Oct
14
How secure are online bookings these days? Everyone knows how online booking works. A small deposit is collected from the traveler at the time of booking. Our advice is that the optimal deposit amount to collect for a booking on your own website is 35%. Why 35%? Research shows that one-third of the booking amount is the best deposit level to secure bookings, ensure that bookings are not fraudulent, and ensure you do not have a loss if the guest changes their plans. Since one-third is 33.3%, and is an awkward amount to collect, our advice is that 35% is the most efficient amount. If you prefer a range, then our recommendation is 35% – 75%.
Before we get into the details about collecting deposits, let’s talk about some basics. First of all, don’t use services that require you to manually confirm bookings, contact your guests directly, and obtain deposit monies yourself. These services are still in the 20th Century. There are still quite a few of this type of reservation service that claims “instant booking”, but cannot deliver. Beyond this, if your online booking method involves a Paypal interface, know that this method still does not work for guests in many regions around the world. Also, for bed and breakfasts in North America or Europe, using a service like this is like putting a sign on your front porch saying “We’re Un-Professional Amateurs!” This is not exactly the reputation you want to develop for your website.
You certainly need a professional third party service that is able to collect more than just Visa and Mastercard. You need a service that is able to collect at least 4 major global card types. If you feature online booking on your own website, know that almost all major booking services are able to collect 5-10% deposit for your bookings. But is this enough? No. You should be collecting from 30% to 75% deposit for every booking taken on your own website. There are 2 reasons for this. One, guests who have found your website, and are interested in booking with you, are serious about staying with you. They know that if they’re paying on your website, they’re going to have some personal interaction with you, and their reputation is on the line. Fraud transactions on a hotel’s own website are infrequent. Second, since you know the guest is serious, you want to collect a reasonably high deposit to secure their booking, and eliminate any possibility of problems in the event of a cancellation or no-show. BedBreakfastTraveler.com (Instant World Booking) recommends collecting either 35% or 50% as the optimal deposit for most bed & breakfasts and small hotels.
Instant World Booking is one of the only services that enables you to collect more than 10% deposit at time of booking. In fact, they can enable collection of up to 100% of your bookings at reservation time, effectively enabling you to collect credit cards right online from your own website. Instant World Booking takes this service one step further, offering full no-show and cancellation protection. With this service, you are guaranteed to receive your deposits, even in the event that a guest cancels late or does not show up.
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