MIAMI — The Caribbean Hotel and Tourism Association (CHTA) has decried Booking.com’s new commission policy – which includes extracting commissions on tips and gratuities or service charges incorporated into a guest’s billing – as “grossly unfair”.
The CHTA is calling for the policy to be discontinued and says an overwhelming majority of Caribbean hotels are rethinking using Booking.com. They say the new policy is aimed at generating extra revenue for its own gain at the expense of travellers, the Caribbean destinations, hotels and employees.
The CHTA was successful in getting Booking.com to stop commissioning destination fees. The OTA however says service charges do not fall under the destination fee category and are therefore not exempt.
Frank Comito, CEO and Director of the CHTA, explains:
“In communications with Booking.com since early June, CHTA objected to the online booker’s new policy of assessing commissions on some of the destination fees.
“The regional organization … took strong exception to the new policy, particularly with Booking.com’s action to extract commissions on tips and gratuities or service charges which are incorporated into a guest’s billing.
“These are pass on fees which go directly to the employee, and which, in some destinations, are mandated by government or collective bargaining agreements.
“In response to our appeal to exempt employee tips, gratuities and service charges from being subject to commission, a representative from Booking.com indicated in writing to CHTA that ‘A service charge shouldn’t and will not be considered as a destination fee and will continue to be commissioned accordingly.’
“Just as Booking.com changed course at our request to discontinue applying commissions to ‘destination fees’ upon reviewing and understanding their purpose (typically to support destination enhancement, promotion or beautification efforts), we urge them to reverse this policy which assesses commissions on employee service charges, tips and gratuities and is not founded on a full understanding by Booking.com of its negative ramifications.
“CHTA is a firm advocate for fairness, and encourages our members to comply with industry best practices, from adhering to GDPR regulations, to practicing price transparency whereby all add-on taxes and fees are fully disclosed to the customer and prospective customer prior to booking.
“We expect the same from our travel partners and categorically reject unfair and regressive policies that negatively impact the intentions of our destinations and hardworking people of the Caribbean.”
The CHTA points to a recent survey of its 33 national hotel and tourism federation associations, and hotels which revealed a belief the commission policy was “regressive and punitive” adding to Booking.com’s revenue while reducing the profitability of the Caribbean tourism industry, hotel operations and the earnings of many of the region’s employees.
Comito says the commissions will directly affect travellers because some of the higher costs associated with additional payments to Booking.com will need to be shared by the traveling public, as some hotels seek to recoup losses by raising prices. “In a region where consumer price sensitivity and high operating costs are an ongoing challenge, this presents the industry with an added predicament,” says Comito.
He adds that the commissions would be a short term profit for Booking.com which could eventually be a significant long term loss for the company as 84% of hotels surveyed are reconsidering using Booking.com as a result of the new policy.
More than 60% of hotels reported the Booking.com commission policy will result in changes in how they assess and/or cover these charges, which survey respondents indicated included: increasing rates; deducting the commission from the tip/gratuity amount paid to employees; no longer accepting bookings from Booking.com; or reconsidering the discounted percentage offered to Booking.com.
Among the actions a number of the region’s hotels considered taking, unless the policy is removed or revised, included applying a ‘Booking.com Fee Surcharge’ to customer billings to recover the added cost, and using other booking platforms.
