Now Best Match is in full force, many people on subscription are being forced to adopt the Book It Now / Request To Book (RTB) on their listings.
In an ideal world both the host and guest want to make the transaction pleasant, frictionless and seamless as possible, with no confusion in the booking journey. These are not hotel rooms and the business has more moving parts, including contracts, extras, vetting groups etc…
Guests are confused when booking
We have heard quite a few comments this week about guest confusion and owner irritation over the double payment guests have to now make with the introduction of the guest service fee.
Many hosts are concerned over use of the HomeAway payment process and wish to continue with their own payment methods and have adopted this. This seems to cause a lot of confusion, initially with the host and also with a high percentage of guests.
The process goes like this
Guest uses “Request to Book”. Adds their details and credit card numbers. They also ask various questions.
The host replies accordingly, accepts the booking in the dashboard and sends them a link or invoice for the booking (minus the service fee). The host may explain in the correspondence the process (separate service fee and booking amount).
The guest then gets confused for all manner of reasons:
- The guest thinks by adding their credit card they have paved the way for the payment in total and do not know that there will be two debits.
- After the booking has been accepted they receive more correspondence (which we are told increases daily to the guest) from HomeAway with a payment link (see below).
- This payment link however appears to request payment for the deposit (25% as set up in the Homeaway Account), notated in red below, and also shows the balance whereas the guest is only paying the service fee when he clicks this button!
The effect on guests & hosts
The guest thinks they are paying twice and there is endless correspondence and opportunities to develop mistrust on both sides, which no doubt brings in the question of the service fee as well (see below):
The knock on effect
To any guest not involved in the industry the whole process seems crazy. Why enter card details twice. Hosts know the answer and often have good business process reasons for doing this. A guest however begins to suspect that one or the other of the parties is being fraudulent. It is then down to the host to explain the situation and this relies on their credibility and business approach.
HomeAway portray trust by visual guarantees, but this by default instills distrust in the hosts. Below is the HomeAway full reason for fees.
It would appear that the hosts are not to be trusted:
What can be done?
HomeAway is one of the biggest OTA’s and is part of a larger marketing perspective that all hosts should address in their increasingly complex and time consuming business. It’s not the only player in town anymore and the disruption is seeing all manner of opportunities.
This complex hybrid model cannot remain, however, and requires one of two things to remove the friction and most importantly for HomeAway an increasingly poor reputation and potential leakage.
Fully integrate third-party payments
The first is seamless fully integrated payments so the guest only adds their card once. They may be debited twice, but this is after the event and can be explained more easily. A host who wishes to use their own merchant facility will need to have a PCI compliant connection which will invariably mean using third party technology and more costs and a learning curve. This is a whole new can of worms for hosts and can be discussed another time.
Adopt Homeaway's payment system
The second is to adopt the HomeAway (VRP/Yapstone) payments system and be subject to their charges and cash controls. We have many questions on MOR liability and disclaimers by any neutral marketplace in this connection, but for another time again.
We would predict that with increasing numbers of managers and technology integrations, hosts that do not move in this direction, may be forced to adopt even harsher policies in return for visibility.
We also expect to see alternative payment options outside of card processing which may open up new vistas to guests and hosts alike, reducing fees but still managing the liabilities and trust issues. Cards may not be the solution in the future and how OTA’s would manage this remains to be seen.