At the World Travel Market in London, eTN Publisher urgen Steinmetz spoke with the founders of the online booking platform, Bidroom.com, as they announced changes to their business model. The Hague-based company will no longer charge commission from hotels and apartments, meaning that they can be registered and receive bookings completely for free.
“In our first years on the OTA market, we were charging 2% commission – much lower rate than any other booking platform” – Bidroom’s CEO, Michael Ros says. “Thanks to the lower commission, hoteliers were able to give a discount to the guests, making it beneficial for all three sides.”
The startup claims to be bringing fairness to the OTA market. They advertised their low commission rate as a stance against the bad practices of the major booking websites, like high commissions and brand hijacking. Now, Bidroom.com has decided to give up on the traditional commission model.
“Even though our commission rate was the lowest on the market, it was still troublesome for some hoteliers to pay it upfront by purchasing Bidroom Credits, from which the commission was later deducted” – admits Casper Knieriem, CFO at Bidroom.com. “So we came up with the idea to change our business model. Commission is an outdated concept. We decided to welcome every hotel, vacation rental and B&B for free, and allow them to receive free bookings, as we continue revolutionizing the market.”
Obviously, by abandoning the commission model, the platform had to find another way to make profit. Ros and Knieriem hope the newly introduced Bidroom Plus plan will keep the company profitable. Bidroom Plus is a subscription package that is intended to help hotels get more bookings.
“Bidroom Plus is an upgrade over Bidroom Free, as it allows managers to add more information about their accommodation. With the Plus plan, their hotel or apartment gets a dedicated page on our platform, where the users can see the pictures, learn about the offered amenities, and book rooms. The dedicated page allows users to directly search for their favorite accommodation, instead of looking for any place to stay in the city they want to visit” – Ros explains.
But Bidroom Plus is much more than that. The subscribers of this plan will have their accommodation appear higher in the search results. It also enables them to connect Bidroom.com with the channel manager software. Additionally, they can have a button leading to their own accommodation website, installed by their hotel/apartment name on Bidroom.
“It’s not a secret that people want to know as much as they can, about their accommodation, before they book it. So, often they google it, and end up on the website of one of the major OTAs, because they outbid the hotels and apartments, and appear higher in the search engine results. Once they’re there, they may decide to book, making the manager pay up to 25% commission to the platform. With the link to their website installed on Bidroom.com, the users won’t have to google the accommodation, and this drives direct bookings” – Ros says.
With the introduction of the commission-free bookings, the platform’s website also received an upgrade, as Bidroom.com can now be browsed in multiple languages: English, Dutch, French, Polish, and Russian.
So far, Bidroom.com has more than 200,000 active users, and is nearing 15,000 hotels.
“Right now, with our new business model, it’s a no risk, high reward situation for accommodation managers. With the entire team in our offices in The Hague and in Cracow, we couldn’t be more excited for the things to come” – states Knieriem.