The introduction of payment systems managed by Booking.com, in particular the 'Booking Paga' program and virtual cards, has marked a significant change in hotel distribution. This was expressed by Xavier Pallicer, CEO of GuestPro, during his presentation at TecnoHotel OnTour Valencia, where he discussed how these methods have really affected revenue, operations and the ability of hotels to sustain balanced distribution.
"Many may not have considered it, but this issue is critical to the hotel's revenue and to ensure balanced distribution. If a competitor has the ability to offer arbitrary discounts on our price, the other players, especially our official website, are affected," he warned.
From the use of fax cards to the advent of PSD2: Booking's vision of this evolution
Pallicer discussed how payment methods in the hotel industry have changed over time. He recalled the early days of Booking.com, when they sent card information via fax, until the introduction of email, which led to an increase in fraud. "In those days, anyone with the card number could use it on a terminal without any protection," he commented.
In order to address these vulnerabilities, PCI-DSS was implemented, requiring the protection and encryption of card information, as well as recording who has access to that data. Then, on January 1, 2021, PSD2 was introduced, requiring stricter authentication for all payments. Although its implementation has been gradual and there are still some exceptions, most recent cards no longer allow transactions without the customer's express consent.
"What happened? Booking has identified a great opportunity in this case: requesting payment from the client in advance and subsequently paying the amount to the hotel," he detailed.
Booking Paga: more convenience and less control
GuestPro's CEO explained the real consequences of the program. On the one hand, it brings absolute convenience to the hotel establishment:
However, the hidden cost lies in the complete loss of control over the price.
"Booking has the option to offer a discount to customers who use Booking Paga. This discount is strategic: it is not something you can anticipate, as it is random and you don't know at what time or to whom it will be granted. Therefore, you cannot adjust for this. If you decide to offer discounts to counteract this situation, you could lose margin, as there will be bookings on which Booking will not apply the discount, but you will," he warned.
The denouement:
"In my opinion, this is the existential duality in the hotel industry: should I activate payments through Booking or not?" he concluded.
Deactivating payments: more control, more revenue... and more effort
For hotels that choose to deactivate payment management through Booking, the experience is different:
"Activating Booking payments is a revenue-related choice, not just an operational one. If we get too carried away, other problems will arise. Booking always finds a way to push; we have to find a way to stay in control."
According to Xavier Pallicer, numerous hotels are successfully leveraging paid links, especially those with a high occupancy rate or a strong offering. However, he stressed the importance of establishing a deliberate strategy: "It's not a question of all or nothing. It can be implemented gradually, but it is essential to make a decision. We cannot act without a clear plan."
