We've been in the business of selling hotel rooms for more than 30 years, most of those years making money via commissions paid by hotels. Typically, that has been an industry standard 10% commission on the nightly hotel rate, paid after the guest completes their stay. This has been a great business model for countless travel sellers, and their hotel partners. We bring hotels business, and we get paid only when they do. So, what's changed and why are hotel rates escalating? Hotels are paying ever-increasing commissions and travelers are paying through (often hidden) service fees - and the middleman is making a killing.
Escalating Hotel Rates - Blame Service Fees
If you've ever selected a great hotel rate online, only to find the final total with 'taxes and fees' to be something wildly different than the rate you selected, we're out to solve that problem.
For travelers, these are hidden under the 'taxes and fee's you see at the end of your booking process. Still other competitors buy rooms or negotiate 'wholesale' rates, charging the guest directly for their stay and adding their own markups. At Stayker, we only charge a booking ($2) booking fee when we're providing more customer service, and you can book up to 9 rooms for that same fee. Our closest competitor is charging $19.99 (plus) for every room booked.
The major online travel brands are great at what they do, and they are getting paid handsomely. Over the last few months, we've been working with hotel owners, learning more about their perspective, and the numbers are astounding.
Escalating Hotel Rates - Blame Commissions
Hotels are now paying on average 18-35% commission for their online travel agency bookings by the major OTAs. In addition, if the hotel is a franchise (brand) they may also be paying their brand commissions on those same bookings, then additional fees for distribution via the online systems. So, the next time you wonder why your hotel rates are escalating, think about these numbers.
Of course, most hotels need these OTA bookings to survive, so they have become reliant on the big travel brands - and the brands know it. Ultimately, the customer's price is increasing, and often, their hotel experience is suffering as the hotel's margins shrink.
We're about to partner with tens of thousands of these hard-hit hotel owners, bringing a new online travel brand to market. The brand is free of commissions for hotels and free of fees for travelers. How? Hotels pay a (low) flat monthly fee to sell through this new platform, a fraction of what they would pay the big OTAs. Those fees support the booking technology and the marketing efforts (think Ryan Reynolds & Mint Mobile). It's a true SaaS model business and long overdue.
You (the savvy traveler that you are) pay nothing to book with this new brand, and get a free membership (so we can sell you private rates). Oh yes, did we mention, you still get your hotel brand reward points?
Welcome to the fee-free future of travel booking. Check out this big new venture - HotelSavvy.com