Reviews are big money - but maybe not always for all the right reasons

A recent Daily Telegraph piece by Katie Morley that focused on her experience with Booking.com - the world's dominant OTA (online travel agency) - got us thinking. How much value - for the consumer - do these review-driven sites actually add? To look at the comments beneath the article, they were roughly split 50/50 between 'love Booking.com, always use it' and 'Won't touch it with the proverbial'. Katie was firmly in the latter camp. Where are we? Read on. You may be surprised.

The facts

Booking.com

Revenue: $ 23.7 billion

Profit: $ 5.7 billion

Just over 1 billion room nights booked, plus 74 million rental car days and 36 million airline tickets.

        Booking Holdings owns: 

• Booking.com
• Priceline.com
• Agoda
• Rentalcars.com
• Kayak
• OpenTable
• Rocketmiles
• FareHarbor
• HotelsCombined
• Cheapflights
• momondo

Where does Booking derive the majority of its revenue? It charges a commission on every booking, of whatever kind, ranging from 15 to 25 per cent. Using Booking's marketing add-ons, such as 'Visibility Booster', can drive commissions 'north of 40%'...

For that, the consumer (it would be naive to say the hotel/car hire company/airline 'is paying') is getting just what benefits? 

We'll let this article explain. Interestingly, it is written by someone advising the hotel trade. Please read it to the end, because until well after halfway through, we were thinking 'using Booking is a no-brainer for consumers'. Then it began to dawn on us: if it is bad for the hotels (who mostly don't have the time and/or resources to manage a very complex process), then it might ultimately be bad for us as consumers as well. 

Here's Google Gemini's take...

Our criticisms

1. Booking would not appear to care which hotel a consumer books, as long as they book through them. 

The last point -  good for the consumer? We think not

2. There are many allegations in hospitality forums of Booking outbidding individual hotels for Google ads. Meaning that customers of the hotel searched for will be shown its listing on Booking in preference to the hotel's own site

3. Taking a fifth of the hotel rack rate as commission might be justified if Booking added significant value for consumers. There is a 'convenience' factor in many transactions, and this, we will concede, applies to hotels as much as any other service. The main difference between buying a hotel room and, say, a financial product or a medical service is that most of us are already pretty well qualified to choose a hotel based on publicly available information: location, price, photographs/video and - yes - previous guests' reviews. The key here is that all of these - including reviews - are not exclusive to Booking - they are freely available to any consumer with access to a computer or smartphone.

4. A product like 'Visibility Booster' would - Yelp offers businesses something similar in the USA, but withdrew from the UK and EU markets when regulators questioned the benefit to the consumer of such arrangements -  appear to act directly counter to the consumer's best interests by promoting one hotel over another for an extra payment.

5. The clincher: we spoke to all our colleagues and asked them a very simple question: if you booked a hotel trip using Booking, what did your host say to you on checkout? The answer was the same in every case: 'I hope you enjoyed your stay, please call us directly if you wish to stay again.' Some establishments added: '...and we'll give you a really great room...free breakfast.' and more.

6. One final point: you can only write a review on Booking.com if you have booked through Booking.com. Needless to say, this skews the reviews and the resultant scores in favour of 5-star and away from 1-star, as those who have had a bad experience through Booking.com are less likely to use the platform again. Anyone can write a review on Google.

Here's what Google Gemini has to say on the subject...

Conclusion

Twenty per cent of consumers' money is far too high a price to pay for a service that is mostly available for free with little or no extra effort. That's not to say that Booking should not exist, in the same way that personal shoppers should not exist (actually, upon reflection, that's possibly doing personal shoppers a disservice), but that consumers should question whether or not they need a service that effectively ramps up the cost of their hotel room by a fifth.

In more detail... 

Back in the day, when Google was in its infancy, OTAs probably had a role. No longer. Google will find you a hotel, and Google will translate the hotel website into your language. And Google Translate will also enable you to draft an email to the hotel listing your requirements. 

And Google will provide you with reviews, its own and those from other platforms, including OTAs. And if you need the comfort of a third-party to give you confidence, maybe even think of using a good old-fashioned travel agent (that receives about half the commission that Booking does).

So: most consumers are better advised to make a checklist of their criteria and then deal with the hotel and/or ancillary service directly.