Picture this: You’re a dedicated homestay or hotel owner in India, working tirelessly to provide guests with a memorable and comfortable experience. The warmth of your property and the stories that unfold within its walls are not just part of your livelihood; they’re your passion. But, like me, you’ve encountered a common challenge – the “pay at property” model on Booking.com.
Fraudulent bookings or no-shows, can disrupt the well-orchestrated daily operations of a hotel or homestay. Staff may prepare rooms, allocate resources, and expect guests who never arrive. This misalignment between expectations and reality can lead to operational challenges and financial losses. It places an undue burden on property management and staff, who must cope with these disruptions.
The frustration of fraudulent bookings leading to no-shows and revenue losses isn’t just an abstract concern. It’s a real, shared experience that many property owners face in India. Few fellow owners have turned to me for answers, seeking guidance on how to implement the pre-payment feature on Booking.com, a powerful solution that can protect revenue and enhance the guest experience.
In this deeply personal and comprehensive guide, we will embark on a journey to explore the intricacies of enabling the pre-payment option. Together, we’ll gain insights and strategies to navigate this change effectively, not just for our own benefit, but for the entire community.
The Challenge of Fraud & No-Show Bookings
In the world of hospitality, we share a delicate balance where revenue is the lifeblood of our properties. The agony of financial losses due to fraudulent bookings, where guests can reserve accommodations without making any upfront payments, is a burden we’ve shouldered for too long. I experienced my very first fraud booking in the first month of operations of Areca County that too on New Years eve. I figured out that it is a fraud booking and luckily took another booking, which did not result in revenue loss. Most of the time you will also be able to figure out frauds bookings by just looking at the data. Below are some screenshots and examples of fraud bookings for our property.
As you can see the guest name does not look like a real person’s name. Property would anyway need government issued ID card to allow the guest check-in and its safe to assume this to be a fraud or fake booking.
As you can see again from the screenshot the name itself indicates that it might be a fraud. Even then you do not have any right to cancel the booking. You can only make a no-show which is an aftermath and could result in revenue loss.
Consider a scenario where guests can reserve rooms without any obligation to pay upfront. The result? A troubling lack of accountability that leads to a surge in unreliable and no-show bookings. Moreover Booking.com shares its inventory with Agoda and such bookings come with Agoda’s Bangkok address and phone number. This is inspite of the policy being set as guest needs to provide their phone number and address when they book.
This is indirectly a lapse from Booking.com that they are failing to provide customer contact in violation of the specified policy. I have contacted their support multiple times on this issue and they don’t care about the property owners.
The property owners are also forced to waive off the cancellation charges when there is a no-show from the guest. If you don’t waive of cancellation charges, they will charge their commission even when you have not collected any money from the guest and there is no way for you to collect money from guest. Ridiculous but that’s how booking.com exploits the owners and hence I term this also a fraud or dark-pattern behaviour from the platform itself.
When I started as a new property I wanted more visibility, availability and ease of booking on all third party platforms including booking. However 18 months later I wanted to tighten the screws on fake and no-show bookings and finally figured out the pre-payment policy settings on booking.com
The Benefits of Pre-Payment
Imagine a scenario where we can secure a substantial portion of our revenue upfront, significantly reducing the risks associated with fraud, no-shows and last-minute cancellations. This is the promise that pre-payment holds. We’ll explore how this feature can bolster our properties’ financial stability, using real-world examples to illustrate how it fortifies our financial foundations.
When guests are required to pre-pay for their reservations, it transforms the dynamics of commitment. Pre-payment not only minimizes last-minute cancellations but also instills a sense of responsibility in our guests. By emphasizing this commitment, our properties can foster a more reliable and dependable booking environment. This benefits us, our guests, and our entire community, creating a win-win scenario that’s essential for sustained success.
Enabling Pre-Payment on Booking.com
Before we dive into the process of enabling pre-payment, it’s vital to understand Booking.com‘s existing policies, especially in the context of the Indian market. This section will provide a comprehensive look at Booking.com’s policies and regulations related to pre-payment, including any associated fees or commissions. Armed with this knowledge, we’ll be well-prepared to navigate the Booking.com landscape for the benefit of our community.
Configuring our property’s settings is where the transformation happens. We’ll walk through the intricate process, offering a step-by-step guide on how to set up the pre-payment option effectively. Discover how to establish deposit requirements, select suitable payment methods, and fine-tune our pricing strategies to optimize the benefits of pre-payment for our unique properties.
Once you login to Booking.com dashboard check for “Policies” menu under “Property”.
You first need to set your cancellation policy. If you offer free cancellations anytime, you cannot collect pre-payments.
Pre-payment policy will work if you offer free cancellations before certain number of days before arrival.
Make sure to select collect prepayment “Before free cancellation ends”. The whole purpose of prepayment is for you to get assured booking from serious guest. You should get the payment at the earlier, if you delay guest may not pay at last moment and you may not get a substitute booking.
In case you are offering refunds it will be manual process. Hence I suggest keeping firm non-refundable policy with full pre-payment on booking.com
Clear and transparent communication with guests is a fundamental component of successful pre-payment implementation. Booking.com does not offer any prepayment collection service in India, as of November 2023. You have to manually request payment through bank transfer, UPI, credit card via instamojo payment link or PayPal.
You can automate initial payment request through “Messaging Preferences”. You can setup a templated message to be sent out automatically “when a guest makes a booking”. Below is the screenshot of message content that we use for Areca County
You can use dynamic tag for guest name. However the “Total Price” tag does not display proper amount for India. It shows the amount without GST and using it would lead to confusion on the total amount payable by the guest. So we just use generic wording like “total amount displayed to you with GST”.
As per Booking.com’s policy you have the right to cancel the booking if the guest does not make pre-payment. Once you initiate cancellation from your end, booking.com will contact guest and give another 24 hours to make the payment. If they don’t heard back or if you don’t receieve payment, the booking stands cancelled without any penalty to the property owner.
The journey to effective pre-payment implementation doesn’t end with setup. Continuous monitoring of the impact on our properties’ bookings and revenue is essential. You will have to track and analyze revenue performance, gather and assess guest feedback, and make adjustments based on our properties’ unique needs and evolving guest expectations.
Overcoming Potential Challenges
While pre-payment offers numerous benefits, we may encounter guests with reservations or concerns about the new payment requirement. This section provides strategies for effectively addressing guest inquiries and concerns, emphasizing transparency and flexibility in our communication. By nurturing trust and confidence, we can navigate guest concerns and maintain a positive guest-host relationship that reflects positively on our entire community.
First and foremost the guest is trusting third party booking platform so leverage that. Using booking.com’s message automation would mean that the communication would be sent out immediately and a high possibility that they will check the message. Make sure to include a note about contacting the booking portal customer care to re-confirm the pre-payment policy. While this adds to some level of trust, it also puts onus of some explanations from the booking.com‘s customer service representatives.
I also recommend you to add a note that the message is system generated so that the guest understands that it is sent to everyone and the pre-payment policy applies to everyone. You can also add a note that any further responses will be from human so that they reply back to the message, if needed.
Our expectation from this system is that guest responds back. Sometimes we also accept token payment based on guest request and that is sufficient to confirm that it is a genuine booking.
Frequently Asked Questions
What happens if a guest wishes to cancel their booking after pre-paying?
You have the flexibility to set your cancellation policies, including specific timeframes for allowing refunds. Clear communication of these policies is vital to prevent disputes.
How should I handle guests who insist on paying at the property?
While pre-payment can be encouraged, you can still accommodate guests who prefer to settle their bill on-site. You can also make exceptions or take partial payments.
Is pre-payment mandatory for all bookings?
No, pre-payment is an optional feature on Booking.com. You have the flexibility to decide whether to keep the book or cancel it, allowing you to cater to different guest preferences and needs.
Can I offer different pre-payment options to guests, such as a full payment upfront or a partial deposit?
Yes, you have the flexibility to offer different pre-payment options to guests. You can choose whether to charge a full payment upfront, a partial deposit, or any other payment arrangement that aligns with your property’s specific policies and guest preferences.
Are there any additional fees or charges associated with enabling pre-payment on Booking.com for property owners?
Booking.com typically charges a commission fee based on the completed bookings. Pre-payment itself doesn’t incur additional fees beyond the standard commission structure.
Can I change my pre-payment policies after they are initially set up?
Yes, you can modify your pre-payment policies on Booking.com. If you wish to make changes, simply access your property’s extranet and navigate to the ‘Property’ tab to update your pre-payment preferences.
What payment methods are commonly accepted for pre-payment on Booking.com?
Booking.com does not facilitate the payment transaction but juts helps with communication. You are free to request pre-payment through any method including bank transfer, UPI or Paypal.
How does pre-payment impact my property’s cash flow management compared to the traditional “pay at property” model?
A: Pre-payment enhances cash flow management by providing a more predictable and reliable revenue stream. Unlike the “pay at property” model, which relies on guests settling their bills during their stay, pre-payment ensures a portion of revenue is secured upfront.
Are there any tax implications or regulatory requirements associated with pre-payment for property owners?
The tax implications remain the same with or without pre-payment.
Can property owners offer exclusive discounts or incentives to guests who choose the pre-payment option?
A: Yes, property owners have the flexibility to offer special discounts or incentives to guests who opt for pre-payment. This can serve as an attractive feature to encourage more guests to make payments quickly.
How can property owners monitor the effectiveness of their pre-payment policies and adjust them as needed?
A: Property owners can track the effectiveness of their pre-payment policies by reviewing booking patterns, guest feedback, and financial data. If necessary, they can adjust policies through the Booking.com extranet to optimize results.
Can property owners offer a combination of both pre-payment and pay at property options to cater to diverse guest preferences?
A: Yes, property owners can provide a combination of pre-payment and pay at property options to meet the varied needs and preferences of their guests. This adaptability ensures that guests have a choice in how they settle their bills.
In conclusion, enabling pre-payment on Booking.com can bring numerous benefits to hotel and homestay owners in India. It effectively addresses the persistent issue of fraudulent bookings, reduces revenue loss, and streamlines the booking process for a more efficient operation. While challenges exist with the traditional “pay at property” model, pre-payment offers a viable solution that aligns with current customer behavior trends and the desire for security and convenience. By following the step-by-step guide and understanding guest preferences, hotel and homestay owners can make an informed decision and improve their revenue and operational efficiency. Additionally, clear communication, effective management of cancellations, and well-defined refund policies are key to success in the world of pre-payment, which has proven to be a game-changing decision for many property owners.
If you have any questions, concerns, or thoughts about enabling pre-payment on Booking.com, please feel free to leave a comment below. I’m here to engage in a meaningful discussion with you and provide any additional information you may need. Your could also share your perspectives and experiences related to this topic.