Booking.com problems: How to solve them with custom software

By June 2023, travel app log-ins were 87% higher than by the end of 2019. OTAs have taken over the hotel booking industry, and if you are running a small bed and breakfast, you must be lured to sign up for a popular booking platform. A few months later, you're drowning in fees, struggling to talk to guests, and feeling like another one biting dust. Sound familiar?

Platforms like Booking.com and Airbnb connect millions of travelers with places to stay worldwide. Last year most travelers used OTAs as the top online resource for booking (80%). While these platforms have made travel easier, they've also created a bunch of headaches for property owners and managers. Why are so many businesses stuck between a rock and a hard place, and what is your way out of it? Let’s sort it out.

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Why Booking.com can be a let down for your hotel

At first glance, Booking.com seems great for property owners. It promises to put your place in front of millions of potential guests. Its popularity and success are only growing: in Q2 2023, it generated $5.5 billion in total revenue and a $1.3 billion profit. Its market share is estimated to be above 60%.

But dig a little deeper, and you'll find a mess of issues that can really hurt your bottom line and how you run things. Although varied in nature, problems with booking.com can be divided into several categories.

Problem 1: Booking commissions

Let's start with the big one: booking commissions. Booking.com typically charges 15% or more on each reservation. For a small business with tight margins, that's a big chunk of money. And it's not the percentage that's a problem — it's how it adds up over time. As you get more bookings through the platform, you're paying more for your own success. This is one of the major problems with Booking.com that impacts small hospitality businesses' growth.

15% is only the average commission – for different hosts, it can range anywhere from 10% to 25%. It typically gets higher if you use Booking.com’s member service. 

For example, if a room is priced at $100 per night and the OTA charges a 20% booking commission, the property owner only receives $80 for that booking. Over time, these commissions add up to a substantial amount of your revenues and leave you with little to no budget for growth. This is particularly challenging for hotels with no prepayment options.

Problem 2: The dangers of payment processing

Then there's the payment processing. Booking.com's system can be confusing, often holding onto your money for a while before giving it to you. This might cause cash flow problems, especially for smaller operations that need a steady income to cover costs.

Many hotel operators, particularly in Thailand, Indonesia, and Europe, have not received payments from Booking.com for at least several months in 2023. Booking.com called the payment delays a "technical issue," and this issue led to drastic difficulties.

Real property owners' stories say a lot. Trandafir Rat in Denmark was owed €10,000 and risked losing his business. Loren Infeld in Thailand was owed about $3,500 and had to pay expenses out of pocket, which ended with a property seizure. In both cases, they placed numerous support requests, and didn’t see any resolution.

Problem 3: Communication is the lost key

Communication is another painful moment for Booking.com users, ranging from communication between hosts and the platform to communication between hosts and guests. The platform acts as a middleman between guests and hosts, causing delays and misunderstandings in the process. If a guest has a last-minute change or special request, it might take hours or even days to get a response through authorized channels.

When problems do come up, many property owners say it's hard to get timely and effective support from Booking.com. The sheer size of the platform means that individual concerns often get lost in the shuffle. During the abovementioned 2023 crisis, Emily Stanley from Bali was owed $11,000 in March and struggled financially until she contacted a finance officer directly.

Some landlords have been paid once their stories became public or after contacting company officials through Facebook or LinkedIn. Are these extreme measures worth the potential benefits?

Problem 4: A threat to economic sustainability

The Booking.com payment crisis highlights critical issues surrounding economic sustainability in the hospitality industry. To better understand this, let's define economic sustainability and explore its relevance to Booking.com.

Economic sustainability refers to practices that support profitable operations while ensuring financial stability and resilience against market fluctuations or crises. With OTAs like Booking.com, maintaining economic sustainability becomes particularly complex for those relying on ‘book now pay at hotel’ models. Several key issues threaten the economic sustainability of these properties:

• Pay-on-arrival bookings through OTAs are more vulnerable to no-shows and last-minute cancellations. Without upfront payments, hotels end up with empty rooms and lost revenue from late room booking.
• The Booking.com crisis highlighted how payment delays can cripple hotel cash flow. And OTAs often require hotels to offer the same or better rates on their platforms, limiting the ability to offer special deals for pay-on-arrival guests.
• Bookings through OTAs make it difficult for hotels to build direct relationships with guests. Pay-on-arrival hotels often receive limited guest information from OTAs until check-in, making it hard to prepare for guests' needs or upsell services in advance.
• Managing bookings from multiple OTAs for pay-at-property hotel guests results in accounting errors. Also, some OTAs restrict a hotel's ability to quickly adjust prices or inventory for pay-on-arrival bookings, and hotels end up making less money than they could have.

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Airbnb: A convenient booking platform or a set of challenges?

Airbnb seems to be a good way out for small property owners and individual providers. More than 448 million Airbnb nights and experiences were booked in 2023 alone. While Airbnb has positioned itself as a more personal alternative to traditional booking sites, it comes with a set of hurdles for property owners and managers.

Some issues are common for both Airbnb and Booking.com. Airbnb hosts face similar challenges with delayed payments or disputes over cancellations and refunds. The "book with a commitment to pay" model leaves hosts vulnerable if guests cancel last minute or if there are issues with payment processing.

Some other problems are specific to Airbnb, so let’s take a look at them closely.

Problem 1: Safety is the priority and is a challenge

There have been numerous instances of serious crimes occurring at Airbnb rentals. Hosts have reported cases of guests severely damaging or ransacking their properties, as highlighted by the "#RansackGate" scandal in 2011. These issues highlight the risks of booking without payment.

Customer support is crucial in these situations, as individual property owners are even more vulnerable. Meanwhile, many hosts complain about Airbnb's reliance on bots and AI for customer support, making it difficult to get help with serious issues.

To fix the growing issue, Airbnb faces ongoing regulatory challenges in many cities around the world. However, it seems to pose an even greater inconvenience. Local governments have implemented strict rules around short-term rentals, sometimes requiring special permits or limiting the number of days a property can be rented. This regulatory uncertainty is a big headache for hosts trying to run a consistent business.

Problem 2: It burns you out

Airbnb can really be a source of stress. The OTA frequently updates its policies and features, which can require hosts to constantly adapt their strategies and listings. These changes impact hosts' visibility and booking rates without any warning or recourse. Apart from the obvious financial risks, this lack of stability negatively affects the motivation and well-being of hosts.

For hosts who rent out their own residence, managing the balance between personal use and guest bookings is even more challenging. This can lead to scheduling conflicts and added stress in managing one's own living space as a business. A widespread phenomenon called Airbnb host fatigue refers to the immense struggle to maintain the Superhost status, which happens mainly because of the review system. What’s wrong with it?

Problem 3: Weaponizing reviews against hosts

While guest reviews can be helpful, they can also be weaponized by unreasonable guests. A single negative review, even if unwarranted, has a significant impact on a property's visibility and bookings. Given that 29% of travelers consider reviews from other travelers as a main factor when booking accommodation, this issue becomes even more critical for hosts. The potential for unfair or retaliatory reviews adds to stress and uncertainty.

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Competitors often create fake guest accounts to leave negative reviews on a host's property. By leaving multiple negative reviews, competitors lower a property's overall rating on the platform. Also, competitors sometimes abuse Airbnb's review removal process by flagging legitimate positive reviews as fake, potentially getting them removed and harming the host's reputation. This practice presents a great challenge to the economic sustainability of affected hotels.

Here’s how Leonard Fuld from The Intelligent Nonprofit describes Airbnb reviews and complaints: “It uses customer complaints as a competitive weapon.” With more power given to a customer, the platform created the environment to use it against the hosts, with the ability to leave complaints without stepping foot at the property.

Problem 4: You aren’t free in your fee

One of Airbnb's biggest issues is its unpredictable fee structure. Unlike Booking.com's straightforward commission model, Airbnb's fees vary depending on a mix of factors. At first glance, the commission is lower: Booking.com adds a service fee to the total cost of the hotel booking, which is usually about 3-15% of the reservation subtotal for guests. This fee is charged to facilitate the use of the platform.

Airbnb also automatically charges additional fees beyond the base nightly rate, including cleaning fees, security deposits, extra guest fees, and cancellation fees. These fees increase the total cost of a stay, so guests should carefully review all potential charges before booking to avoid surprises. This also makes it hard for hosts to accurately price their properties and forecast revenue.

Airbnb's algorithms and pricing suggestions sometimes conflict with hosts' own pricing strategies. While these tools are meant to help optimize bookings, they also pressure hosts to lower their prices in ways that may not be sustainable for their business model.

The subscription cancellation fee is another hidden stone, as the platform charges 20% of the booking value of the canceled listing. This complex fee structure is one of the major problems with Booking.com, Airbnb, and similar platforms.

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The freedom you get with custom travel management booking software

With all the challenges of the large booking platforms, many property owners are turning to custom travel booking software. These tailored platforms offer a range of benefits that address many of the pain points associated with sites like Booking.com and Airbnb.

First and foremost, custom solutions eliminate the need for hefty commissions. By owning your booking platform, you keep 100% of the revenue from each reservation. The freedom over your business operations is further enhanced by a built-in Hotel PMS that helps you track all transactions and keeps the customer data for upsell, special offers, and personalization. At COAX, we have experience in building booking and property management systems that put your processes at ease.

For example, business travel booking software helps you deliver specific packages tailored to your company's travel policy and budget. This can include pre-approved hotels within a certain price range, flights with specific airlines, and even car rental options that meet your company's green initiatives.

The flexibility of custom online travel booking tools

Custom platforms also offer greater control over the booking process. You can set your own policies, create flexible pricing structures, and communicate directly with guests. This level of control allows you to provide a more personalized experience and quickly address any issues that arise. 

If you’re one of the hotels that take cash only, we can still integrate cash payments into your custom platform. Many custom platforms offer payment gateway integrations. This allows you to accept a variety of payment methods, including credit cards, even for cash-only hotels. The platform would handle the transaction securely, holding the funds until the guest checks out. The hotel would then receive the payment on the bank account, minus processing fees.

As a travel tech company, COAX aims to empower property owners and managers with flexible, user-friendly tools that streamline hospitality operations and maximize profitability. Focusing on the unique needs of the hospitality industry, we use our tech skills to develop custom features that address pain points associated with larger booking platforms and tailor solutions to your business needs.

Mobile travel agency software to power up your bookings

Those travel agencies who provide a mobile app get 60% of their bookings. This fact alone makes travel mobile apps crucial for companies who want to achieve steady revenue growth. COAX is specialized and skilled in creating seamless travel mobile apps that perfectly cover the needs of your customers and help you take control of your bookings without the hefty commissions.

Unlike rigid platforms like Booking.com, these solutions offer a high degree of customization. Property owners can tailor the system to match their branding, set unique pricing rules, and create custom fields to capture important guest information. This flexibility allows businesses to maintain their identity while still benefiting from powerful booking tools, which is especially crucial for book-now-pay-at-hotel providers.

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Hosty: Your booking management buddy

While custom solutions offer many advantages, developing and maintaining a booking platform from scratch can be costly, especially for small businesses and property owners who want to turn their apartments or houses into additional revenue sources. This is where online travel booking tools like Hosty come in as a middle ground between off-the-shelf platforms and fully custom solutions.

Hosty's mission is simple: to empower property owners and managers with flexible, user-friendly tools that streamline operations and maximize profitability. Created and fostered by COAX, Hosty was designed to solve the pains of hospitality providers by offering a free booking service without commissions.

How Hosty addresses the problems with Booking.com and Airbnb

Hosty addresses many of the issues we've discussed with larger booking platforms:

• Unlike Booking.com's 15% fee or Airbnb's variable rates, Hosty is completely free. This means you keep 100% of your revenue, improving your bottom line.
• Hosty's built-in CRM allows effective communication with guests, eliminating the middleman delays often experienced with larger platforms.‍
• Custom reservation rules and automate seasonal pricing give you more control over your offerings.
• Hosty offers a mobile-first booking app that is easy to use for hosts and guests.‍
• Fast registration with no verification needed means you can start using the platform quickly.
• Hosty can empower your existing web listing or social media page with booking widget, so you can make the most of your online presence.
• You can manage multiple locations from a single profile – and view all bookings in one calendar.‍
• Desktop version is available for those who feel more comfortable working with a big screen.

Hosty is designed for the owners or managers of small hotels, hostels, cottages, or apartments who need quick optimization and positive changes. Small business owners who are eager to grow with little or no investment can greatly benefit from our free tool. Hosty is also a helping hand for OTA marketplaces that don't want to share a big chunk of revenue with booking providers but still need online booking services. 

Customize Hosty to meet your needs

One of Hosty's key strengths is its ability to add custom features specifically for your business. If you have specific needs that aren't met by standard online travel booking tools, Hosty’s team can work this out by developing tailored features.

For example, we can add a module that automatically schedules cleaning and maintenance based on hotel reservations, with options to coordinate with local service providers. By the way, payment integrations, customizable dashboards, and reports will be part of basic functionality and released in the next few months.

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Finding your path out of the large booking platform lock-in

As we've seen, popular booking platforms like Booking.com and Airbnb come with significant drawbacks for property owners and managers. From high commissions to lack of control, these issues can seriously impact a business's bottom line and how it operates.

Custom solutions and specialized travel management platforms offer a compelling alternative, providing greater control, improved profitability, and the ability to truly showcase what makes your property unique. While developing a fully custom platform may not be feasible for every business, there are now many options available that bridge the gap between off-the-shelf solutions and fully custom systems.

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FAQ

What are the main issues with using platforms like Booking.com and Airbnb?

The main issues include high commission fees, payment processing delays, communication difficulties, safety concerns, and lack of control over pricing and policies.

How do custom booking solutions address these problems?

Custom solutions can eliminate commission fees, provide better control over operations, allow direct communication with guests, and offer more flexibility in pricing and policies.

What is Hosty and how does it differ from major booking platforms?

Hosty is a free booking service that addresses issues with larger platforms by offering no commissions, a built-in CRM for guest communication, custom reservation rules, and a mobile-first booking app.

What are the benefits of using a channel management system?

Channel management systems allow property owners to list on multiple platforms while managing everything from a single dashboard, saving time and reducing errors.