Booking.com is launching its new programme: “Risk Free Reservations”, at least for some hotels here in Spain. They are doing so in the same way as with other programmes the past: including all hotels by default. Hotels who don’t wish to participate must actively notify their decision, something which, in practice and due to lack of time or certain passivity, achieves the programme’s objectives, which are for most not to reply and to include more hotels inside the programme.
What is Risk Free Reservations about?
This is the statement from Booking.com:
Risk Free Reservations is a new programme whose objective is to help you make more money.
How does it work?
Booking.com clients will see non-refundable bookings as bookings with free cancellation. If the client ends up cancelling, we will find you another client for the same dates. If we don’t find anyone, your room will not be occupied but we will pay for the booking.
How does it benefit you?
Our clients are not always certain about their plans and they love having the flexibility that free cancellations give them. If you participate in this programme, you will receive more bookings but you will not incur any risks with cancellations because, if the booking is cancelled, we will find another client for you and if we don’t, we will pay it for you. No matter what happens, you will receive payment from your booking.
Which is the downside?
Receiving payment is guaranteed, but it may arrive slightly later than usual because the client may cancel the booking up to 24 hours before check-in. If we can’t find another client, we will deduct the cost of the booking from your monthly invoice.
If you have any questions or wish to unsubscribe from the programme, please contact your account manager.
Yours sincerely,
The Risk Free Reservations Team
Booking.com themselves are already anticipating the problem with the delay in liquidity, something which will barely have any impact on most hotels.
However, it omits other important problems:
Your average price will go down
If you offered both prices, non-refundable and flexible, one cheaper than the other, from now on the more expensive one loses all of its meaning for users and becomes unnecessary. You will stop receiving them. Booking.com may as well stop offering them as they will become redundant. You will only receive bookings of cheaper prices (the older non-refundable one that Booking.com has turned into flexible).
The decrease in average price can be easily measured:
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