Bidroom, the Dutch startup focused on revolutionizing the hotel booking business model, is changing the game by accepting no commission from hotels and, in turn, giving travelers membership opportunities to enjoy discounts for hotels.
"The world of hotel bookings is not honest or transparent," says Michael Ros, Co-founder of Bidroom.
His claim isn't untrue: the UK's competition watchdog recently discovered that several online travel companies were breaking consumer protection law through common questionable practices, such as altering search results to promote hotels that pay the most commission, pressure selling, false discount claims, and hidden charges.
Dutch startup Bidroom hopes to take the industry on by flipping the standard business model on its head.
It takes zero commission from hotels and is free for them to list. Instead of charging hotels, Bidroom asks them to pass discounts on room prices onto guests directly. It basically works by getting hotels in the system to bid for a guest, offering dynamic pricing based on the hotel's current capacity.
By way of comparison, companies like Booking and Expedia are based on taking commission.
"They force hotels to offer a lower price on their own websites, so if it's £100 on Booking they can't have a lower price on the hotel website. But the booking on Booking.com brings the hotel £80-85 versus the full £100," Ros explains.
Bidroom's prices are on average 11-12 percent cheaper than those on Booking and Expedia, the company says. A comparison of hotels conducted by Techworld using the same area and dates across Bidroom, Expedia and Booking backs this claim up.
"The margins these companies take from hotels are ridiculous. We're standing for more transparency in the industry and I think it's really needed. We have a different business model to the whole industry," Ros says.
There is just one catch: to access the discounted offers, customers have to buy a one-year subscription costing £49 (or £25 for Visa card owners), though there are free trial options available from one to six months.
"We see an average saving per reservation of around £44, so you get a return on your membership immediately," Ros says.
However, he admits that the initial friction of having to get people to sign up - and part with their precious card details - is a challenge. He's confident they can be successful though: they've already got 500,000 members.
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