Innkeeper Forums: Gift Certificate Commission

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We recently received this question from a member innkeeper who is not yet participating in our gift certificate program. Log in to the Innkeeper Forum and share your thoughts! Click here to read the complete thread.

Hello ... I am a member of BedandBreakfast.com, but I am wondering why your commission is so high for gift certificates. Typically, we are used to paying 10% commission, and I just don't understand why your organization feels 15% is fair. Can you explain?

(Signed by the innkeeper of a luxury inn)

Our response:

Thank you so much for giving us the opportunity to answer this question. The short answer is that as always, you get what you pay for. You have a top-rated, award-winning, gorgeous luxury property, and your rates reflect that. After all, it costs you a lot of money to offer guests the finest in décor, amenities, service, etc. etc.

Similarly, BedandBreakfast.com uses the additional income gained from the higher commission to promote our gift certificate program far more widely than anyone else in our industry. Our gift cards are currently promoting the B&B industry in CVS/pharmacy, Brooks/Eckerd, Office Depot, Costco, Wal-Mart – 15,000 retail locations at present, rising to 20,000 in a few months. We have to pay most of the 15% commission to those companies, but feel that it’s totally worth it for the additional exposure. Although online purchasing is getting bigger every day, millions of people shop in stores every day, and retail gift cards are a rapidly growing market segment. We are proud to offer the industry the branding and exposure to entice more people into trying a B&B getaway. Estimates indicate that only 3% of U.S. travelers have ever stayed at a B&B --- many people have no idea that properties like yours even exist – they think that staying at a B&B or inn still means sharing a bath, no privacy, etc. etc.

We are also making a big push to get more exposure in magazines and on TV. Last year, our gift certificates were selected by Real Simple magazine at a top gift; we currently have deals in place for promotions with Country Living, Budget Travel, Sunset, and are working on several more. BedandBreakfast.com Gift Certificates were just featured on Wheel of Fortune (click here to see the video), and we are doing a week-long promotion with them in the fall.

We also invest a tremendous amount of time and money in making the online buying process a great experience for the consumer, as you can see from the comments here. They can select from 24 different designs and get them by free FedEx or free instant email. We hope to offer the option of letting consumers upload their own photos to create the ultimate in a personalized gift certificate.

We welcome your participation in this program; remember, if you try it and decide you want to drop out, just let us know. Don’t hesitate to contact us with any questions or concerns.

Regards,
Sandy Soule

P.S. Please click here for more information about welcoming and also selling BedandBreakfast.com Gift Cards and Certificates.

Log in to the Innkeeper Forum and let us know your thoughts!
 

Travel Trends

Summer travel being booked in advance: “The summer travel season is in full swing, and nearly every leading indicator points to tighter capacity and higher prices as more people are taking to the roads and skies than in recent years. According to two recent separate and independent surveys of travelers and tour operators, many travelers are now more likely to book their trip activities in advance than they were several years ago. Approximately half (47%) of the respondents to an independent survey conducted by eVOC Insights reported advance bookings through their own website or through an internet distribution partner like Expedia, Travelocity or Viator.com were 'somewhat' or 'much' higher than in recent years. This trend is also becoming more apparent in overseas markets, where online research and booking patterns are growing faster than the highly penetrated U.S. rates.

"When asked why they research destination activities and/or book tickets or passes in advance of travel, 'saving time' (54%) and 'saving money by trying to find the best deal' (54%) tied as the number one reasons cited by vacation travelers for doing so. These were followed most closely by:

• 'so I can budget accordingly' (52%)
• 'so I don’t miss out on interesting activities that I otherwise may not find out about at the destination' (48%)
• 'so I know my itinerary before I go' (46%)
• 'to avoid waiting in long lines for tickets or admission at the destination' (45%)”

 
Summer travel strong despite high prices: "While travelers will face peak season pricing this summer, year-over-year increases are not expected to be as dramatic as 2006, when airfares alone rose about 10%, according to Expedia.com's quarterly "Expedia Travel Trendwatch."

“In addition, despite rising airline ticket prices, 60% of U.S. adults plan to fly as much this summer as they did last summer. 86% of U.S. adults who plan to vacation this summer are somewhat to very likely to consider an 'off-the-beaten-path' destination. Finally, busy work schedules may be pushing employed adults to consider mixing business and leisure travel.

“Popular destinations like New York City, Hawaii, Washington, D.C., Boston, Orlando and Vancouver are seeing ticket price reductions of 4% to 7%, likely due to capacity increases. On the flip side, Miami, New Orleans and Toronto are seeing increases of 5% to 8%, likely due to increased demand.

“Internationally, Paris, Amsterdam and Athens are trending higher, with increases of 5% to 10%. High-volume hubs like London and Frankfurt are seeing decreases of 11% and 9%, respectively, as airlines have lowered fares to make these locations more attractive given the unfavorable exchange rate for American travelers.

“The same survey found that 83% of business travelers would be somewhat to very likely to extend a business trip by a few days for leisure purposes. In fact, 27% said they would be very likely to do so. In addition, 57% said they plan to invite a friend or family member to join them on a future business trip.”

Trend toward shorter trips means more dollars spent online: "According to PhoCusWright, long weekend trips are now the most popular type of leisure travel. Leisure travelers take more than twice as many long weekend trips than they do week-long vacations in a year. Leisure travel is defined less by a prescribed number of weeks off, and more by the opportunity to carve out chunks of available time. The result is that travelers are taking a series of smaller vacations, and buying record amounts of travel products and services on the Internet, according to The PhoCusWright Consumer Travel Trends Survey Ninth Edition published this week.

"The smaller the financial investment and distance traveled for a trip, the more inclined travelers are to purchase their travel online. In fact, $6 out of every $10 spent on weekend travel was purchased online versus less than $3 out of every $10 for week-long vacation travel.

"Other key findings from survey:

• The lack of available time to vacation also extends to vacation planning as well. Almost two thirds of online travelers report that general search engines, like Google and Yahoo!, not only influence where they purchase their travel, but what travel they purchase.
• The lack of designated leisure time is forcing business travelers to be more creative at when and how they vacation, as almost four in 10 business travelers extend their business trips to include a leisure component.
• A website’s visual features are important in influencing where leisure travel is purchased. More than seven in 10 online travelers indicated that it is a website’s use of video, pictures and online maps that most influence the method of purchase for leisure travel.”

Kayak UK adds hotel search: "Kayak has added a hotel search to the UK site, following the successful launch of Kayak.co.uk’s flight search and Buzz product earlier this year. UK travelers will now have access to online travel’s most comprehensive database of hotels.

"As with air, Kayak’s MultiBook™ technology allows travelers to choose where to make their purchase: directly from the hotel, from an online travel agency or through a consolidator. To enhance the quality of its information, Kayak offers an ‘accuracy promise’ to ensure that every hotel is presented on the site with correct and trustworthy information. Kayak.co.uk also uses a mash-up with Google Earth to integrate search results so consumers can see the exact location of any hotel. Users can then check the satellite image to see exactly how close they really are to the beach or airport, or use the ‘custom address’ link to choose a minimal distance from a specific address or location. B&Bs that participate in the BedandBreakfast.com Online Reservations program (like the Hillview Country Inn below) are bookable on Kayak.com.


UK online sales rise, driven by travel: “UK online sales tripled from 2002 to 2006, and grew nearly 13 times faster than the overall retail sector in 2006. UK online shoppers outspend even American consumers. eMarketer estimates the average UK spend in 2006 was $2,171, compared with $1,831 in the United States.

"UK retail e-commerce sales are estimated to reach $51.8 billion (£28.1 billion) in 2011, up from $21.6 billion (£10.9 billion) in 2006, according to Verdict Research. Looking at B2C e-commerce overall, the firm counted travel as the biggest online sector, followed by electronic products and apparel."

Europeans look online for travel: "comScore recently announced the results of a study of the European online travel industry, revealing that 108.6 million Europeans - or half of the total European online population aged 15 and older - visited a travel related site during March 2007, an increase in traffic of 6% versus March 2006.

"According to comScore, Expedia Inc. led the European travel category with 18.5 million European unique visitors aged 15 and older during March. The second most-visited European travel site was ViaMichelin, with 13.5 million European unique visitors, followed by the TUI Group’s 12.5 million European unique visitors.“

European online travel sales on the rise: “Online travel sales increased by as much as 31% from 2005 to 2006 and reached EUR 38.3 billion in the European market in 2006 - or 15% of the market (up from 12% in 2005). A further increase of about 22% during 2007 to about EUR 46.8 billion may be expected (18% of the market).”

China to become third biggest travel destination: China is likely to replace the United States as the world's third most popular tourism destination next year, a United Nations World Tourism Organization (UNWTO) official said. At present, China ranks fourth, after France, Spain and the United States. Last year, China accounted for 5.8% of the global tourism market, a growth of 0.3% compared with two years ago.”

Silver surfers close to becoming largest group online: “According to new research data, UK Internet users aged 55+, the so-called silver surfers, are set to overtake 35-44 year olds as the demographic age group with the largest representation online. And travel websites are among the most popular among this older age group. Those aged 55+ accounted for 22% of UK visits to all categories of websites in the four weeks to May 12, up 54% since 2005 and 40% since 2006. This compares to 23.5% of Internet visits from 35-44 year olds.”

Tripadvisor says its reviews are legit: “Tripadvisor.com has defended the integrity of its hotel reviews following suggestions at a conference in May that fraudulent reviews are still being published. Senior executive Marc Charron claimed that the site is getting more sophisticated at detecting false reviews and that its readers are savvy enough to ignore bogus entries. As the largest website for user hotel reviews, the site receives around 1,400 reviews a day, and in the past has been criticized for allowing reviews to be published that are not posted by genuine guests.”

Half of Online Users Create or Read UGC: JupiterResearch reports that in April, half of all online users either created user-generated content (UGC) or read items posted by others. In a study titled "User-Generated Content: Strategies for Media Sites," JupiterResearch reports that UGC is now a mainstream activity for millions of consumers. Three-quarters of users 18 to 25 are reading or writing UGC. A third of those over age 55 are participating in UGC as well.

Road Warriors more affluent, spend more online: “Scarborough Research finds that people who spend the most time on the road are more tech savvy than the average consumer, have a wide variety of personal and household technologies, and value portability. They are 17% more likely than the average consumer to have a cell phone and 40% more likely to have a PDA in their household.

“The country's top road travelers are 48% more likely than the average consumer to have spent $1,000 or more online during the past year. They are more affluent (35% more likely to have an annual household income of $100,000+), and more educated (20% more likely to have a college degree or advanced degree).”

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