Your Business to Local Community to Country
It’s not just your own business that can be adversely affected by unfair commission fees. Clearly money in the form of high commissions is flowing out of local communities and the wider economy too.
A Simple Example:
Take an area with 20 accommodation providers. Each hotel takes 3 bookings each night at €70 per booking. This would realize a gross income during the year of €1,533,000. If booked via online agencies each charging 15% commission for every booking, the businesses in this local area alone would lose over €229,950 income. That’s €11497 per annum which could be spent in the local community, on upgrading your business or indeed taking on an extra member of staff.
This is a random example, but it serves to illustrate the point rather well. We believe that this is indeed a conservative example for many locations. While your own business directly loses out to hikes in commission fees, so too does your local community in terms of income going back into local jobs and the local economy.
A Cumulative Impact on the National Economy
Clearly, the true effect that this has on real communities depends on each specific set of circumstances, but the owner of a small, independent hotel based in a a country British town admits to regularly paying out almost €2000 per month purely in commission fees. Multiply this figure across a financial year and it soon all adds up – and becomes a tasty amount amount of cash flowing out of local/national economies which is going directly to fill the coffers of a few online booking companies.
An Example
The following is a simple calculation for a sample of just 500 hotels:
Hotels receiving bookings 500
Room nights per day per hotel 2
Total annual bookings 365,000
Average commission per booking €15
Total annual commission €5,475,000!
Of course, this in turn, affects the total income generated within the wider tourism sector and immediately you can see that fairer commission fees will have a positive affect on national economies worldwide too.
