A new 8% ‘low-commission’ online travel agency claims to be offering a fairer deal in a sector where high commission rates have long impacted on hotel margins.
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‘Low-commission’ OTA aims to put hoteliers in control
Pictured: Suzie Barber
A new 8% ‘low-commission’ online travel agency claims to be offering a fairer deal in a sector where high commission rates have long impacted on hotel margins.
Hotel Bonanza plans to cut commission rates from an industry norm of between 15%-20%.
It claims this will place control back into the hands of accommodation providers, while offering consumers a membership scheme that gives them a discount on bookings.
The company is built on first-hand experience and its founding team is motivated to reduce commission charges for hotels after facing their own challenges using OTAs.
The consumer site is due to go live in the third quarter of the year.
Founder and chief executive, Suzie Barber, a former London hotel general manager, said: “We understand the frustrations of accommodation providers currently being squeezed by large OTAs and that’s where we saw a gap in the market for a more logical way to do business which doesn’t cut so deep into profits.
“When the business launches to the public in the autumn our membership card will give 5% off every booking, which will be courtesy of Hotel Bonanza. So if a customer is spending £200 a year on rooms, a membership is guaranteed to offer a saving.
“We have had an amazing response from the trade so far. There’s a genuine appetite for what we are doing.”
The rapid growth of OTAs over the past decade means they now account for just over half of the hotel industry’s total revenue figures.
In that time, the online market share has grown from just over 10% to an estimated 52% in 2015-16, according to research by Ibis World published in March.
