Booking.com says that nearly one on five of its users books hotels and other accommodation through it for business travel. (In the US, about a third of those bookings are places other than hotels, such as apartments.)
To gain more of that business travel spend, the Priceline Group-owned company launched a global product in April 2015 called Booking.com for Business.
The product targets travel managers, executive assistants, and business travelers.
It is a free upgrade account that gives access to the same inventory as leisure traveler see. But it has some additional functionality in reporting, visibility, and bare bones duty-of-care (or location alerting).
Its reports offer details into how much a company is spending by destination, by department, by traveler, by conference, etc.
While many business travel booking tools provide such information, Booking.com for Business can tout an easy-to-use interface that benefits from the brand's years of user-experience testing for its consumer products.
There are other little touches. For instance, at a city, country, or other level, a user can set budgets, which can then be surfaced to the travel booker throughout a journey to remind them to stay within limits.
Tnooz recently checked in for an update on the initiative with Ripsy Bandourian who came over from Apple in January 2014 to become senior product owner. Earlier in her career she was a junior partner at McKinsey.
Bandourian told us that while the initial focus of the product was on the needs of small- and medium-sized businesses, her team has been pleasantly surprised to have picked up a fair share of business from travel managers working at large corporations.
This interview has been edited for brevity.
Tnooz: How accurate is it to describe the rates offered to users of Booking.com for Business as “closed-user group” rates?
Bandourian: I t is accurate. By definition, these are people signing up for this particular account.
Tnooz: How does this relate to the Genius program, which offers deeper discounts for Booking.com’s most frequent customers?
Bandourian: The Genius program lets selected loyal customers receive an additional 10% off selected room rates at selected properties. When you become a user of Booking.com for Business, you get access to the Genius rates.
The Genius program is run by a separate team inside our front-end department that's focused on loyalty.
Hotels offer these discounted rates in exchange for getting primary visibility at the top of search results when Genius customers log in.
Tnooz: Why should Booking.com for Business travelers automatically qualify, in general, for Genius rates? I've only booked one or two trips labeled "business" on Booking.com and only a few other leisure trips, but I was immediately granted access to Genius rates.
Bandourian: Most business travelers interested in a booking tool like ours are very frequent travelers and that's why we've offered Genius program as part of the benefits of joining Booking.com for Business.
If a property has opted in to offer genius rates, you'll see those rates. But there's not an extra discount being added on. It's you automatically get to become a Genius and get 10% off when you sign up for Booking.com for Business.
Tnooz: So, if I'm a hotelier and when I get a booking from agencies like the BCD Travels of the world, I may pay a GDS handling fee ... or I may have a cost related to the CRS, but otherwise it's commission-free, right? But it sounds as if to connect with Booking.com for Business I would need to pay a connection service, like Sabre SynXis, etc., as a transaction fee for handling the reservation. Is that right?
Bandourian:Well, Booking.com for Business is part of the overall Booking.com platform. So whatever it is that the hotel is paying to be part of Booking.com stays the same. In terms of commission-free, you're absolutely right, that applies to negotiated rates but always all of the rates that aren't negotiated still have commissions involved by the agency.
Tnooz: I’m still a bit confused. If people who participate in Booking.com for Business on the shopping side as travelers, they are automatically included in the Genius rates. So, from the hotels’ perspective, aren't the hotels going to be down on RevPAR? Because don’t they have to both give this 10% discount off of the best available rate and then have to pay a commission to process the transaction given the B2B ecosystem?
Bandourian: What we're seeing is that hotels are seeing a higher ADR, on average.
We're seeing that our hotel partners who do offer Genius rates — obviously we track on how they're doing — and they're enjoying higher ADRs.
The way we run our business is we continue to test the metrics. So, while our ongoing assumption is that this was something that we should track to make sure, we certainly are seeing hotels benefiting and not the situation, in fact, that you describe.
When accommodation providers choose to make one of their rates a Genius rate, it's not flipping those across the board. They offer a 10% discount on a just one or two room types and rate options.
So, the reason why you see, for example, that Genius properties actually show a slight increase in their ADR through participation is that just because a customer clicked from that property, because it happens to be a Genius property, doesn't mean they necessarily book a discounted rate.
It's a visibility as a marketing technique that actually ends up being good for the property because you're targeting travelers that book frequently via Booking.com.
Tnooz: But let’s say I'm a hotelier who is nervous. It sounds like first I was giving the closed user group rates for a Genius program that I was targeting the kinds of people that would qualify to get Genius status. That was a small group and because it was small it would make a logical sense for me to try to really cater to these high-value people with a 10% discount as part of my segmenting without having to cut my rates across the board. But if Booking.com for Business's recruits members somewhat less selectively -- and not really profiling the spend behavior of the people the accept -- then my Genius rates are being given to people who aren't really the segment I was looking for. But I'm not a hotelier, so maybe I'm getting this confused.
Bandourian:That's a question that we asked ourselves and to make sure that the product was sustainable for both suppliers and travelers, right? It doesn't make sense for us to market something that isn't right for our partners.
So, what we found is that in Booking.com for Business actually, we see some of the more frequent, and some of the more loyal, and some of the more valuable customers that Booking.com sees. So, it's exactly actually the right target audience for these types of benefits and ...
We've been careful not to overstep the boundaries of the closed -user group type environment that is necessary within the Genius setup.
Tnooz: My understanding is you could use, once you're a member of and using Booking.com for Business, you can use it for leisure travel, as well. Is that right?
Bandourian: We went into that hypothesis that every individual who is a business traveler is also a leisure traveler so, we make sure that the experience stays consistent from that regard.
So, if you, for instance, are a Booking.com for Business user but you are booking for leisure, all you need to do is mark your booking as a leisure trip and it will not show up in any of your business reports, et cetera, et cetera.
So, we at that, from the get-go, let you have two persona effectively. The typical user for whom we developed this product has always had the two identities, business and leisure.
Tnooz: Wouldn’t hotels be happier with their current ways of getting corporate and business travelers? Why would they want to work with you?
Bandourian: There is a lot of revenue potential for the hotels here because we're really talking about bookers outside of their geography.
So the ways the hotels are targeting business travelers, generally, is either through the travel management company, the GDSes, or through their own direct marketing sources.
Now, it's very unlikely that a hotel in, say, Kansas City, could address a small business owner in Italy that happens to be going there for a convention. They don't have the digital marketing reach.
So, it really is about bringing/giving them access to those kind of customers via the most cost-effective digital marketing channel available to hoteliers, which is us.
Really, the case for using us is sustainable growth. If hoteliers don't see growth, they can drop out at any time. We are having high renewals.
Tnooz: I've talked with the folks at BookingSuite and they have some pretty sophisticated tools and dashboards that provide actionable analytics for the hotelier. Is there anything comparable with your product?
Bandourian: A lot of our reporting on functionality is in that direction, as well, so it allows you to be able to get functionality around how much the user finds in a particular location, et cetera. We'll continue to move in the direction of providing actionable feedback and advice for our users.
When we talk about doing 1 in 5 bookings as business travel on Booking, that means we have so much information and knowledge about what business travelers need, and want, and how they travel that allows us to build a really strong database product that really is unparalleled in the industry.
Tnooz: Because Booking.com as a whole knows about those 1 in 5, they know who has booked trips. When I used the site, it has asked me if I'm traveling for business or leisure. Would you be remarketing to people who identify themselves as having taken business trips to let them know about the Booking.com for Business service or is that not an approach you're taking?
Bandourian: It's one of the approaches that we've experimented with in the past, of course.
Tnooz: What's your overall message about the product?
Bandourian: Yeah, I think to me the main message behind Booking.com for Business is behind so much of enterprise innovation today, that what it is that we do at work doesn't need to be that much more complicated and more difficult than what we do for leisure.
Leisure travel has been so simplified, it should be the same for business travel.
It's the same for, we went from no iPhones in corporate, with iPhones and Macs being everywhere you look around. You see the same thing with Facebook at work popping up in corporate environments.
All of that is incredibly important, so it really is around being easy, being enjoyable, and being as transparent as possible delivering the maximum value, both for partners and for customers alike.
Booking has also been working with partners like Concur Travel, the online booking tool, to make sure inventory is available to business travelers regardless of which channel they use.
Earlier: Booking.com’s BookingSuite chief talks RateManager and hotel strategy