Come & Go Vietnam Blog

As we all know, the hotel business is a very competitive one. Go to Agoda and search for a 4* hotel in, say, Bangkok, Hoi An, or Siem Reap, and you’ll be given dozens, hundreds even, of options, most of them fairly interchangeable in terms of quality, facilities & rates.

As competing on rate alone is a recipe for disaster, many hotels offer an increasingly diverse range of value-added benefits to attract customers – free wifi, iPod docks, welcome drinks & the like are all attractive to guests, with the added advantage of costing the hotel very little. But there is one frequently offered benefit, of which hotels always seem curiously proud, that, for me at least, defies explanation, and that benefit is the turn-down service.

If you’ve never been turned down before, it’s pretty simple – some time in the early evening, while you’re out having dinner or carousing in the local taverns, the housekeeping staff sneak into your room Ninja-style and…wait for it…pull back the corner of the blanket or duvet, thus making it easier for you to get into bed on your return. Fantastic eh? Some hotels gild the lily a bit by leaving chocolates on the pillows or, in one hotel I stayed in recently, leaving an ornate paper scroll with a bedtime story on it on the bed (personally I’d rather have seen the time spent writing, printing and distributing said bedtime story devoted to teaching the chef how to cook bacon properly, but that’s just me) but the duvet bit is the essential part. Some hotels even offer the turn-down service as an optional extra – yes, you can actually call reception and ask someone to come & turn down the duvet for you. I think I’d feel less ashamed calling reception & asking them to wipe my bum for me.

Now, I’m one of the laziest chaps ever to check into a hotel, and I always enjoy the experience as it means someone else has to clean up, make the bed and cook my breakfast. And if I’m staying in a hotel it usually means I’m either out having meetings, standing on my feet at a trade show all day, sightseeing/travelling, or out enjoying the local nightlife, and so when I return to my room I’m either jetlagged, tired, drunk or a combination of all three.

But never, in all my years of hotel-staying, have I been so exhausted or inebriated that I couldn’t even pull the duvet back to get into bed. But I was once so drunk I failed to notice the complimentary chocolate on my pillow, and woke up with it stuck in my hair. Maybe that’s a benefit too.

That seems to be the gist of this article in today’s Daily Telegraph, claiming that online hotel rate parity is tantamount to price fixing, and that it is currently under investigation by the Office of Fair Trading.

For the uninitiated, rate parity is a pretty simple concept – it means that all websites offering a rate for a particular hotel on a particular date should be selling rooms at exactly the same rate. For example, if I want to book a room at the Ritz Hotel on 23 May for a night, and I search for a rate, then that rate will be $250 whether I’m looking at Expedia, Agoda, Booking.com or the hotel’s own website.

Rate parity is (or was when I was working as a hotelier) driven more by the online booking channels than the hotels themselves, because if website B sells a hotel room cheaper than website A, website A is logically going to lose out.

But the problem – for the hotels at least – is that online booking channels don’t offer the same parity in terms of the fees they charge. Some charge as much as 25-30% of the room rate, others as little as 5-10%, others a flat per-booking fee. So if website A is marking up at 30%, it will need a much lower rate from the hotel than website B, which only marks up at 10%. Get it? This has even led to situations where booking site A ends up selling rooms to booking site B, as it is getting a lower rate from the hotel! Then of course there’s the hotel’s own website, where bookings should cost the hotel a much lower fee than any of the online websites.

And this is the reason why hotels themselves prevent online booking sites offering big discounts. Let’s say I’m a hotelier and I want to sell a room for $200 per night. To achieve rate parity for online booking site A, which marks up at 25%, I need to offer them the room at $160. Whereas on my own website, where I only pay my booking engine provider a flat fee of $5 per booking, I’m basically getting $195 for that room – more if the booking is for several nights. So if booking site A decides they want to start discounting, they could effectively undercut my own website by as much as $30 per night.

By stopping the website from doing this, am I engaging in price-fixing? No, I’m just protecting my room rate and my revenue, and trying to channel more business through my own website, which is, or at least should, be the name of the game for web-savvy hotels these days.

Hotels can be accused of many dodgy practices but I don’t think this is one of them – for me the blame lies with greedy online booking sites asking for unreasonably low rates so they can apply markups of 30% or more.

Here at Come & Go Vietnam we love Tripadvisor. It’s a great forum for us to share advice on travel to Vietnam (and thus position ourselves as Vietnam experts), and it also provides invaluable free market research on what kinds of product visitors to Vietnam are looking for, and what those who have already visited thought about their experience.

One thing Tripadvisor doesn’t allow is self-promotion or advertising, so tour operators like myself can only go on there to give advice, and hope that our mere presence on the forums as local experts indirectly generates some business. However, the Vietnam forum in particular, as well as the Vietnam hotel reviews area, is notorious for local tour operators & hotels (most of them from Hanoi) either posing as tourists or just blatantly plugging their products – as Tripadvisor relies on its users to report such acts, these acts of self-promotion can often remain visible for several hours, though as forum users are vehemently opposed to advertising, it’s a pretty pointless thing to do.

Forum touts are generally easy to spot, displaying the following characteristics:

• Misspelt foreign names (eg “Sipelius”) and locations (eg “Malaisia”)
• Only 1 forum contribution to their name, rather than a solid track record of helpful posts
• Use of “Vinglish” – a style of English unique to Vietnamese English speakers. Look out for missing plural “S” (eg “Cheer!”), or final “D” (eg “I am very surprise”); final “L”‘s converted to “N”s (eg “Seoun” instead of “Seoul”); and the dreaded ellipses at the end of lists (eg “I go to Vietnam, Cambodia,…”)

One Hanoi hotel has recently pushed the boat WAY out in a cackhanded attempt to run some kind of social media campaign on Tripadvisor. The right way for a hotel to do this is to provide helpful information about the destination in which they are located – after all, if a hotel takes the time to post impartial and helpful advice on a travel forum, it follows that the hotel staff are in general friendly and helpful people.

The WRONG way to do it goes something like this:

1. Post dozens and dozens of fake reviews of your hotel in an attempt to bump your hotel up the local rankings. Further research shows that many of these fake reviews are copied & pasted from genuine reviews of hotels in other parts of the world.

2. When the balloon goes up and your ruse is spotted by Tripadvisor forum users, place fake postings on the forum claiming to be from guests who have stayed at the hotel defending the hotel’s honour, provoking guffaws of incredulity from genuine travellers.

The end result? Well, bags of free publicity for sure, but Brendan Behan’s famous maxim about there being no such thing as bad publicity doesn’t apply in hospitality, where trust is paramount.

This whole sorry incident does call into question the credibility of Tripadvisor’s reviews – this hotel was caught out because they weren’t smart enough to cheat the system, but there are plenty of people out there who are smart enough, and one has to wonder how many of them are writing hotel reviews at this very minute!

The solution? Take Tripadvisor hotel ratings with a pinch of salt – after all, anyone can write a hotel review on the site. Look instead at the ratings on booking sites like Agoda, where you can only rate a hotel if you have actually stayed there. The reviews may be less numerous, but they are 99.9% guaranteed to be genuine.

And if you’re a hotelier or tour operator reading this? Do some research into successful social media campaigns, and don’t give your business, your industry and your destination as a whole a bad name by scamming travel forums. As one disillusioned Tripadvisor user said earlier today:

“I am spinning my wheels on the reviews b/c I feel like literally every hotel is using scam-artist tactics and writing fake reviews. I trust no one at this point…and am so fed up with this situation that I feel like I want to cancel my flight to Hanoi”

Is that good publicity?

…than to go through a tour operator. Since e-commerce took over the travel industry this has become the accepted wisdom. Why pay to book a hotel through a tour operator when you can go straight to the hotel and get a cheaper rate?

In many countries, this is true. Hotels and third party booking sites such as Agoda and Wotif offer ‘best rate guarantees’, assuring the punter that they won’t get a cheaper rate elsewhere. I’ve just been booking hotels in Paris & Berlin for my ITB 2010 trip in March, and couldn’t beat Agoda for rates.

But is it true in Vietnam? Despite claims to the contrary from the Tripadvisor independent travel lobby, the answer, in most cases, is no. Vietnamese hotels, especially locally-run ones, still don’t ‘get’ the internet. Many still don’t even have live booking on their websites, and persist in using request forms. Those that sell through online booking sites offer rates significantly higher than those they offer to tour operators like us. Why? Because for years, and to this day, tour operators have been the hotels’ bread & butter. People don’t generally travel direct to emerging destinations like Vietnam; they want to go through a full service agency who can book their whole itinerary for them, and in 2010 that is still the case.

When I worked for a 4* hotel, tour operators accounted for most of our revenue, and we treated them well, offering them rates up to 60% lower than our online rates. I pressed most vociferously for a more contemporary approach to internet sales, which is one reason I’m not working there any more!

So like it or not, most hotels here are still in the dark ages, and if you want cheap hotel rates, you’re better off going through a tour operator than going direct. Another advantage is the treatment you will likely receive from the hotel. If you’re a direct customer and you have a problem with you room or another aspect of your stay, and the hotel staff are ignoring your complaint, what can you do? If you book through a tour operator, they will normally sort out the problem for you. And if the hotel is overbooked, who do you think is going to get bumped? The direct customer making his first (and probably only) visit to the hotel, or the customer who has booked via a tour operator than gives the hotel hundreds of room nights every year? Hotels aren’t stupid, they like to look after their best customers.

And as a first-time direct booker, you aren’t one of their best customers!