Bidroom: The online booking service that wants to outperform Expedia and Booking.com – Middle East & Gulf News
Bidroom is one of the latest Online Travel Agencies (OTA) to enter the international market, offering a twist on the traditional OTA formula. Bidroom’s pitch centers on eliminating commission fees for hoteliers, allowing travelers to benefit from competitive discounts.
Since the advent of the Internet, and mainly around the beginning of the 2000s, online travel agencies began to gain momentum. It has grown exponentially ever since, and the online travel market is expected to bring in $1.091 billion by 2022, registering a CAGR of 11.1% during the forecast period 2016-2022.
AME info spoke with Michael Sols, Public Relations Manager at Bidroom, to learn more about what his company brings to this high-potential market, and the in-store benefits for hoteliers and travelers.
1. Bidroom seeks to differentiate itself from other OTAs by offering a commission-free model. How is Bidroom unique, and can you expand on these points?
Oh, my favourite! Let’s start by comparing Bidroom’s membership model to a standard OTA commission model:
Under our membership model, hotels connected to the platform only pay if we generate for them 15 x the price of membership. Consider this:
In my opinion, the winning formula for our hoteliers is = no commission (more revenue) + membership-based partnership (revenue first – pay later).
2. How does Bidroom’s business model work and how does it generate revenue if it does not charge commissions?
It’s a growth-based business – like Amazon Prime, Netflix or Spotify, which we look forward to.
i) (B2B) Hotels register with Bidroom for a one-time activation fee of €299 per property
ii) (B2B) They pay the membership price according to the size of the hotel (5 levels, from 50 rooms up to +200 rooms) but only after the hotel has received enough revenue
iii) (B2C) Travelers purchase a subscription to book hotels with discounts of up to 25%. 3 packages are available: €3 monthly; €29 per year; 99€ for life
3. Can you tell us more about your company and how it started? How did the idea for Bidroom come about?
Bidroom was founded in 2014 in The Hague, The Netherlands, by Michael Ros (COO) and Casper Knieriem as a response to their hotel prospects who were exhausted by the ever-increasing revenue loss due to commissions their hotel chains were facing. At the same time, both had extensive sales experience and a keen interest in hotel technology, which was a common topic of their conversations with guests.
They found a niche in Software-As-A-Service (SaaS) hotel booking where no big OTA had gone before. Weeks of painstaking calculations had shown that a membership-based platform could work if growth was substantial. We do our best to make this happen. Currently, Bidroom connects over 120,000 hotels from 128 countries with the ambition to reach 1 million active users by 2020.
4. Can you give us some examples of savings that Bidroom users can benefit from?
Sure. Imagine that you are booking a 5* hotel in Barcelona. The price of the reservation could be €400 per night with a hidden commission of 18%. Using our technology, the Bidroom price for the same hotel could be €375 per night with no hidden commission – it must be lower than our competitors because it’s our technology DNA. The lack of commission charges for the hotel is the reason for the discount.
There is the question of the price of membership. I think €3 per month is quite reasonable for a trial. With all packages (€3 per month; €29 per year; €99 for life), the more you book, the more you save, as there is absolutely no limit to the number of bookings you can make as a traveler . Sounds complex, but also exciting, doesn’t it?
5. Bidroom seems to put a lot of emphasis on the interests of the hotelier. How do you balance this with benefits for your customers?
The focus comes from our founder’s deep understanding of the hotel market. That, and the fact that we have 3 former hoteliers from Apollo Hotels on the board that was formed last November.
Customers enjoy guaranteed best hotel prices worldwide with discounts of up to 25% – compared to Booking.com, Expedia, Hotels.com and Agoda.
As our hotel partners avoid abusive commissions, they are eager to offer an additional discount of their choice to our travel community. It is also essential to underline that, since Bidroom is a private platform, all hotels are free to announce the prices of the rooms of their choice without any violation of rate parity (= no public announcement of rates lower than those offered by the OTA which applies the clause).
6. When did you enter the MENA market and what was your experience here? Takeaways and notable trends?
Our main strength lies mainly in the European market. We expanded to the MENA region in 2018 alone and are forming partnerships in the financial sector to fuel growth. We call our users’ profile for the region “Travel Planners” – people aged 33-55+ who visit countries like the United Arab Emirates or Morocco for a particular occasion like leisure (business and leisure) , holidays, birthdays, or honeymoon. In time, our group of MENA travelers will surely grow – we sent our best to the Arabian Travel Market 2019 conference in Dubai for high-level networking.
7. Do you use technologies such as blockchain, or are you studying the possibility?
Soon we will be joined by the right technologically wise person with extensive R&D experience to tackle potential avenues like blockchain. For now, we are not sure about its application for online hotel booking. And even with all the talk in the world, only a few have endeavored to explore Blockchain. Large scale IT support is needed and hoteliers are concerned about perfecting their digital marketing for direct website conversions. There is Casual Hotele, a Spanish chain, which introduced bitcoin payments around March 2019. Let’s see how it goes.