HL COMMISSION ONLY NOW OFFERED

[apexblue]

There's no listing fee to pay, which makes it all completely risk-free. All we charge is a small processing fee of just 3% on your successful bookings.

Well they rolled this out faster than expected.

[Lindisfarne]

Wow - Much quicker than expected !!!

What's coming next ?

" Never the twain shall meet "

The likes of HL, TA, HA, OD have watched the large agencies such as Sykes and Wyndham Group ( aka hoseasons,C4You, English C Cottages ) rake in circa 25% commissions which can be as much as £ 300 per booking ( average cottage 30 bookings p/a ? ) while they languish behind at £ 150 subscription for a year !!!

It doesn't take a genius to do the maths and what probably irks further is that the agencies are listing all over the place including the above portals.

Will the following happen ?

HL etc. take full control and start at 3% but gradually increase to 15%

Sykes and Wyndham Group etc come under greater pressure to compete and reduce their commissions to 15%

We have seen this sort of thing before with Supermarkets and Petrol stations encroaching on each others business model so it will probably happen

What does it mean for the cottage owner ?

Any thoughts ?

[kg1]

Was it an option and you could stay on a listing fee basis if preferred ?

[e-richard]

while they languish behind at £ 150 subscription for a year !!!

When last did you check HL subs prices? They're more than double that today !!!

[newtimber]

Sykes etc come round and inspect the cottages they list; produce glossy brochures; pay for all the advertising; offer guarantees to people renting etc, someone on the end of a phone in case things go wrong etc and the money is paid to them from which they pay the owners. This obviously is a far higher level of service than HL and the person booking can be sure that they won't be victims of any type of fraud.

[booboo]

There's no listing fee to pay, which makes it all completely risk-free. All we charge is a small processing fee of just 3% on your successful bookings.

Well they rolled this out faster than expected.

Apexblue I have just been over to HL and I cant find this offer only a listing fee?

[kg1]

Excuse my ignorance but if you don't use Booking Manager how do they know a booking has been made? Or will it be a condition that you have to sign up for BM? I also couldn't see anything on the site.

[apexblue]

It came in about commission only on an old listing that had expired.

[apexblue]

Excuse my ignorance but if you don't use Booking Manager how do they know a booking has been made? Or will it be a condition that you have to sign up for BM?

You will have to use BM if HL go totally commission only. Can't see how much they are charging guests though.

[Essar]

It's not the end of the world for owners, it's the future - not necessarily progress - that is decided by the listing sites, there will always be a market for the independent owner the sites know this. You can't blame them for wanting to tie you into their "booking management" offering, what you can do is use it to your advantage by adapting.

The way it is with HA/HL is very understandable.

They are now providing an advertising platform for owners and agents (and time sharers) in a very fast moving social network world.

This world is extremely competitive and huge, the profits will also be huge. They see young upstarts like Airbnb and their ilk; and see how effective and dynamic such internet software and sales model can be. HA decided long ago to implement a commission based model only on all their sites, the implementation will take time when you have 275,000 properties to convert without losing too many.

They respond by trying to provide a modern easy to use platform and sales model; but because their customer base is so large and so diverse they cannot provide a system that will suit everyone, so they go for a "one-size-fits-all" development.

They cannot change the way they work with so many live customers, so the changes have to be "crept in". Announcing it would rock the market and create panic within their customer base.

For the vast majority of owners this is not a problem; but for a large proportion of independently minded owners this will cause grief - I include the majority of LMH owners in this group.

Now the problems really start to happen; they see that the revenue models will also change - currently largely annual subscription based with different bandings and add-ons - to the more profitable commission based.

Commission based systems are also quite good for independent owners on listing sites as you should be able to start and stop the listing at will which may suit your opening periods much better. Problem is they still need to tie you in, so this is were the Booking Manager, Reservation Manager & TripAdvisor reviews develop. They can tie-in many owners because of the build-up of reviews and the payment systems they are introducing, these owners will tend to stick to the site that they are happy with and if the management software is half-decent they will use it for all their communications. You can see this happening with some of the comments on this site, newer owners without their own system or a home-made excel system with a limited opening season and simple tariff will be attracted to such an on-line provision. The more complicated owner with multiple properties will probably not, as they also use two or more listing sites.

I use both HA and HL, along Cottages Direct, each for a different geographical marketing base. I also use a very sophisticated communications and property management system, similar to PIMS. So, subscription based advertising for me is expensive, I can't wait until they're all commission based it will suit me down to the ground.

Interestingly TripAdvisor has started pay-per-click-through for holiday rental calculations to your own website, this would also work for me, as you can land the enquirer on your reservation form page with all the fees calculated for them - just book now! I have signed up for this and will let you know how it performs.

Both HA/HL will go this commission based route quicker than you think, HA has already started with it's agents in the US, FlipKey is beta testing with selected owners, so, the fact that HL/TA have started to introduce it is no surprise to me.

FlipKey: 3% Owners and between 4% - 12% Guests (no subscription).
HA: 3% Owners and between 4% - 8% Guests (-50% subscription).
Airbnb: 3% Owners and between 4% - 12% Guests (no subscription).
TA Pay-Per-Click: £0.87 per click (HL subscription).

It increasingly appears that the major sites will eventually all go along this sort of pricing route; whether it is a simple annual/quarterly/monthly subscription, subscription plus commission, commission only, commission only to owner & guest, Pay-Per-Click or a combination of a bit of each they will move. It's better for them as it increases revenues, but it is also better for independent owners, by giving you more control to turn on or off your listings when you need to and build in a fixed amount on your tariff to cover the listing, presently we have to pro-rata the subscription over a variable number of bookings when you only know the overall cost per booking at the end of the year/season.

Of course the bigger question is "How will the guests respond to being charged a large percentage booking fee on top of the quoted holiday rental price"? Probably, just pay it like they do on Airbnb.

[Lindisfarne]

while they languish behind at £ 150 subscription for a year !!!

When last did you check HL subs prices? They're more than double that today !!!

OK you are correct HL listing fee is higher but the point I was making is that the portals HL etc may receive say £ 300 p/a whilst the agencies are taking on average £ 4500 p/a PER COTTAGE ( Based on typical 30 weeks x £ 150 commission average )

It's a whopping difference - They want a slice !!!

Sykes etc come round and inspect the cottages they list; produce glossy brochures; pay for all the advertising; offer guarantees to people renting etc, someone on the end of a phone in case things go wrong etc and the money is paid to them from which they pay the owners. This obviously is a far higher level of service than HL and the person booking can be sure that they won't be victims of any type of fraud.

Don't forget that Sawdays have inspections and the glossy brochures / advertising. Sykes won't be paying out of their own pockets they will rely on the holidaymaker taking out insurance.

Their service should improve, in theory, as the revenue stream increases with more trained staff. I agree with you on the fraud aspect but once they have inspectors that will be nailed down

[e-richard]

It's not the end of the world for owners, it's the future....

Damm you Steve, I have just spent about half an hour off line composing a response that matches just about everything you have said. I totally agree with it all, and have a couple of things to add:

For the vast majority of owners this is not a problem; but for a large proportion of independently minded owners this will cause grief - I include the majority of LMH owners in this group.

I wonder how big the independent owners market place really is ?
Inevitably LMH subscribers will over estimate it (well, certainly its importance ).
The reason I bring it up is to consider what opportunities there may be for the small scale pure listing sites to really come of age. If they can consolidate perhaps into a somewhat larger group/consortium and generate reasonable quantity of leads, then now is their time of reckoning. Just read Essar's analysis of the issues facing the big boys as they metamorph.
Personally I am sceptical. If these mid range listing sites have not made it yet, what makes us think they can step up another gear? Its a very costly business, and not suitable for part timers. Its also flying against the long term trends.

And finally:

Of course the bigger question is "How will the guests respond to being charged a large percentage booking fee on top of the quoted holiday rental price"? Probably, just pay it like they do on Airbnb.

If there's no choice, then guests will pay it. The best that can happen is a price war between the big boys. The worst is that there will be a switch towards taking a bigger chunk from the owner.

[roxytoo]

How will it effect agents who have no availability calanders because they can always offer something else?

[Lindisfarne]

Hi Essar - Your post is very informative indeed

I don't think owners will see it is the end of the world and we will simply adapt as the large players evolve their business models.

There will without doubt be a place for the smaller portal / platform companies and their presence will become even more important if the holidaymaker has to stump up commission based booking fees

In terms of the cottage owner being happy to pay commission - I doubt when they reach double figures anybody will be !

[Richy]

Has anyone also noticed that HL now have a redirect if you just reply to an enquiry? Presumably so they can see your reply to an enquiry and assist in confirming if a booking gets made or not?

Sorry Just realised this has already been covered in other posts.