Hostelworld increases commission up to 12%
Hostelworld, the online travel agent for the hostel sector, has announced today that it will be raising its service fee from 10% to 12%.
This announcement was made today via a mailing to the properties listed on its website. The announcement comes after global concern was expressed in July 2013 when the company introduced a new contract. Following a growing global chorus within the youth travel industry voicing concern over proposed contractual changes by Hostelworld, the company did make some concessions.
In September at the World Youth & Student Travel Conference in Sydney a group of leading youth travel accommodation providers and associations developed a declaration aimed at resetting the relationship between OTAs and operators. The Sydney Declaration acknowledged the symbiotic relationship between OTAs and youth travel accommodation operators and outlined a code of practice which could help reset the relationship.
Despite the general concern expressed by National Associations and verbal assurances made by Hostelworld to operators that commissions would not be increased, the organisation today announced that it was a necessary measure, citing increases in digital marketing costs and competition from multiple channels.
“Recent trends within digital marketing and competition from multiple channels have driven significantly higher cost per customer acquisition, whilst price competition within a challenging accommodation market has driven down the average return per booking. To enable Hostelworld to compete effectively in this competitive market, it is necessary to restore balance to the economic business model by raising the service fee per booking. This will allow the continual investment in technology and marketing that will drive your occupancy across the entire year, whilst retaining our position as the most price competitive across all the major OTAs”
STAY WYSE will be hosting a session at ITB Berlin on Online Distribution Channels: OTAs vs Direct Bookings. We would like to invite both operators and OTAs to join us to discuss the importance of OTAs for bookings and how hostels can potentially win the battle for direct sales.
The seminar will present the latest findings from the STAY WYSE research, looking at the supply and demand side of third party bookings. In addition it will also present some strategies on how operators can increase their direct bookings.
Join us in the Youth Travel Hall (4.1) at ITB Berlin on Friday 7th March on the Big Stage at 10:30 to 11:30.
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