The Genius program, a loyalty scheme powered by Booking.com, promises all the right things: increased occupancy, guaranteed revenue and loyal guests.
Which hotelier in their right mind wouldn’t want that?
The Booking.com genius levels have been expanded. To qualify for genius level 1, a user just needs to set up an account. This immediately gives them access to the 10% genius discount – there is no longer any need to complete two stays within a year.
Your hotel may benefit from a quick revenue boost but, based on our experience with numerous clients, the long-term consequences can be devastating.
Read on to find out why.
1. It Only Builds Loyalty To Booking.com
Major hotel chains have provided their own loyalty scheme for decades.
A sign of a power-shuffle in the hospitality sector, the leading online travel agents have also launched their own versions in recent years.
In the past, to qualify for membership of booking.com genius level 1, guests just needed to accumulate two bookings in a two-year window and - voilà - they become eligible for a minimum of 10% discount with participating hotels all around the globe.
Today, guests just need to open an account on booking.com to receive the 10% discount.
The OTA giant provides guest support, sends out promotional emails and that's about it.
The cost of the program is picked up by hoteliers lured by ranking boost and better visibility in search results.
Guests are none the wiser; as far as they are concerned, their reward came from the third party platform. Their loyalty is now to Booking.com.
‘So annoying because guests think Booking.com is giving them the discount!’ - writes a business owner on the OTA’s own chat board.
Next time these travelers look to book in your city, instead of visiting your site, they will be inclined to use the Booking.com app - with all your competitors listed.
If you offer loyalty points to your guests, Genius will hurt you twice.
Not only are you footing the bill for Booking.com’s marketing efforts, but you also turn customers away from your own platform reducing their loyalty to you.
2. It Doesn’t Deliver On Promises
Booking.com claims that partners can tap into their most loyal, reliable and high-value bookers: those unicorns among guests who travel more frequently, book in advance, spend more and cancel less.
But there is no evidence to back up this statement.
We do not know how much Genius bookers spend on average or what the lead in time for booking is.
We have no idea if they travel weekly or just once a year.
Genius members only need to sign up for the program and they automatically qualify for their benefits.
Travelers often wait years to achieve a certain frequent flyer status or to earn their hotel points, which make them more appreciative of their privileges.
Genius bookers can enjoy discounts with minimum effort.
Easy come, easy go: they may stay and quickly move on to the next best deal.
3. It Undermines Your Own Marketing Efforts
If you run pay-per-click ads and participate in the Genius program at the same time, we've got bad news for you.
In our experience with several clients, as soon as hotels start to offer 10% discount on Booking.com, their PPC campaigns show a definitive drop in conversions and return on investment.
This makes sense.
Savvy travelers compare prices for the same property on several platforms before booking. Your advertisement may attract attention, but if a better deal was offered elsewhere, they will choose it.
It can also adversely affect your corporate segment. You may receive phone calls from upset company bookers demanding to know why the same price as their negotiated rate is on Booking.com.
Offering more favorable conditions to the public will cause irreparable damage to your corporate relationships.
Other customers may use it as a bargaining chip. Last minute bookers will negotiate harder over the phone, a wedding party can use it as a starting point for negotiations, so you end up offering a greater discount than you normally would.
4. It Destroys Your Bottom Line
Your most convincing reason to stay within Booking.com's Genius program is probably that alluring dashboard that shows how many reservations you received using it.
But is it too good to be true?
Do you know how many bookings you would have received without it?
Or how much money your own website lost as a result?
Have you used up your inventory for discounted offers and displaced more profitable business?
Again, your hotel is bleeding out on several fronts.
You lose revenue due to bookers who would have booked without the 10% discount on Booking.com.
Plus, the program harms direct revenue from your booking engine as customers will opt for the best deal elsewhere.
You are already paying a hefty commission fee. Giving an extra 10% means you are losing a minimum of 25% off your room rate.
Moving on to the most important question:
- When you lose an extra 10% of your revenue, are you still profitable?
- When you have paid your staff and settled your bills, do you still make money at the end of the month?
If your bottom line has not shown improvements with time (or possibly declined), these are the hard questions that need to be answered.
5. It Increases Dependency On OTAs
Independent hotels are fighting an uphill battle against OTAs.
Abundant marketing budgets, technological advances, strong brand recognition: all of these advantages have strengthened the position of third party websites on the market.
If hotels want to attract guests to their website, they need to reserve the best rate for their own channel.
This is where the vicious circle starts.
Hotels, especially family-run, independent businesses, want to expand their distribution so they guarantee cheaper prices to OTAs to secure more bookings. These offers often represent better value than rates on their own site.
Customers get used to securing the best deals using third party platforms, which helps Booking.com and their ilk to cement their status as the go-to one-stop shop.
Solutions like the Genius program, which was only supposed to be a quick revenue booster, become an absolute necessity to stay afloat.
The real genius of the Genius program is how Booking.com enlisted hotels to pay for its own marketing campaign.
In some instances, we have spotted our clients listed as Genius partners when they did not opt in to participate, which brings into question the entire concept’s credibility.