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September 2006

Online Reservations: Top 12 Reasons and Misperceptions

What's in it for you
Myths debunked

Top 12 Reasons to Take Online Reservations

1. Incredible exposure on the industry’s leading travel websites: Over 110 million monthly unique site visitors on,,, and

2. Real-time reservations:

  • Receive instant, real-time, confirmed reservations while you sleep.
  • No need to reply with a confirmation…these reservations are already confirmed.
  • If you can check your email, you can take online reservations with

3. Travelers want to book online: PhoCusWright, Inc. reports that:

  • Online channels are projected to generate 60% of all U.S. travel gross bookings by 2008, moving into a dominant position relative to offline channels.
  • Offline leisure travel bookings will continue to shrink dramatically over the next three years.
  • 64% of all leisure bookings will be made online by 2008, versus 45% in 2005. In 2005, total travel bookings reached $224.4 billion, the second consecutive year of more than 7% annual growth.

TIA agrees:

  • Americans increasingly book travel online: In 2005, for the first time, more trips were booked online than by any other method, according to data released at TravelCom 2006 by the Travel Industry Association of America and D.K. Shifflet & Associates.
  • “24% of travelers who booked accommodation reservations did so online in 2005, up 9% from the year before. Hotel chain websites were used most often to make internet reservations, followed by other online booking services (such as online travel agencies). The largest share of travelers made reservations directly with the property, but this also declined compared to the prior year.”
  • Trips booked online involve significantly higher spending on average. Travelers spend $754 (excluding the cost of transportation) online, $406 offline, and $219 with no advance booking.

4. It’s risk-free:

  • You pay nothing unless a reservation is booked at your property.
  • Once a reservation is booked online, and referral guests will book directly.
  • Chance to upsell guests to a better room on arrival. (Upsell revenue is commission-free.)
  • Not all guests who find you online will book online -- many will contact you directly.
  • If one reservation is booked online at 30%, and a second is booked offline as a result of a traveler finding you through this program, your effective commission is cut in half, to roughly 14% after the 2-3% credit card processing fees are backed out.
  • Forrester Research says 40% of customers who go to an OTA buy directly from a supplier; Feedback Research says that number is 73%.
“I recently got my first booking through Online Reservations. It was for a room that never books, so I listed it to see what would happen. The guests arrived, asked for a tour, and decided to upgrade to one of my Jacuzzi suites. The upgrade earned us another $230; the guests had a great time and took many brochures for their friends. If I didn't have the "book it" feature on, they might not have reserved with us. I think if you have a room that isn't very popular, this is a great way to get it filled; you can always up-sell guests when they arrive.” – Carol Kerivan, Bear Mountain Lodge, Bethlehem, NH

5. Enter inventory when it suits your needs:

  • Display availability for one room.
  • Display availability for all your rooms.
  • Display last-minute availability.
  • Highlight shoulder and off season availability.
  • Focus on Sunday through Thursday and reservations.

6. Fast and convenient payment: deposits reservation income into your bank account within four business days of the guest checking in.

  • No invoices to fill out.
  • No checks to deposit.
  • No credit card processing fees.
  • Best of all, no waiting for your money.

7. Customizable cancellation policy:

  • Properties are still paid on canceled reservations.
  • Charge the first night cost for cancellations 2-30 days before check-in.
  • Charge the full amount for cancellations 0-14 days before check-in.
  • Set your policy based on these parameters.

8. Maintain contact with your guests:

  • For reservations booked online through, and, we provide the guest’s name, billing address, phone number and email address.
  • For reservations booked through Expedia and, we provide the guest’s name and phone.
  • You can – and should – contact your guests prior to arrival.

9. Better exposure on

  • Participating properties with availability are at the top of the city page search results.
  • More search features to highlight bookable properties.
  • Site redesign elements will place even more emphasis on properties that are bookable.

10. Keep up with your competition. Some numbers:

  • Over 6,000 members worldwide.
  • Over 5,500 U.S. and Canadian members.
  • Nearly 1,000 bookable B&Bs.
  • Most hotels, motels and other lodging providers are taking online reservations. They are your competition, too.

11. Grow your overall occupancy:

  • One member received five confirmed reservations in a 24-hour period.
  • Another member received 76 confirmed reservations over a three-month period.
  • Another member experienced a 300% increase in online reservations in July when her property went live on Expedia and

12. PMS Integration:
With RezOvation GT property management software, you can manage all your property’s room inventory in one convenient location.

  • Your website’s RezOvation booking engine
  • Inventory on,, and through the Online Reservations program
  • Webervations


Top 12 Misperceptions about Taking Online Reservations

1. It’s too expensive:
A bird in the hand is worth two in the bush! When you invest in pay-per-click advertising, you’re spending in the hope of getting guests; when you add inventory to the online reservation system, you get comparable exposure but pay only when you actually get a reservation. For example:

  • The combined average CPC on Yahoo for the top four advertisers in Napa, Austin, Boston, Key West, Nashville, and Fredericksburg is $1.03 per click.
  • If these advertisers convert one of every 100 site visitors to a guest, their cost of acquisition is $103 per guest.
  • If the average night stay is $150, and the average stay is two nights for $300, that $103 cost of guest acquisition is like paying a 30% commission.
  • You control the online inventory, so you add only rooms you’re unlikely to sell yourself.
  • You’re not losing 30%, you’re gaining 70%!

Other ways the commission will effectively be lowered:

  • Many guests will be first-time guests and will contact you directly when they return or refer a friend.
  • Many guests will book “offline” after finding your property online, in which case, no commission is paid.

2. I’m afraid of double bookings:

  • Double bookings are in your control.
  • The system operates in real time, so when you “black out” a date, that availability is immediately removed from inventory.
  • Takes roughly one minute to log in and black out a room.
  • Show availability during times when you expect to have some empty rooms, not when you expect to be full.
  • Show generic room types rather than unique rooms, and gain greater flexibility in managing your inventory.

3. I already manage multiple systems…no mas!

  • The time spent managing this system is well worth the exposure received.
  • Availability calendars like Webervations and Availability Online provide little or no additional exposure for your B&B.
  • Online Reservations opens your doors to over 100 million unique monthly site visitors.
  • Taking a reservation over the phone takes time!
  • With RezOvation GT, and eventually RezOvation Desktop, you can manage all inventory from one convenient location.

4. I want to maintain the personal touch:

  • We provide each guest’s name and phone number, and usually their address, email, and cell phone number as well. In other words, you can easily contact your guests.
  • You may want to talk to potential guests, but they may not want to talk to you.
  • Without online reservations, you are missing one in four (or more) potential reservations.

5. I’m already on Expedia through my GDS provider. Online Reservations is better because on the GDS, you have:

  • Lower page placement.
  • Limited or no photos.
  • Only get the guest’s name and check in/out dates.
  • Higher cancellation rate.
  • Difficult to change property information.
  • Similar cost.
  • Eventually GDS properties will be removed from Expedia and

6. I’m not computer savvy!

  • Your Net Rate Account Manager will personally train you on the phone and will be available Monday-Friday, 8-5 CST to answer your questions.
  • Nearly 1,000 B&Bs already use the program.
  • The system consists of essentially four screens.

7. I already take online reservations through Webervations!

  • No additional traffic/exposure generated.
  • Not confirmed real-time reservations.
  • Useful for capturing guests from your website, but not a new business generator.

8. I only pay 5%-10% for online bookings from another service.

  • Typically what you pay for bookings from your own website.
  • A valuable tool to capture business on your website, not a marketing tool providing access to millions of potential guests.
  • Don’t forget the cost of driving business to your own website.

9. Most online reservations end up canceling!

  • Contrary to popular belief, this is rarely the case.
  • Since guests are paying in full for reservation, most reservations are not canceled.
  • Although it’s too early for comprehensive figures, we’ve seen a cancellation rate around 10%.

10. I don’t want to give out my banking account number.
Here’s what the U.S. Department of Treasury says: “Electronic Funds Transfer (EFT) provides for electronic payments and collections. EFT is safe, secure, efficient, and less expensive than paper check payments and collections.” If EFT absolutely will not work for you, no problem. We can you mail a check.

11. If I do online reservations, guests will no longer call to book.

  • As a member of, we still link to your website and email address, and we display your phone numbers. This gives guests one more way to book a room at your property.
  • If you are not showing availability, we show a prominent message encouraging guests contact you directly.
  • Remember, Forrester Research says 40% of customers who go to an OTA buy directly from a supplier; Feedback Research says that number is 73%.

12. Online reservations are just a fad!

  • So are computers.
  • So is the Internet.
  • So is having your own website.
  • So are toll-free phone numbers.
  • So is email.

PhoCusWright, Inc. reports that “online channels are projected to generate 60% of all U.S. travel gross bookings by 2008, moving into a dominant position relative to offline channels.”

Are you as busy as you want to be?

This Month's Sponsor


Special offer!

Sign up for Online Reservations by October 27, and you'll get a free upgrade to the next membership level or a free secondary city listing, valid through the end of your membership. For details, email us or call 800-GO-B-AND-B, extension 4.


Internet Intensives, RezOvation and Expedia, Inc. are hitting the road to bring you comprehensive information about Internet marketing, online reservations, yield management, and property management software. Please join us for these workshops and for an Innkeepers' Appreciation Luncheon. Read more...

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