An “overwhelming majority” of Caribbean hotels may end their relationships with Booking.com after the online travel agency (OTA) announced recently it would begin charging commissions on hotel fees, said officials at the Caribbean Hotel and Tourism Association (CHTA) in a statement issued Wednesday.
In May Booking.com officials notified international hotels the company would soon begin charging commissions on resort fees and fee-based services including Wi-Fi, in addition to a hotel’s base rate.
The policy change is believed to be the first time a major OTA has charged commissions resort fees, themselves a controversial subject among travelers, hotels and agencies.
Caribbean hoteliers are objecting to Booking.com’s levying of commissions on hotel staff tips under the new policy, said Frank Comito, CHTA’s CEO and director-general.
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In a letter to Booking.com, CHTA officials describe a “strong negative backlash” from the group’s hotel members, particularly on “how [the new policy] cuts into employee tips and gratuities.” Comito called the new policy “grossly unfair” and said CHTA is calling for its “immediate discontinuance.”
A survey of CHTA’s 33 national hotel and tourism federation associations and hotels members revealed “a belief the commission policy was regressive and punitive,” Comito said.
In addition, the commission hikes would directly impact travelers, said Comito, because the increases will be passed on to consumers. “In a region where consumer price sensitivity and high operating costs are an ongoing challenge, this presents the industry with an added predicament,” he said.
The commissions add to Booking.com’s revenue “while reducing the profitability of the Caribbean tourism industry, hotel operations and the earnings of many of the region’s employees,” Comito added. He said 84 percent of the hotels CHTA surveyed are reconsidering using Booking.com following the new policy’s implementation.
In a statement to Skift, Leslie Cafferty, a Booking.com spokeswoman, said: “We are updating our process when it comes to charging commission on mandatory extra fees that customers are asked to pay at the property.”
Cafferty said the new policy is “an extension of our overarching aim to provide our customers with transparent information about the total price they will need to pay at a property when they make a booking.” She added that the new commission policy “will also create a level playing field for all of our accommodation partners.”
Resort fees had already become a controversial issue between hotels and travel agencies. Agency groups say the fees are a way for hotels to avoid paying more commissions to travel agencies. Conversely, hospitality stakeholders contend the fees pay for hotel and resort amenities and services.
Resort fees have also sparked controversy between hotels and consumers, particularly in large and popular US tourist destinations. Fees are frequently not part of advertised room rates for a room, and in cities like Las Vegas, they can exceed room charges. Consumer groups contend resorts fees are often not disclosed to potential guests in a clear and forthright manner.
Meanwhile, Comito said Caribbean hotels are considering applying a “Booking.com fee surcharge” to customer billings to recover the added costs, and are also exploring using alternative booking platforms.
Yet Booking.com parent firm Booking Holdings Group also operates Priceline, Kayak among other distribution platforms and thus controls a significant slice of the online travel market. The stage is set for a stand-off that could extend for an undetermined period.
“Without further consideration and a reversal of your policy we can only advise hotels to reassess their use of your platform and consider placing added emphasis on other booking options,” Comito said.