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I have other hotel sites with different partners and the conversions seem much more reliable.
Any suggestions?
We average about 2,000 visitors per day and do not book more then 1 hotel per day.
ouch.
One would assume that they must in=tend to eventually merge hotel club and lodging.com?
"HotelClub is a world-leading full service provider of online hotel reservation services, offering great service and discounted hotel rates. Operated by Flairview Travel Pty Ltd, a wholly owned subsidiary of Cendant Corporation and part of Cendant Travel Distribution Services Division, we have been providing online reservation services since 1996 for more than 8,500 hotels in 41 countries worldwide."
5.1 The Company will pay the Partner a percentage of the revenue generated by sales resulting from this new cooperative venture. The transactional commissions will be paid according to the following outline:Commission Paid = (CI - HI - (CI*PP)) * BCP
CI - Client Invoice (what the client paid to us)
HI - Hotel Invoice (what we paid to the hotel)
PP - Processing Percentage - 9%
BCP - Booking Commission Percentage - 50%
What does it actually mean. If the punter pays the hotel $100 how much does the affiliate actually get (usually)?
I do run a few other hotel sites and the conversion is significantly higher than what I'm getting with Hotel Club.
Basically, I get in the region of 1% conversion on click-throughs to their reservation system. (This is only a fraction of the actual visits)
All I was wondering was whether they were un-competitive price-wise (which I guess i could research myself) or there was some other factor.
I haven't been running the program long enough to give any meaningful stats on conversions, but at the moment would guess around 1-1.5%.
Totally agree with travellin cat - traffic is the mantra here. We've significantly buried the booking options within our site, prmarily because they're not the primary revenue scheme, but given the glut of cookie-cutter hotel affiliate sites out there, competition is pretty crazy. Build the traffic, give them content that doesn't come with a cookie-cutter canned site, and hopefully they'll book with you.
Cornwall - no answer to that - it entirely depends on the commision deal the consolidator has with the hotel...
Ok, for the sake of arguement, assume the hotel pays the consolidator 10% commission..
.. then what does Hotel Club's figures mean they pay the affiliate? Does anyone understand it.
Or perhaps someone who is getting cheques from them can give an idea of the percentage they actually pay you at the end of the day
Commission Paid = (CI - HI - (CI*PP)) * BCP
CI - Client Invoice (what the client paid to us) $100
HI - Hotel Invoice (what we paid to the hotel) $90
PP - Processing Percentage - 9%
BCP - Booking Commission Percentage - 50%
Commission Paid = (100 - 90 - (100*.09)) * .05
ie commission of 50c on a $100 sale if my math is right - thats what I mant when I said earlier, its a very high procesing charge
I was talking to a hotelier recently who told me that one well known company they had dealt with in the past charged hotels up to 30% commission on bookings.
I'm currently working on a scheme to become a hotel provider - I guess the way to go is up the food chain!
I agree with that. I've often thought that perhaps a few affiliate sites should get together (pardon the fact that they are competitors) somehow and do something to benefit them both. Perhaps becoming their own direct agent and getting the full commission. Of course, you then have to do the staff thing for bookings and collections. So there is a big trade off but the risk gets smaller with more companies sharing the load.... Then there is the trust and cooperation factor.....so I'm probably just dreaming because it couldn't happen to everyone's safety and satisfaction. oh well....
Regarding going DIY ... I don't know - I guess it depends on the area of the world you're in and the type of acommodation you're chasing. Using the figures posted by surfgatinho he's looking at a click "value" of $6-$8 per click - compare that to say Adsense, and its pretty good value (or is by my stats anyway!) If you're working as an affiliate and aren't dedicating too much time to how you work the affiliate link - then that is a reasonable return by my books.
We run our booking links in a similar way to adsense - and budget wise we treat them as adsense listings as it takes us about 30 seconds to add a link and after that can largely forget about it - not unlike adsense - cut, paste, forget!
To my mind you'd need to be doing a substantial volume of bookings to justify doing it yourself - particularly if all the properties you'd list are already in existing consolidator programmes -- does the world really need another consolidator?!
Effectively you're talking about setting up an entire booking/travel agent infrastructure - including sales people to go out and hit the hotels, booking staff etc etc for a return (using above example) of say getting $12 per click instead of $6.
Thats a hot idea if you're doing say 200-300+ bookings a day, but otherwise I'd lean towards leaving it as a glorified adsense.
HOWEVER if most of the places in your part of the world are NOT in existing programs but the demand to book them online is, then perhaps it is a niche that is worth taking a gamble on.
This is the case in the part of the world we focus on - around 90% of the properties we're involved with do not currently do business online - and we're costing it out at the moment... but so far the numbers (and importantly the workload - extra staff etc) are significantly higher than we expected.
Thats the way it goes, by and large the lower the cost of the hotel room, then the higher the % commission. Hotels will certainly not regularly pay anything like 30% to travel agents, but percentage commissions will edge up when hotels need to really shift rooms at a really low price.
In other words it is more realistic to look at your average dollar commission per booking as the indicator of of the profitability of the exercise
Problem is that, in the abstract, it is not possible to know the answer to that until you have done a test with that consolidator, and determined what it is. They may only attract low value bookings
I was trying to get the answer to a different question on what Hotel Club take..
..stuartmcdonald example in post #10 above presumably means that with a 10% commission in force, then the affiliate will get $4.55 0n a 10% commission rate. Or $7.05 on a 15% rate
..and as he also says
"ie commission of 50c on a $100 sale if my math is right - thats what I meant when I said earlier, its a very high processing charge "
I round terms, correct me if I am wrong, Hotel Club are offering affiliates 4.5% or thereabouts. Not a terribly attractive percentage rate to affiliates, but would be worth considering if the conversion rate was high - there are lots of schemes offering 5% or more. The first post in this thread implies that there is not a high conversion rate with them.
I read your thread and wanted to put in what I know as a merchant. 1 purchase in 2000 clicks is outrageous. Our average is 1 in 100, with our best affiliates closing much higher than that.
5% commission is very good, most Linkshare travel merchants pay 3%. The formula does seem a little complicated, but the final result is what counts.
So perhaps my original post was not a text book example. If you create a hotel reservation site only, then yes you should get a much higher percentage, especially if you are paying for the clicks.
Our margins allow us to still pay the affiliate (after processing fees) an amount roughly equal to 5-6% of the GROSS booking value. In some cases, that amount can be lower, if the mark-up on the net rate is not a lot, at hotel's request. In some cases, its higher, as we are able to command fairly high margins in some destinations, whilst remaining competitive. Many of our affiliates have generated commissions of USD 30-50 per booking
Yury Glikin
Affiliate Marketing Manager
HotelClub
