The Genius programme, 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? 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 or watch the video!
1. It Builds Loyalty To Booking.com, not the hotel's website
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.
Expedia introduced the Rewards+ Program, there is Orbitz Rewards and of course the Genius programme by Booking.com. To qualify for membership, customers just need to accumulate two bookings in a two year window and - voilà - they become eligible for a minimum 10% discount with participating hotels all around the globe.
The OTA giant provides customer support, sends out promotional emails and that's about it. The cost of the programme is picked up by hoteliers lured by ranking boost and better visibility in search results.
Customers 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 travellers look to book in your city, instead of visiting your site, they will be inclined 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 you are footing the bill for Booking.com’s clever marketing efforts, you turn customers away from your own platform.
2. It Doesn’t Deliver On Promises
Booking.com claims that partners can tap into their most loyal, reliable and high-value bookers: those unicorn of 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 do not even need to sign up for the programme - they automatically qualify for their benefits after two bookings. These reservations could have been made at anytime at any hotel around the world. Travellers 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 programme 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.
It makes sense. Savvy travellers compare prices for the same property on several platforms before booking. Your advertisement may attracted attention, but if a better deal was offered elsewhere, you paid in vain for that click.
Sadly, that is only one example of how the programme can harm your sales channels.
It can also adversely affect your corporate segment. You may receive upset phone calls from company bookers demanding to know why the same price is open on Booking.com as their negotiated rate. Even if they receive a greater discount, their contract is likely to contain blackout periods. While Booking.com allows for 30 blocked days, if you operate in a busy tourism hub, you probably restrict company bookings for the entire high season. Offering more favourable 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 programme 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 programme 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% off is essentially paying well above the market price. If another OTA called up and asked for commission close to 30%, would you even consider the idea?
Moving on to the most important question: When you lose an extra 10% of your revenue, are you still profitable? When you paid your staff, settled your bills, do you still make money at the end of the month?
‘Commission and the Genius discount take away hard earned revenue.’ - complains a hotelier on the forum. ‘I simply cannot afford the Genius program without raising my prices significantly across the board, which I don't want to do.’ - adds another.
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
Both international brands and independent operators 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.
The best weapon available to hoteliers to fight this issue is their pricing policy. 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 the likes to cement their status as the go-to one-stop shop. So solutions like the Genius programme, that was only supposed to be a quick revenue booster, become an absolute necessity to stay afloat.
The real genius of the Genius programme 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.
We encourage you to review your third party contracts. ‘Since pulling out of the Genius programme, I have continued to receive bookings and at my higher, normal rate.’ - confirms a hotelier based on her experience.
Contact your Booking.com account manager today - the smart decision is to leave Genius.