I have a love hate relationship with booking.com (BDC) as I do with all OTA's and it is a sentiment that seems to be shared by many people who either use the platform or have tried to use it in the past.
We recently released a series of videos that talk about both Airbnb and BDC and we're getting a lot of push back from people who believe some things about BDC fervently in some cases that simply aren't true.
So I decided to put together a list of the most common myths and truths I hear about BDC as well as how to deal with them. It is important to note that beyondbnb.io are not affiliated with any of the OTA's and do not gain in any way from promoting any one above another. In fact, we encourage people to to be listed on as many of the platforms as they can regardless of their individual flaws and benefits.
Here is a list of the most common myths we hear about BDC:
BDC is more expensive than Airbnb - Myth
BDC has a higher cancellation rate than Airbnb - Myth
BDC has a high fraud rate for credit cards - Myth (in my experience)
BDC doesn't let you write your own descriptions - True
BDC does not allow you to screen guests before accepting the booking - True
BDC does not have insurance - True*
BDC does not allow you to rate guests - True
BDC is much harder to use than Airbnb - True
BDC is not worth the effort - Myth
I don't expect anyone to simply take my word for it and believe the statements above so I included my reasoning behind each below as well as a few comments on what you can do to overcome the difficulties.
BDC is more expensive than Airbnb - Myth
This is the most frustrating misconception about BDC and to make the point crystal clear, BDC is actually cheaper than Airbnb.
But doesn't BDC charge 15% and Airbnb only 3.3%?
Although Airbnb does only charge the hosts 3.3% they then also charge guests a service fee of 12-16% on top of what the host charges. Some people think this does not affect them at all as the guest pays for it and not them. If you're one of these people, you're welcome to that opinion but here's why it is wrong.
Guests don't give a damn about what % of the fees goes to the hosts or the booking channel. The one and only thing they care about is the total amount they pay. If they have a budget of $500 for a weekend away and your accommodation charges $500 but they then have to pay an extra 15% ($75) on top of that then they won't stay with you.
I'll use another example to illustrate this point. You have two petrol stations side by side. One charges $1.00/litre and the other charges $1.15/litre. Which one are people lined up at and which one is empty?
Guests are first and foremost consumers which means they are for the most part price sensitive and the amount they pay includes the entire amount, not just the amount that goes to the host.
If that same petrol station that charged 15c/litre more said to customers that the 15c went to the company that owned the brand on the station, not the owner, do you think people would somehow start lining up because the person that owns the station makes the same amount as the one next door? Of course not.
So you have to remember how much your guests are actually paying when you set your rates. BDC is simple, they just charge the host 15% and don't charge guests anything. This means that you need to raise your prices slightly on the BDC website so that the guests pay the same amount and you end up with roughly the same payout regardless of where the guest books.
This is a lot easier to do than it sounds, especially if you're using a decent channel manager. You simply set your rates for Airbnb and apply a % increase for the rates sent to BDC. We usually raise rates by 14% on BDC (13.76% if you want to be technical.) This means that the guest pay almost identical rates and your payout is exactly the same as it would be for Airbnb.
For example, if you set your rates on Airbnb at $100 with another $100 cleaning fee, the total fee would be $100 + $100 + $31.06 (15.53% Airbnb service fee). The guest would pay a total of $231.06 for one nights accommodation at your property. As we all know, Airbnb will charge the host 3.3% which leaves you with $193.40.
To price your property competitively on BDC, you would need to raise each price by the factor above (14%) so your nightly rate would be $114 and the cleaning fee would also be $114. The total amount paid by the guest would be $228 which as you can see is slightly less than the guest would pay on Airbnb. BDC charges hosts a 15% commission which means after all, you would receive $193.80, again slightly more than you would through Airbnb.
Depending on where you are in the world, Airbnb has a different service fee percentage. I used figures relevant for most of our listings which are currently 15.53%. The idea behind this exercise is not to say which OTA costs more or less by 1-2% it is to illustrate that the commissions are effectively the same when you look at the bigger picture. Even if BDC was 2-3% more expensive, then the two are still comparable and competitive.
BDC has a higher cancellation rate than Airbnb - Myth
Just like Airbnb BDC allows hosts to set their own cancellation policies including a 'cooling off period' where you can allow someone to cancel for a period of time penalty free after booking. This helps deal with accidental bookings and Airbnb has the same feature.
Where people run into issues is not understanding the policies they are setting. With Airbnb you have 3 options (5 really but only if you ask). Strict, Moderate and flexible. There are some other variations where you can offer a non-refundable rate if you give a discount. I don't like this option personally as it means you have to discount and if they choose not to opt for the non-refundable you're stuck with a less than strict policy.
With BDC, you can set the cancellation policy however you want it to be. For example, you can set it to be a non refundable rate only where they must pay everything up front. I don't suggest that as it means that you get fewer bookings, especially further in advance. Whenever you're setting cancellation policies remember to consider the way people pay. If they want to book a 2 week vacation at the end of the year, they probably don't have all the cash right now but they will save up over the year and pay for it at the end. Your policies should cater to that as well without being too flexible.
Instead you can take a non-refundable deposit that you charge at the time of booking and then charge the balance closer to check in. However you want to set it up, you have that option, it is really versatile. But if you don't set it then people can and will cancel however they want to.
In addition to that, if you don't stay on top of the platform changes, you will miss things like the recent 'Risk free' bookings which spiked our cancellations massively. If you actually read the policy, BDC guarantees a booking for those dates at those rates even if someone does cancel. I don't like it because it increases the number of messages and guest communication required so I turned it off and switched back to our own cancellation policies.
The root of this myth is the way that BDC makes you start. When you first sign up, BDC does not trust you, they will not facilitate payments on your behalf and they will not allow you access to guest credit card information. Your only option is to take cash or card at the property when the guest arrives.
The problem with that is that the guest can make a reservation and then not cancel and not turn up. When this happens, your cancellation policy doesn't mean anything as BDC most likely didn't collect any credit card upon booking so you have no means of charging them for the room.
Every new business on BDC goes through this process. It took us months to get past it and in the interim, I would call guests prior to checkin to ask for their card details to make payment over the phone. It was by no means a great experience for me or for the guests but we did make it work. After 3-4 months, BDC "trusted" us enough to provide us with guest credit card details and the option to require pre-payment.
We now automatically charge a card as per our cancellation policy and if it does not work, the guest has 24 hours to update their payment details or the reservation is cancelled.
The period where BDC does not trust hosts is the part where most people face all of the challenges and where most of the issues arise and people get turned off before following through. We pushed through it and now we're on the other side, the problems are few and far between. Mostly..
BDC has a high fraud rate for credit cards - Myth (in my experience)
I have heard this from a number of hosts who tried BDC. In my experience, this isn't the case. Some people use a pre-paid debit card or a fake card to make the original booking and then update it later (or not).
In our experience, this hasn't been an issue at all. We automate payments, set a security deposit and withhold that until our team has had time to service our apartments. If a card is flagged by our payment processor we report it and then the booking is cancelled.
Some people say they have had charge backs on their cards from guests through their banks requesting the charge be returned. I have not had this happen, but speaking to people who have, you can always show documentation of the booking so the bank will honour that payment.
One thing you do need to be aware of is Virtual Credit Cards by BDC. I have had issues with this in the past as not all bookings are made using the VCC even though it looks like they do. I received an email to say that BDC would be charging guests the full amount prior to arrival and then giving me a VCC to charge as per my cancellation policy. This sounded great because it meant the funds were always going to be there and I would have to cancel less bookings.
They word it as though this is the only option that guests have. However, it is not. I had two reservations on one weekend not show up and when I tried to charge the VCC, it showed their personal card which were out dated and not able to be charged.
This cost me about $2000 in one weekend which was not a welcome surprise. Now that I know about this though, we have updated our systems to register if it is VCC or not and run extra checks on the personal cards. The main issue was that I was not able to charge the VCC's until the day of check in. This was fine because the BDC website said guaranteed payment for up to 6 months after check in. So I changed our systems to not be charging until the day of checkin so I wouldn't get as many errors.
The problem is though that if the guest was not using the VCC option and we did not check their cards as per our cancellation policy and request new details or cancel it, we were left in the dark.
That was a really unhappy few days going back and forth with BDC about this and showing them the screenshot of their website saying payments were guaranteed. Long story short they are only guaranteed if the guest uses a VCC.
Since then I have been able to charge VCC's at the same time as the free cancellation ended meaning that we got that money and that we found any reservations that were not going to show up in time to rebook those nights.
BDC doesn't let you write your own descriptions - True
BDC does not give you the ability to write your own listing descriptions. Instead, you go through a very lengthy process to answer a lot of questions about the amenities of the property and they use that to generate your listing description.
For people only previously exposed to Airbnb this can seem very restrictive and I can understand that as well. We hire professional copywriters to write our listing descriptions and this means that money isn't useful at all on BDC.
When you consider how the platform was set up though, it begins to make more sense. It was originally built for booking hotels and has simply been altered to also accept Airbnb type listings. When you think about it, the average hotel has 10-500 rooms and if they had to write a description for each one, or each type then that would be a really time consuming task. On Airbnb it is mostly stand alone apartments or properties so having the full description makes sense. BDC has a much more detailed list of amenities and location descriptions but it is displayed in a different way to Airbnb.
Once you have completed the property set up, so your property completion score is at least above 80%, you can review your live site via the dashboard. If you want to change anything, you will have to contact BDC customer service to have them change it. You won't be able to get it to look like your Airbnb description but you can clear up any errors on the page.
Although it is frustrating to not be able to individualise your listing content, you also need to consider the way that guests make their purchasing decisions.
Most guests will follow a predictable pattern,
Search a location
Open the rooms they like the look of
Short list the ones where they like the photos
Then finally maybe they will read the descriptions before booking
A lot of guests don't read. If you've ever had to explain the house rules to a guest after they arrived, that should be proof enough of that. Most of them look at the pictures and make the decision form there.
I personally prefer having the ability to write my own content but, that's why you make your own booking website!
BDC does not allow you to screen guests before accepting the booking - True
BDC is instant book only unlike Airbnb that allows you to screen guests prior to arrival.
I personally like the instant booking feature and I use it on all the booking channels. We screen our guests by being super up front about our rules and policies. As soon as a guest books, we send a thank you message and also a list of our house rules. We set a time frame on all platforms for guests to be able to cancel for free (48 hours) which weeds out 90% of problem guests.
For those that slip through, we use on site noise meters. These have pre-set noise thresholds that link directly to a security team. If the noise alerts are triggered, the security team will be called to the property at the guests expense. This is also outlined specifically in our house rules and predominantly displayed in our listings. Using this method, we have been able to weed out the bad eggs and find those that want to try and do it anyway and shut it down quickly and decisively.
Remember how guests book, if someone else has instant book and you don't, you could miss out on that guest because they chose the listing that they could book right now.
BDC does not have insurance - True
This is 100% true and it is the best thing for hosts because they are transparent about it and give you the tools to be able to protect yourself in other ways.
Airbnb has a host guarantee that is not an insurance policy and should never be relied upon as insurance against property damage. A lot of hosts think they are insured but in reality, they really aren't and this puts them in a dangerous and potentially expensive situation. Here is an out take from the Airbnb terms for the host guarantee.
Airbnb uses the host guarantee as a marketing tool to give hosts a semblance of security which in my opinion is really shady. To make it worse, they don't allow you to collect your own security deposits from guests to protect yourself so you must rely on their resolution centre. The resolution centre where they have absolute authority on if and or when they payout for damages.
So yes, BDC does not have insurance, but none of the platforms really do. You need to protect yourself as a host with a real insurance policy. What BDC does allow you to do is to set and collect security deposits from guests that you have complete control over. If a guest damages something, you subtract the amount you need from the security deposit. If they cause serious damage, submit an insurance claim with your insurance provider and withold the entire security deposit.
BDC does not allow you to rate guests - True
This is 100% true. There are methods of reporting bad guests, but you don't have the ability to rate guests like on Airbnb. In my opinion, this is great. It saves me hours each week not having to submit guest reviews that are effectively meaningless.
We gain a false sense of security by relying on reviews for guests as it is only one member of the party. The person who made the booking might have a great history, but it doesn't guarantee the rest of the group is good and that they will always be good.
The threat of a bad review is only a threat to a very small group of avid Airbnb guests who have a long track record with the company. In my experience, these guests are also the harshest critics and the neediest consumers.
If you're worried about having bad guests, you need to upgrade your security systems to be able to stamp out anything that does happen, even with 5 star guests. There are great ways to do this and you should implement them if you are at all worried about having bad guests.
BDC is much harder to use than Airbnb - True
Having been through the learning curve and come out the other side, I will 100% agree with this. Airbnb makes it so easy to get started and very difficult to mess up too badly. With BDC, it is also easy to get started, but if you don't complete the entire listing and all of your policies and you don't know what you're doing then you could potentially lose some money.
Even if you set everything up correctly the first time, you don't have access to all of the tools you need to make it work properly. BDC for the most part won't take payments on your behalf and you will need to do this yourself, even after the initial stage where they don't trust you.
So absolutely, BDC is harder to use than Airbnb. BDC was originally created as a booking platform for hotels. This explains the way it is set up and it also explains why it is so much harder to use.
The more features and freedom the platform has, the harder it is to use. BDC has a lot more tools and freedom than Airbnb and most people who own a hotel are able to hire someone with the requisite knowledge to be able to do it for them. Or, they're willing to put in the time and learn because it is 100% necessary for them to survive.
In saying that, once you figure it out and get used to dealing with them as a company, it is a really powerful sales channel for your property and I will continue using it simply because it brings in the bookings!
BDC is not worth the effort - Myth
I think it is worth the effort. I have seen the results we have achieved through the platform and it contributes heavily to our overall success as a business.
If you want to take your business to the next level, you will need to learn about new tools and systems and learn how to use them well so that you can make the most for your business.
At beyondbnb.io we have spent months working through the intricacies and overcoming the hurdles that everyone faces when they first join BDC. We can now get a new property listed and fully operational within 10 days. We found this to be the most valuable thing for our clients, being able to deliver the end result which was a multi-channel holiday rental business with the simplicity of Airbnb.
If you want help with your multi channel journey, then I encourage you to read our blogs, have a look at our youtube channel and be sure to get in touch if you need specific help. We are happy to help new hosts.
P.S. If you're looking to take your Airbnb earnings to the next level and implement the same strategies the big hotels have been using for years to dominate the market...