Alternative non-hotel accommodation needs to bookable online for the model to work, according to Booking.com’s chief executive, Darren Huston.
He told the Phocuswright conference in Florida this week that no other retail sector offers something for sale only on request.
“You need to have a digital calendar, you need to be able to commit to selling something when you say it’s for sale.
“The on request model does not work. You have to charge customers a fee; a fee free model for customers is the one that’s going to work at the end of the day.
“If we are wrong we are wrong, but it [fee free model] converts way better, you can bid on Google and we know that someone has booked.”
Huston said Booking.com was able to take out friction in the booking process for all sorts of accommodation types, right down to bed and breakfasts and hostels.
He said due to the power it has in driving demand for those types of properties Booking.com was able to move the model.
Huston picked out restaurant booking and activities as two areas he sees Booking.com growing.
He said restaurant booking specialist Open Table was one of the most exciting businesses in the group and it will grow internationally.
“Our aspiration is for it to go global and move into casual dining. It has a solid base. We want it to become the Booking.com of the restaurant industry.
“We still have a lot of work ahead of us. Of all the businesses in our portfolio it’s one I can see potential in. Today it’s our smallest brand but it’s one that’s really loved by people.”
A move into the activities sector will address the question of what people want to do when in the destination, said Huston, and is likely to be cracked on mobile.
He also said payments was a key challenge in this area.
“That’s where we have an opportunity to crack the code on the broader experience consumers are having in the destination.”
Booking.com will soon offer hospitality firms a cloud-based technology suite to allow them to operate their properties on a cost effective way.
Huston said the key for all hotels and providers was to offer a quality product and to differentiate.
“I know many small successful independent accommodations. The world has become more democratised in the information that’s shared.
“My advice is to run a great property and leverage the power of Booking.com, or Expedia, because they can bring the world to your doorstep. You don’t need a big marketing department.
“In the future it’s going to be about quality of experience and differentiation. If you have those two things you are really set up for the future.”