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.

Check out more of our controversial topics and advice at our blog.  We’ll lead you to the most effective and low-cost solutions for marketing your property.

I just read the comment that was posted to our previous Blog entry, suggesting that Instant Online Booking is not for everyone.  While this is an important topic that will be addressed in future blog posts, I think it is useful to comment at this time.

Let me emphasize that Instant Online Booking IS for everybody.  There are many arguments I’ve heard to not using instant booking — I only have a few rooms, I can’t check availability daily, I can better allocate my rooms otherwise, etc.

Know that Instant Online Booking can be used by everybody, and adapted to your own specific needs and circumstances.  Unless you can say that you are willing to pass by over 80% of the online travelers who consider booking your property, either on your own website, or a service like BedBreakfastTraveler.com, then instant online booking is for you.  For example, if you only have a few rooms to play with, putting one or two rooms in online availability is always better than not having any.  If you don’t have time to monitor all your availability online every day, then only put a subset of your availability online.  This will help avoid double-bookings.

This concept is so important, you need to understand it.  The number one goal with online bed and breakfast or hotel marketing is to maximize the number of online guests considering your property.  By not offering at least some instant availability for booking, the vast majority of guests who find you online will inevitably pass you by and book elsewhere.

This is Online Booking 101, and if you use it properly, online booking is for you.  Don’t be fooled by the old way of working.  We are entering a new world of online tourism technology, and the whole paradigm for online booking is evolving in exciting new ways.

Please look forward to our future blog posts on the important topic of Instant Online Booking.

I have visited many bed and breakfasts around the world, and have had the opportunity to speak with many innkeepers about their marketing efforts.  Not that there’s any competition from one region to the next, but I’ve seen a definite advancement in Europe in the use of online marketing techniques over the U.S., or North America for that matter.  Of course there are no favorites in the online marketing game, but I’m seeing is that innkeepers in Europe have been willing to embrace internet technology more openly than in North America.

For North America’s $3.5 billion bed and breakfast industry, there is a tremendous opportunity.  True, the number of B&Bs in the U.S. has increased 20-fold in the last twenty years.  But the opportunity for growth in marketing capability, especially on the internet, is overwhelming.  European bed and breakfast owners have been more than willing to take risks, and embrace online marketing technology.  While 95% of all U.S. B&Bs have their own website domain, only a small percentage take advantage of the latest online booking capabilities.  In Europe, a much smaller percentage of B&B owners have their own domains.  But, they have taken advantage of using regional and global online reservation services.  They have begun to use marketing through subdomains offered from many ISPs like AOL, and they are in the lead with regard to offering online booking directly on their own websites (where they own their own domains). 

European B&B’s are hungry to take part in the growth in travel and tourism that their countries have experienced in recent years, particularly in Eastern Europe.  To share in this growth, they are most interested in exploring any and all ideas about enhancing their marketing strategies online.  Let’s take for example the concept of online booking.  In today’s online B&B marketing world, online booking means taking advantage of a service provider that offers online availability calendar capability and instant confirmed bookings 24/7.

However, let’s recall that a significant portion of online travel industry marketing still reverts to 1980’s style technology.  This is why most bed and breakfasts in the U.S. that grew up since this period still use online booking services that do NOT offer instant confirmation or online availability checks.  To be clear, online booking does not include any service that doesn’t offer the capability to maintain availability online, offer real-time availability checks to guests, and instant confirmed reservations 24/7.  Some services pretend to offer real online booking, and are used by many B&Bs in the U.S.  But what these services offer is really just a glorified form of request-service.  Some offer the guise of instant confirmation, only to prompt the innkeeper to check their availability within 24 hours to provide a real confirmation.  This is not real-time instant confirmation.   This is just a step above email or telephone.

Bed and Breakfast owners in Europe have realized that travelers searching for reservations on the internet do so precisely because they can book in real-time.  Online purchases are frequently quick and impulsive.  Travelers booking online demand instant gratification.  Because of this they have embraced much of the latest online technology offered for such purposes, including online credit card processing.  It seems like we are now in the perfect environment for American innkeepers to play catch-up, and to embrace the latest online technology that can now lead to increased profits.  Many innkeepers have convinced themselves that their guests don’t want them to delve into new technologies, and expect them to stay in the backward days of manual bookkeeping.  This is a fallacy that some have repeated to themselves, only to sacrifice profits.  Travelers are staying closer to home, gas prices are up, Euro currency rates are up.  There is a big opportunity for B&Bs and small hotels and hostels of all kinds to gain a bigger slice of the tourism pie.

For the foreseeable future, I look forward to seeing how Europe’s bed and breakfasts continue to innovate and use the internet to advance their businesses.   But, equally, I look to see how North American B&Bs can take advantage of the huge opportunity lying before them.