Why budget hotels are worse than airlines over online feesNewsBy Viewpoints | April 7, 2011Share This article was originally published on NB: This is a guest article by Bruce Greig, founder of KeepMeBooked, an online booking system for accommodation providers.Lots of accommodation businesses, especially smaller accommodation businesses like B&Bs and guesthouses, use some kind of commission-based service to handle online bookings on their own website.Most small establishments don’t even offer online bookings yet. But of those that do, most are paying commission on every one of their online bookings.This is a bit nuts, because the commission creeps into the rate and guests end up paying more to book online than offline.Don’t believe me? Here is some data from the UK:[Source: Eviivo Accommodation Index]There is a full 13% difference between average room rates online and offline. That’s like charging a £7 per night surcharge for booking online. Even Ryanair would balk at that.What’s happening here? It is hard to be sure, but probably the commission-paying accommodation owner realises that online bookings cost more to process than telephone bookings, so they start offering better deals to phone bookers to encourage guests to call rather than book online.Like this:Or this:Or this:[NB: These are screenshots from real accommodation websites offering online bookings through a commission-based service, but anonymised to save the blushes of those involved]To be fair, there could be other explanations - it may not be as simple as the accommodation owner hiking up their online rates.Maybe more people tend to book online for peak (more expensive) periods; or more people book over the phone for last-minute (less expensive) dates.But there is no escaping the fact that the average room rate is higher for online bookings than offline bookings, and that’s just not right.This is not only bad for guests who pay more to book online, but also bad for the accommodation owner – they are spending time handling routine phone bookings, when those bookings could be handled automatically online.Some guests like the personal touch of making a phone booking, there is nothing wrong with that. But spending time taking a booking from someone who’d rather book online is time wasted.Online booking should be cheaper and more efficient than booking over the phone. Independent accommodation owners should be encouraging those guests who want to book online to do so, not telling them to pick up the phone.Offering an online booking system, then actively discouraging guests from using it, is topsy-turvy.Can you imagine if an airline charged you more to book online than to book over the phone? It would be crazy. Their low-cost, automated online booking system would be deserted and their call centre would be overwhelmed.But the longer this situation persists, the more guests will learn that they can get a better deal by phone, and they won’t book online.Then a viscious circle will ensue: the independent accommodation sector already lags behind the rest of the travel industry in online booking penetration.And it might stay that way if even those accommodation owners who offer online bookings continue to steer their guests towards booking by phone.Those that like the flexibility of a commission-based booking system, would be better off just accepting the commission as a cost of using that system, rather than building it into their online rates.NB: This is a guest article by Bruce Greig, founder of KeepMeBooked, an online booking system for accommodation providers.