Piffle from Westin and Sheraton

Travel Pixel · 30-12-08

Just had an email from Westin announcing that they are now paying on completed stays instead of at the booking stage. In amongst this rather disappointing announcement there was this gem:

Quote:

To date, your commission has been paid on the booking. Although this practice was unique in the affiliate marketplace, we also found that fraud levels were high and profits were low.

Hardly unique is it?

Thoughts?

morleymouse · 30-12-08

It could be unique for them, most big chains operate in this way on a 'commissionable' model where they pay a commission after that stay.

The other model is the 'merchant model' where a hotel would give you nett rates and then you apply you own markup so you take the money at that time and any extra and above the rate they give you if your own profit.

A lot of big chains prefer the commissionable model as it gives them the control and is safer for them, and thats how they work with most of their distribution channels.

Big OTA's such as alpha work with chains, groups, directs etc on a variety of different models as above which is why good cash flow is needed. A sale you make for a customer traveling next August would be paid to you at the end of next month, we might not see a penny until a month after they come back!

Thoughts? They're trying to make something thats worked offline for them for the past X year work online in a completely different day and age. Chains know direct sales are the cheapest I just dont think they know the best way to acquire them yet

mattg · 31-12-08

Well Westin are saying 'fraud is high and profits are low'.

If that means affiliate is not worthwhile for them it makes sense for them to try and change the mechanic, the alternative being termination I guess. (Of course if the cause of unprofitably is the fraud, then getting rid of the fraudsters would be another approach).

But if affiliate isn't working for them, they have to stop it.

Or if they think they can get a better deal for their business, they're obligated to try it. From a merchant's POV, affiliate is basically a distribution marketplace.

It could of course just be a dumb decision. We all make those.

Viability of the commissionable model would largely depend on the length of the lag between book and pay. (And secondly I guess, the confidence one has in the merchant that the chain of client pays->affiliate is identified->network is paid->affiliate is paid will remain intact, lots of links there, any could break). A raise in commission would help compensate. And are they paying on the whole bill, or just the original booking value?

Dave it does occur to me they are highlighting fraud as a big problem - since that's not coming from you that means the fraudsters are sucking off the profit you are generating for Westin, give them a call and tell them how you feel.

& if it's not going to work for you, work with someone else. That's the other side of the 'marketplace'.