Monday, April 26, 2010

OTA Commission Face-off

Just when you thought the Online Travel Agent (OTA) market couldn't get any more crowded, accommodation providers are being invited to register for a new booking site, Stay in New Zealand. 

This new Kiwi-owned accommodation booking site is being fronted by innovative Taupo motelier, Kayne Ginger.
"Our objective is to get your property out into the online public domain to sell your product and to get you bookings without charging high commissions. There are no setup costs - it is completely free to sign up. There are no hidden agendas or tricks - we are simply a small kiwi business trying to help other like minded kiwi businesses succeed." 
So what is the main point of difference with Stay in New Zealand?

Kayne Ginger will appeal to fellow accommodation providers by having a genuine commitment to challenge the entrenched 10% commission rate. Stay in New Zealand plan to stir the market place with their entry 9% commission rate and undertake to reduce this further as their business progresses.

When a guest makes a reservation through the site, a non refundable 9% of the total accommodation is charged to their credit card by Stay in New Zealand to cover commission and to secure a booking. It is up to the accommodation provider to charge the guest the net balance owing at the time of the stay.

Under Stay in New Zealand's initial 9% commission regime, the advantage of a lower agent commission will unfortunately be negated by likely credit card commissions charged to the accommodation provider from processing guests' payments.

However, the accommodation provider will benefit from receiving payments at the time of stay AND can look forward to promised future commission reductions.

Having a motelier fronting the new OTA is another interesting point of difference. We look forward to following their progresses to see if they are able to gain traction in a very tough market and put a bit of pressure on commission rates charged by their competitors.

The site will be live on the 3 May 2010. Accommodation providers can register by clicking: HERE

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