It looks like Booking.com wants more money.
In a game-changing move, Booking.com is notifying hotels around the world that it will begin charging them commissions on resort fees, as well as other fee-based services, such as for Wi-Fi, cleaning, pet, gym, parking, etc., on top of a hotel’s base rate. Given these extra fees are very popular on vacation and other informal short-term rentals, one can assume they will be included in this policy.
OTAs (Online Travel Agencies) drive down hotel room rates. In response, hotels levy resort and other fees to try and win back the money they are losing on room rates. These costs in the past have been non-commissionable, but now Booking.com wants to include them.
Resort fees have been contentious between hotels and guests. The fees are not part of the advertised base rate for a room and can vary by hotel and city. In Las Vegas, for example, resort fees are sometimes higher than the room charge. Hotels rationalize charging the fees because they say it pays for various amenities at hotels, including pool use, gym access, and newspapers. Guests have often argued resorts fees are not disclosed clearly enough when booking.
Booking.com views some hotels’ penchant for charging resort fees as a way to game the system, and therefore cheat the online travel agency out of the compensation it believes it deserves for driving business to the properties. Of course, OTAs never acknowledge that the customer might have been direct, but simply chose OTA as a reservation option.
A Booking.com spokesperson claimed they are doing this to provide better transparency about pricing to the consumer.
The rollout of Booking.com’s commissions on hotels’ resort fees is expected to take place gradually by region. U.S. hotels are expected to start seeing the new charges in June. Booking.com informed them that its new policy would be implemented globally, and there would be no exceptions.
Many hotels admit they charge these fees as a way of getting commission rates down and being able to appear like you are offering a special price. This move might push hotels to do away with resort and other mandatory fees and go back to including these additional charges in the advertised price. Given that many large players are involved when it comes to these types of fees, it will be interesting to see how industry responds.
Other OTA giants such as Expedia have not commented on this change and gave no indication about its future plans surrounding these additional OTA commissions.
