it when people book for mobile so I think they're kind of encouraging that and so using the mobile rate discount offers a 28% booking increase on mobile devices compared to those without so that's a that is also a discount that I recommend that you set up.
Essentially when you get started on booking.com like you've got to offer some type of discount that's visible on booking.com platform so I'm not talking about the discount that you put on Price Labs or Wheelhouse because those discounts are not really visible on the OTA I'm talking about like discounts that will show up when you book it's going to show up on the price breakdown right so it's being communicated that the guest is getting a discount.
So if you offer a 10% mobile discount that's going to show up as a badge on your property when people are looking at it and so people will know like hey we're getting a deal here.

Other Discount and Visibility Options

Jasper: Now there's a number of other discounts that you can use there is the preferred program which is what's not really a discount actually but you get like a yellow thumbs up if you are part of the booking.com preferred program you pay a little bit more commission I think normally you pay 15% preferred you pay 18% but you get a lot more visibility and you get the thumbs up yellow thumbs up on your badge on your property which also apparently helps quite a lot with visibility right so booking.com will offer you more visibility because you're also paying like a few percent more commission and I think that's worth it.
Now there's a whole range of other promotions there is country rates even state rates so you can offer a different rate for people from different countries so you can say hey I really like when Canadian people come visit me so I'm going to offer a Canadian country rate where Canadians get 10% discount okay you can even do that for states so Florida Alabama whatever you want to do.
There's last minute deals there's early book rate discounts obviously there's lack of state discounts there is different occupancy pricing as well you can change the rate based on how many guests are staying and then there's like getaway deals and there's a lot.

The Challenge of Discount Visibility

Jasper: Now the challenge with all these different discounts or the challenge with booking.com in general is that you can't really get away with not offering any discounts because if you go booking.com your search snippet it's going to look very empty because other properties they have all these like flash these flashy things these badges of like genius thumbs up mobile discounts you know and it's all in different colors.
Best way to understand this is really go and booking.com and try to book pretend you're booking like a hotel your area or verification rental your area you'll see there's so many flashy things on there that if you just have your property on there and there's no discounts no genius no preferred not none of that stuff it just looks like something's missing you know it just like when I look at it like my brain automatically thinks okay that property there's something wrong with it it doesn't have any of the stuff that all the other properties have.
You kind of need to have a number of discounts.

The Price Consistency Problem

Jasper: But the challenge is it's basically impossible to have price consistency over channels over your different channels when you're using booking.com and you're maximizing you're leveraging all the different tools and discounts because first of all if you apply the genius discount only genius users will get that discount so if you're not if I'm not a genius then the price is going to be higher if you use mobile if I'm a mobile I'm getting the discount if I'm on desktop I'm not getting the discount.
So just by having those two discounts let's say you have a 10% genius and a 10% mobile right and let's say your minimum price is that you want to that you want to receive is $100 you then have to price the property at you know like 21 25 essentially because if there's a 10% genius and 10% mobile discount that's a 20% discount so 20% of 125 is 25 so you need back to 100 right.
So you have to you essentially have to mark up compared to your other channels if you're not offering these type of discounts on other channels and a lot of these discounts they don't exist on other channels right like Airbnb doesn't feel about they don't have these discounts so so you got to be careful with these discounts because before you know it if you don't mark up the booking the crown channel your PMS then if you're sending let's say you're sending $100 as your minimum price to different platforms someone's a genius and the booking mobile now they're getting it for 80 so that's a 20% lower price.
Obviously you can do the the markup of 25% right to compensate for the 20% discount but what's going to happen now is that people who are not a mobile and not a genius are going to see a higher rate so it's just it's very tricky to try and create price consistency over different channels and also to create the price is just going to depend on who's booking and how they're booking and that is you know it's not a huge deal it's just something that you kind of have to expect.

Managing Owner Expectations

Jasper: But you will you know especially if you're managing for owners you might get some questions here and there of like hey this booking came in you know a little bit lower than our minimum or I'm looking on booking.com and I'm seeing a price that's 20% higher than the Airbnb why is that you know you might get questions of owners oftentimes if they go on the different channels to check their own property and if they see like different prices and different platforms they sometimes get you know they get a little antsy.

The Strategic Approach to Getting Started

Jasper: So basically so how do we manage this I would say the way I like to manage it is I that we got to use these discounts right and sometimes typically we will use the genius that's that's the very first thing you want to do and as I mentioned that's the most important one and you need free reviews book little tension here but booking.com users don't leave as many reviews as Airbnb so you may have to reach out to your guests and maybe even offer them incentive to try to get your guests to get those first free reviews so you're eligible for genius.
Because yeah booking.com users are not as they don't leave reviews as commonly as Airbnb users do on Airbnb it's it's more of a culture that everybody always leaves a review book in the comments not really the case so you might have to you know poke your past guests and and try to get them to leave you a review.

The Review Window Opportunity

Jasper: The window to leave a review is much longer I think it's like six months or not three months or six months so you can go back right now if you're already in booking.com and you have a lot of properties that are not ingenious you can actually go back and reach out to your previous guests and maybe send them a message and say like hey you know we really need like a couple reviews you know if you could do me a favor and write me a review maybe give them an incentive say like hey I'll give you a 10% off or 15% off for your next day or something like that.

Markup Strategy for Different Scenarios

Jasper: So in the beginning it's kind of hard to manage because you can depending on what PMS you're on you can only set one markup to book to the entire booking.com channel some PMSs support individual markups so you could say hey the property where I'm eligible for genius I'll put a 10% genius discount and a 10% mobile and then I'll mark it up at 25% but some property if you have properties that are not eligible for genius and some that are and you can only set one markup then that's also going to create some price discrepancies right.
So if let's say you say okay let's take instead of doing 25% markup we'll do like 15 so that the properties that are not on genius are not going to get too expensive but then at the same time you know you're dropping the price for properties that do have genius you're dropping that a little bit more than you might want to.

The Launch Strategy

Jasper: Anyway so the way that we manage this typically is we'll start off we have a new let's say we have an entire new booking.com account let's say one of our clients and there's quite a few of them actually that based on our advice have actually onboarded booking.com as a channel and so we would start by adding a mobile discount discount to all properties so people would book a mobile will get a 10% discount in the beginning it's best to not put a markup because the whole goal just like an Airbnb the whole goal is to get to free reviews as quickly as possible so then you can you start using the genius program right.
So I think offering a small discount in the beginning for all your properties and not offsetting that by a markup so essentially booking.com becomes you know the more attractive platform at least temporarily to get some momentum on the platform right then you can switch over to like a 25% markup with the genius discount and the mobile discount you can also choose to do a 20% markup or a 15% markup so that means that if they are mobile and on genius the price will be a little bit lower than other platforms and if people are not on mobile genius it'll be a little bit higher.
But otherwise you know if you apply a 25% markup then if people are not on genius or and or they're not booking mobile they are getting a higher price than other platforms right so you kind of have to make a little bit of choice there I would say you know going in the middle is a good option unless you have you know super hard minimums where the owners get really mad if you go under that amount then you might have to go for a higher markup just to protect or at least in the off season to make sure that that minimum is really a hard minimum right.

The Property Page Score Tool

Jasper: So I hope this makes sense I know it's a little bit complicated but oh yeah and one more thing I wanted to mention before we wrap up here is on booking.com there is if you go on the group homepage you go to settings you can see a property page score so just like an Airbnb on booking.com is very important to optimize your listings the booking.com actually gives you a direct feedback on where your listing needs to improve so they give you a score so you know it could be anywhere from zero to a hundred percent and if you click on the score then booking.com will actually show you a breakdown of like how you can get to a hundred percent.
It's really important to get to a hundred percent so essentially your pictures have to be good you have to have enough pictures you have to have tags like there's a whole bunch of things that you need to have in order to get a hundred percent but that's important to get maximum visibility.

Summary and Key Takeaways

Jasper: Just to summarize you know I think booking.com is becoming a very strong channel in especially in the US they're growing fast so if you're not on booking.com yet I highly recommend you consider it it is a little bit harder the onboarding process so give yourself a little bit of time there's a learning curve give yourself a month or two to to get everything completely set up don't worry if you can't figure it out within a few days.
You have to use that strategy that I mentioned of getting to genius as quickly as possible and offering some additional discounts in the beginning a mobile discount is is one that I would highly recommend either do a different rate plan so it's good out of here to offer a non-refundable and a flexible rate potentially more if you want to.
And lastly I would say educate yourself you know it's a it's a bit of a complicated platform so make sure you take the time don't rush into it take your time and really understand the platform use it a couple times maybe as a guest it's the next time you book a hotel maybe use booking.com I mean pretty much all major hotels are on the platform so you have plenty of choice and experience the platform as a guest.
And then remember reviews are not it's not so common for people to leave reviews or ratings so you have to push your guests a little bit more or give them an incentive to do it and I think yeah those are the most important points.

Final Testing Advice

Jasper: And you know I would say also once you're set up on booking.com and you have your markup channel markup set up you have your discount set up go on booking.com and pick a couple dates and compare your pricing to your direct and Airbnb to make sure you have an understanding of like you know what the pricing ends up actually being because with the different discounts and everything and rate plans on booking.com it can get a little bit complicated so it's good to kind of do these little trial bookings and seeing like where the price is actually going to end up.

Outro and Call to Action

Jasper: So that's it for today if you are interested in working with us on revenue management or you want some advice on your current revenue management strategy then definitely go to freewellfoundry.com slash report we will create without any costs so we don't charge for this we will create a report for you where we give you recommendations we will tell you what you do well we'll tell you where you can improve and then if we think there's an opportunity for us to actually impact your portfolio and work together we'll give you that as well but either way you're going to walk away with some good insights so go ahead freewellfoundry.com slash report.
Yeah with that said that's the end of this episode so have a great week everybody and we will be back next week with another episode all right see you soon you.