Date: 03 Dec 2018
Booking.com has 5.7 million alternative properties listings in its portfolio of 29 million total listings, and it is leveraging its newly-developed tools for property managers and occasional hosts to promote those properties more aggressively, just when its competitor Airbnb added another set of content and resource features to help rental professionals manage room rates and availability and market their listings.
Booking.com’s new tools offer bulk operation gadgets designed to enable higher operational efficiency while giving home owners more control over guest screening and more freedom in presenting their houses. Hosts can use filters to stipulate the length of stay, the number of occupants per stay or include rules such as no kids or pet-friendly. Hosts can upload personalized messages on the profile page to describe their properties and the surrounding.
After Booking.com introduced these tools in Las Vegas, the 198 Booking.com offices are working hard in 230 countries to get them off the ground. Meanwhile, a dedicated team of Partner Service is working closely with the property listers to improve their performance, and check the presence of the properties online and on social media to guard against fraud.
Home business well on track
For the third quarter ended September 30, Booking Holdings reported 201.3 million room nights booked worldwide, 13.4% higher than the same period last year.
Since announcing the volume of its non-hotel inventory for the first time in April, Booking.com had seen growth in both partners and guests.
Olivier Grémillon, Vice President of Booking.com, told ChinaTravelNews that the new tools were well-received. “We got feedback before that some partners didn't work with us because we didn't have these tools in the past. After the introduction of the new tools, a lot of the partners are ready to work with us, or work with us more.”
Glenn Fogel, President and CEO of Booking Holdings, said in the earnings call: “Our room night growth in alternative accommodation remains robust and is higher than our consolidated growth rate. We're also pleased to see that the number of customers whose first-ever booking with us was through our home products is growing nicely.”
Obviously, guests and property owners alike are both what Booking.com is keen to recruit. While the company is gathering more feedback from its partners to extend the filters in various ways and make its alternative accommodation listings more visible, users’ awareness of the niche options like homes, apartment, villas, treehouses and other unique places on Booking.com is still relatively low.
“That's definitely something that we're working on”, said Mr. Grémillon. “If you look at some of the commercials and billboards that we have in China right now, we showcase more of the home and apartment properties than our hotel properties, just to make sure that people really know that we are not only providing hotels but also homes and apartments.” The catchphrase of its ad on China’s video platforms is: “You’re going to miss a lot of homes if you only know about the hotels on Booking.com.”
Olivier Grémillon, Vice President, Booking.com
Confronting Airbnb & Expedia
Booking.com’s rival Expedia might be feeling the pinch after Booking.com announced its record number of alternative accommodation options. Expedia has since been trying to keep up with the Amsterdam-based giant. The recent acquisition of US-based Pillow and ApartmentJet is keeping Expedia in the game to lure more partners. Pillow gives homeowners transparency and control over short-term rentals, and ApartmentJet helps multi-home owners and operators earn revenue with vacant units.
Mr. Grémillon, however, thought of them only as ways to catch up. “We don't have any need for such acquisitions. We're already going quite fast. I wouldn't say never but there is no acquisition in the pipeline at this stage.”
Booking.com is confident because of its big scale, instant-booking model and transparent fee structure, said Mr. Grémillon, who was previously with Airbnb, where he served in numerous strategic positions over his six-year tenure with the company, including as Country Manager for France, Managing Director for Europe, Middle East & Africa, a role he held for four and a half years, and most recently as Director of Global Strategy.
A recent study showed that 66% of the people who booked an apartment or home looked at hotels at the same time. Booking.com is thus well-positioned with 30 different types of properties to give its users choices of a hotel or a home. “Basically, Booking.com is able to provide all types of accommodation for those who never booked with it. When you show up as a new shopper and the platform has no data on you, it will take care of you with all the options while refine the research depending on how long you’re staying and if you are with your family; and as soon as more information about you is available, the search results can be even better,” said Mr. Grémillion.
Booking.com basically allows users to “book what you see”, as 100% of its offerings can be booked in mere seconds, while most bookings on Airbnb and other platforms entail back-and-forth communication to confirm room availability. Airbnb claims that nearly two out of three of its bookings are made using Instant Book.
Booking.com charges partners 15% and offers the service for free for guests. Airbnb, on the other side, demands 3%-5% on the homeowners and 5%-15% on the guests. “Basically the fees are the same, but the spread between guests and partners could be different,” he said.
In fact, Airbnb has stopped charging guest fees in a limited pilot program in April for about four weeks, which gave rise to industry speculations that it would not necessary lead to lower commission income for Airbnb as the list price of properties may go up to build in extra fees.
China in focus
China, where Booking.com maintains the biggest presence in the Asia Pacific region, is growing in importance in the alternative accommodation space for the platform, which has more than 300,000 properties in China listed. In 2017, there were 3 million house listings in China and transaction volume grew a whopping 70.6% year-on-year to 14.5 billion yuan (USD 2 billion). The transaction volume is estimated to reach 50 billion yuan by 2020.
According to a recent research by Booking.com, 35% of the respondents globally were considering staying in a rental property in the next 12 months, while the number in China was 55%, the highest in the world. Also, some 38% of the Chinese users were considering listing their own residences on home-rental websites, against the global average of 23%.
This is in line with the latest development of the industry in China, because the Sharing Economy Research Center with the State Information Center has unveiled the initial specifications for China's shared accommodation industry, and a first batch of home owners in Xi’an in Shaanxi Province have been identified as legitimate business operators at about the same time, thanks to the joint efforts of Ctrip-invested Tujia and local government departments. This may signal more practitioners will join their ranks.
Collaborating with local partners to compete like a local
Booking Holdings’ presence in China runs extensively across hotel bookings, ground transportation and other segments. It has invested in major players including Ctrip, Meituan and Didi Chuxing, and its Singapore-based accommodation reservation site Agoda has tied up with homestay startup Xiaozhu in listing, technology, service innovation, and branding and marketing.
In June, Booking.com teamed up with Spring Airlines and unveiled a co-branded plane, and has recently trial opened its flagship store on Alibaba’s platform Fliggy to cash in on its heavy traffic flow during the Double 11 shopping festival.
On top of that, Booking.com is now available for booking on its official website, APP and WeChat miniprogram. It has also made considerable marketing investment in Baidu, Tik Tok, Toutiao.com, and online video platforms Youku, iQIYI and Tencent, according to Marsha Ma, Managing Director of China in Booking.com. All these partnerships and initiatives have secured growing exposure for Booking.com’s accommodation choices.
As proud as he is with the impressive global reach of Booking.com, Mr. Grémillon acknowledged the local counterparts like Tujia and Alibaba founder-backed Xiaozhu have geographic advantages. “Domestic players’ offerings are always very well-tailored for the local market... obviously we look at what our competitors are doing”.
To compete like a local in the home business in China, Booking.com’s partnerships with local players will be crucial. Mr. Grémillon said: “We're looking at all different partnerships and we're in discussion with many different players.”