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Agoda Dubbed ‘Hotel California’ in Asia as Hotel Suppliers Say They Can Never Leave

Raini Hamdi
Agoda Dubbed ‘Hotel California’ in Asia as Hotel Suppliers Say They Can Never Leave

In its recent management shakeup, Booking Holdings has said it is seeking to drive “more alignment” across its brands. Throughout Asia, there is a chorus of voices that wishes that Booking.com and its sister Agoda were more closely aligned — in ethos and ways of working.

Among them are homestay owners and hoteliers who have disconnected from Agoda, yet say the Asian online travel agency still hangs on to them, like a girlfriend or boyfriend that refuses to leave. That’s because although they no longer want to work with Agoda, Agoda still lists their properties and, if these properties have a contract with Booking.com, is still able to book them.

Agoda is thus being dubbed “Hotel California” privately by some suppliers, thanks to the line from the Eagles hit song, “You can check out anytime you like, But you can never leave.”

But Why Leave?

This all begs the question: Why wouldn’t homestays and hotels work with two sisters instead of one, which would expand their client reach? And why it is that Agoda is the one that seems to be less favored in its own Asian region than its sister of European roots?

Most homestays and hotels interviewed for this article declined to speak openly, but discussions on “How can I remove my property from Agoda?” — on Booking.com Partner Hub itself — or in a closed Airbnb Professional Hosts Group on Facebook, to which Skift was invited, raise a few points.

When approached by Skift, Agoda says suppliers are free to add or remove inventory and that it puts significant effort into delivering best-in-class experience for customers.

Homeowners and hotels, however, say they resent being forced to work with a platform against their will. Beyond that overarching sentiment, however, there are real issues.

A big one for homeowners is Agoda’s inability to deliver customer service to clients. An owner in Adelaide, Australia, for example, wrote about his agony of trying to reach Agoda for the guest contact details, so that he could send specific information on how to get to the country retreat, and how to find the key to the home. He said Agoda gave him “no efficient means” to do that; what’s more, he found out that guests “have to tick a box at the end of their booking process, that they accept they will receive no customer service!!!” The owner said the platform was not a good fit to support his business, which is customer service-driven.

Agoda’s global director of PR, Allison Wright, however, said the Agoda platform does not have such a box. “Other sites might, but not Agoda. We have a very easy system to use to allow our customers and hosts to communicate,” said Wright.

Thu Nguyen, founder of Christina’s, a rising homeshare and community tourism operator in Vietnam, told Skift that unlike hotels, communications with guests is the key for homeshare operators to provide a hassle-free experience, since there are questions on directions and local recommendations, among others.

“A guest makes a booking and does not even know that the owner is trying not to be on Agoda. This results in a gap of expectations and communications. Operationally, it is impossible for owners to contact the Agoda guest to prevent him from getting lost on the way to the homestay, or if he has an emergency issue.

“Guests only know they book on Agoda. Owners only know that they are from Booking.com,” Nguyen said. “Only when the guests arrive that the owners realize it’s an Agoda booking and some would even tell them they do not have any bookings from Agoda. So all this creates all sorts of frustrations, with owners ending up with disgruntled guests and a bad review.”

Not Two Peas in the Same Pod

Nguyen, who is leading a boycott against Agoda, finds Booking.com “a lot more straightforward” than sister Agoda. “We price the way we want and Booking sends us guests and allows us to communicate with them,” said Nguyen.

“Perhaps the team at Booking.com is completely different from Agoda and is allowed to operate the way they want to, despite having inventory sharing with Agoda,” he mused.

Booking.com generates 30 to 40 percent of Christina’s traffic, said Nguyen. This is why if a way to completely delist from Agoda is to sever the contract with Booking.com, no one will do it, he said.

Agoda itself provides some 20 to 30 percent of traffic to owners in general, he believes. “It’s hard for a small business to lose 20 to 30 percent of distribution without knowing if other channels can make up for it,” said Nguyen.

Christina’s delisted from Agoda over a year ago when it discovered what Nguyen described as “predatory” tactics. His first taste of this was when Christina’s took over a property that Agoda had signed up in early 2016. Nguyen alleged Agoda had threatened him to give it the lowest price, or else Agoda would change the properties’ prices itself.

What also riled him was an “up to 80 percent off” deal which Christina’s personally experienced. Agoda achieved this by marking up the price by 400 percent, then discounting by 80 percent to bring it back to its original price, he said.

It’s an old sales trick, but in tourism, Nguyen said the repercussions are far-reaching. The guest believes he’s getting a $250 homestay a night with concierge, pool, may be fancy breakfast, when all he’s got is a normal $50 homestay. He puts his disappointment on the owner, who never imagines his home is anywhere near $250 a night.

A random check on July 11 showed Agoda giving an “85 percent off today” for the Silk Path Grand Resort & Spa Sapa, Vietnam, listing the original price as $518 (S$702) and slashing that to $77 (S$105). Booking.com’s price was $103 and clearly marking that this included taxes and charges.

But a host in Thailand in the closed Facebook group argued that most people could use their judgement when such inflated deals are offered. For him, as long as he’s getting the amount he needed, Agoda could show whatever inflated “discount” it wanted, although he agreed ideally this should be left to the host to manage.

Undercutting Other OTAs

However, there are also allegations that Agoda is undercutting other OTAs. “For us Agoda have [sic] become much worse in recent months. Firstly by underperforming to the point of insignificance and secondly messing about with rates,” wrote Fluff on Booking.com Partner Hub.

“They always claim they are price-matching but have actually been undercutting other OTAs by very large margins, applying their ‘discount vouchers’ to the listing without any permission.”

A sales director for a huge resort south of Manila, speaking on the condition of anonymity, noticed a disparity in Agoda rates compared with other OTAs.

“They are buying from our wholesalers, like Ctrip,” she asserted, although Agoda’s Wright said, “We do not source inventory from Ctrip.”

As well, the source noted that Agoda’s bookings were coming from its private sales open only to its members, rather than retail sales, i.e., rates published on its website. “For retail, we give them 17 percent off [room rates], for private sales, 20 percent off. They do everything so they can get a bigger commission.”

So the resort “closed Agoda” and ended the partnership with Ctrip.

She said Ctrip is trying to re-establish ties with the property, “but we will be adding a clause in our agreement with them that if we ever find out they are selling rooms to OTAs, we will automatically cancel our agreement.”

A check on Agoda showed, however, the resort is still listed on its site. “We closed them on our end and though the extranet,” said the source, “but we are still there. Their logic is that their system detects availability and lower rates….But we don’t accept the bookings anymore if they come to the hotel.”

Another sales director who handles several properties in the Philippines said they remain with Agoda, but “we are just on constant guarding and you have to call their attention each time” when a disparity in room rates is discovered.

“Their coupon rate is on and off. They will do midnight deals, so other OTAs will match it. And when you call their attention, they will point at other OTAs which match their rates,” he said.

Nevertheless, Christine U. Ibarreta, president of the Hotel Sales and Marketing Association in the Philippines, pointed out that despite some difficulties experienced with Agoda, many properties continued to stay with the travel booking site. “They have a wide network,” she noted, and for a number of hotels and resorts, 10-20 percent of their sales are driven by Agoda bookings.

Agoda’s Response

When asked what does it take to get off Agoda completely, Agoda’s Wright, told Skift, “Accommodation partners have full flexibility to add or remove inventory, show availability and set their prices on Agoda.”

She added, “We do also source inventory through third-party supply to enhance the accommodation choices for Agoda customers. In such circumstances, the accommodation partner would need to control their listing with the third party who supplies Agoda the rates and availability.”

On “up to 80 percent off” tactics, she said, “We are constantly optimizing the consumer experience on our website and mobile apps, in an ongoing effort to deliver a best-in-class experience for our customers. We test many iterations of content as part of this optimization process to ensure that the information displayed to users is relevant to their booking experience.

“Prices and availability are set by the accommodation provider, so all prices Agoda shows, including crossed out rates, are real rates that customers could pay for that property. We put significant effort, through massive investment in our technology, to help fulfill our promise to find and offer customers the best prices available.”

Homeshare operator Nguyen hopes that OTAs will start respecting their users with more honest marketing schemes, which prevents a mismatch of expectations and problems for operators to solve.

“If the operators run out of business, OTAs’ business will be reduced. If owners band together and/or create their own distribution to stand up against abuse, then eventually OTAs will have no value,” he said.

It appears that the biggest alignment that is needed is still that between OTAs and suppliers.

– Maria Stella F. Arnaldo, Skift’s contributor based in Manila, contributed to this article.

– Updates have been made to this story to include Agoda’s comments that it does not have a box that gives an option that says guests will receive no customer service, and that it does not source inventory from Ctrip.

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