Booking.com, Yeego: NH Hotel Group #epicfail

Summary: Leveraging your digital prowess means providing great online service to start with.
This case study outlines how digital failings can lower trust and reputation.
How this affects your brand equity is discussed.

Last month I made my travel plans to attend the 43. Deutscher Marketing Tag (43rd German Marketing Day, see the interesting program – PDF file, 2.4 MB).

One of the first questions was whether to book my hotel using an online platform or directly on the hotel’s website?

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Of course I had heard about the duopoly of Expedia and Booking.com. They handle four out of five agency bookings in Europe. At 80 percent, that means that the third operator, HBS, has apparently lost a lot of ground recently. Other small competitors and start-ups, such as  bookbedder, are offering property owners better terms.

But hotel owners do not necessarily like these platforms. For instance, you pay a 12 to 15 percent commission to Booking.com. However, regardless of customer evaluations, your property may still rank seventeenth on the list. If you increase Booking.com’s commission to 40 percent, you’re suddenly ranked first, as experienced by Thomas Küble, manager of Berne’s Ambassador and City hotels.

Brand equity seems to play some role in this game of chess. According to David A. Aaker brand equity is like a chest of drawers with the following:

1. Awareness of the brand, meaning our target audience knows about our brand – or not.
2. Associations with, and beliefs about the brand (e.g., associating the brand with sustainability).
3. Attitude towards the brand (i.e. positive, negative or no opinion).

The following NH Hotel Group reservation staff case neatly illustrates how digital prowess can influence a person’s belief about a brand. We also outline how someone’s attitude toward the brand changes in the process of making a hotel reservation.

1. Price match

The first thing a hotel would want to do is match the price on any of these platforms. In other words, you do not have to undercut them, but offering the same value for money is obvious. Let me explain.

For my stay during the Marketing Day in Leipzig, I looked at Booking.com and other platforms, including the hotel’s own e-commerce shop: NH Hotel Leipzig Messe.

NH Hotel Leipzig Conference - Surprise us, please.
NH Hotel Leipzig Conference – Surprise us, please.

When I checked the NH Hotel Group’s own reservation platform, I found the price as listed below. An additional €10 or more on top would be due for breakfast.

Room rate of €98.90 plus breakfast = 30 percent more than elsewhere online. Does that build customer loyalty?
Room rate of €98.90 plus breakfast = 30 percent more than elsewhere online.
Does that build customer loyalty?

So I started searching the web to see if I could find something cheaper. I found several platforms that offered me a room in Leipzig for a similar or even lower price. Because I wanted to stay near the conference venue, the NH Hotel Leipzig Messe was ideal. What puzzled me a bit was that some platforms offered me a lower price for this hotel than its own website did.

Hence, I checked if the hotel would match any of those lower rates.

2. Make things easy for your client

The price guarantee below shows that for all practical purposes, advance bookings have to be paid in full and are non-refundable. Quite common in the industry (see also Accor Hotels). This rule is important for getting the refund, as I will explain a bit further below.

The rate conditions are standard, i.e. you pay in advance and incur a charge if you cancel your reservation.
The rate conditions are standard, i.e. you pay in advance and incur a charge if you cancel your reservation.

So I wanted to take NH Hotel Group up on its offer to match a competing platform’s offer. You can get hold of reservation staff via phone or chat.

I tried the chat twice, i.e. I lost the agent once so I had to try a second time. After the first try, I called, but was told the phone agent could not help.

So after wasting 10 minutes on the phone I tried the chat a second time to see what the NH Hotel Group would do about following its Best Price Guarantee (see above).

To do this via the chat, you need to present NH Hotel Group with the competing offer. So I sent the yeego.com policy as a screenshot.

Yeego - owned by Italian Escapade S.R.L. offers a 25 percent better deal than the NH Hotel Group's own website. Does that make economic sense?
Yeego – owned by Italian Escapade S.R.L. offers a 25 percent better deal than the NH Hotel Group’s own website. Does that make economic sense?

Yeego’s cancellation policy (see above) is actually way better than what NH Hotel Group offers (see below).

When a best price guarantee is worth less than the paper it is written on - NH Hotels - sounds great, but in reality it is a #epicfail.
When a best price guarantee is worth less than the paper it is written on – NH Hotels – sounds great, but in reality it is a #epicfail.

3. Building trust: Apply your Price Guarantee correctly

The agent from NH Hotel Group compared the Yeego policy with theirs. Anyone would expect that NH Hotel Group would offer me the room for €80 less 10 percent, as stipulated in the policy, which would add up to €72 including breakfast. Think again!

Below I show the critical part of the chat protocol indicating why NH Hotel Group was ‘unable’ or ‘unwilling’ to follow their Price Guarantee Policy.

NH Hotel Group's Best Price Booking Guarantee is a strange one... if the competition's conditions are more lenient and generous, NH does not match the offer... go figure!
NH Hotel Group’s Best Price Booking Guarantee is a strange one… if the competition’s conditions are more lenient and generous, NH does not match the offer… go figure!

As you can see further, Yeego.com offers me a refund in full minus a €15 fee. All I have to do is cancel at least seven days in advance using their website. By contrast, NH Hotel Group only offers me a ten percent refund.

Obviously, Yeego is more generous than NH Hotel Group, even with their refund policy. Which means – according to their rules – NH Hotel Group is not required to honour their price guarantee. That does not make sense, but it is exactly what the reservation agent told me as shown above.

What does this tell us? Read on and find out.

3 takeaways: How hotels make it EASY for Booking.com, Expedia and HBS.com to succeed

1. Damaging trust: Make sure your staff does not truly understand your policies

If you offer to price match, and take an additional ten percent off (in my case €72 price for room and breakfast), do it. In other words, don’t tell me that because the other site’s refund policy is better, and yours is misleading, you won’t make it right. You’re basically telling me you don’t want my business, and that’s just ridiculous.

Using a loop hole to avoid honouring your own policy when push comes to shove damages clients’ trust in your brand.

2. Buyer beware: Use your digital means to annoy your clients

“We’ve seen from our customer research that 65 percent of all guests are likely to re-book hotels where they’ve had a great experience, and staff attentiveness ranks as the top driver of great hotel experiences.” – PWC

Having to jump through too many hoops to get an answer from your service agent does not make a great FIRST impression.

Worse is that I will likely tell my colleagues and friends about it. In short, through this blog entry, you and many others now know the NH Hotel Group’s price guarantee is not worth the screen you see it on.

If this does not amount to an example of what negative word-of-mouth marketing can do to PR, what does?

3. Damaging reputation: Adding insult to injury

Making it hard for your client to get their problem resolved does injury to your relationship. It also shows that you still need to learn a lot in order to master digital sales. However, you add insult to injury if you fail to do right by your client.

Two things can happen. First, customers may shy away from booking a room via your own platform. Instead they may prefer using Expedia or Booking.com to make a reservation. Second, for each room sold that way, your net revenue will be reduced by 15 percent or more. This is the additional cost you must bear in the form of a commission paid for each room and night sold through these platforms.

As a business owner, I find this a strange way to improve your company’s ROI (return on investment).

4. Have your say – join the conversation

Source: Booking.com, Yeego: NH Hotel Group #epicfail

What is your opinion?

  • Do you remember the last time you had a company wriggle out of honouring its own policy?
  • How do you ensure that your employees know how to interpret a company policy correctly?
  • What bugs you the most when it comes to shopping online?

The author declares that he had no conflict of interest with respect to the content, authorship or publication of this blog entry (i.e. I neither got a freebie from any of the mentioned companies nor are they our clients).

To put the icing on this proverbial cake, maintenance of NH Hotel Group’s website is done during the week.

So, when people want to book on a regular weekday morning, they get nothing. My visit on Tuesday, November 8, 2016, around 08:30 (MET) yielded this:

Your site is under maintenance during regular local business hours. Does this build customer loyalty? Maybe try Friday or Saturday night at midnight, instead? You know, when people aren't trying to sned business your way... All together now: #epicfail
Your site is under maintenance during regular local business hours. Does this build customer loyalty? Maybe try Friday or Saturday night at midnight, instead? You know, when people aren’t trying to sned business your way… All together now: #epicfail

Final remarks

Because Yeego.com offered a better guarantee (i.e. refund policy), I booked there for €80 including breakfast. I will see on November 23 how attentive the staff is when I stay overnight.

In David A. Aaker’s language about brand equity, this case illustrates that my association and beliefs about the brand changed. I associate it not with keeping its promises as stated in the Price Guarantee. My attitude towards the brand has moved from no opinion to a negative one. Maybe my visit to the Leipzig property will change that.

Urs E. Gattiker

Professor Urs E. Gattiker - DrKPI is corporate Europe's leading social media metrics expert (see his books). He continues to work with start-ups. Urs is CEO of CyTRAP Labs GmbH.

8 thoughts on “Booking.com, Yeego: NH Hotel Group #epicfail

  • 9. November 2016 at 10:32
    Permalink

    Interesting
    Booking.com, Priceline.com and others such as Kayak are all travel sites owned by Priceline as you probably know. In fact Priceline claims it…

    is the world leader in online travel & related services.

    So they are surely eating into the profits from hotel chains including the NH Group. Thus if the latter acts as you explained above, not surprised that they have a tough time.
    Unless it is worth going to the hotel site (e.g., service, choices)…. it is often more convenient to go to Booking.com.
    Moreno

    Reply
    • 9. November 2016 at 18:17
      Permalink

      Dear Moreno
      Thanks so much for sharing your thoughts. During the last earnings call this week Monday, Priceline revealed that group bookings were up 26% to $18.5bn in the quarter.
      Earnings rose more than 1/5. If that is not doing great for a 20-year-old internet company, what is?

      Although annual growth in room nights reserved has declined from 40% in 2012 to 25% last year. Nevertheless, for my business having a 25% growth rate qualifies as great 🙂

      Priceline is trying to deal with competitors eating into its business. For instance, Airbnb is trying to lure compare travellers to alternative digs for an attractive price, including getting more space. But hotel groups including Accor or Marriott are all fighting to make sure they attract people to book with them and not Yeego or Priceline.

      In fact, this week during its earning call Priceline explained that 7mio of its total 24mio rooms are non-hotels. This would indicate that it is less dependent on hotel chains for business than maybe some of its competitors.

      Nonetheless, I agree with you that hotel chains need to do better. In particular they need to keep their stated promises and guarantees.

      Maybe what is needed is to insource some of the outsourced reservation and service lines. This allows for better quality control since these staff are part of the corperation and not possibly located far away and working for another company.

      Thanks for sharing.
      Urs

      Reply
  • 21. November 2016 at 10:02
    Permalink

    Dear Urs,

    thank you very much for your detailed description of the above scenario, which we take very seriously.

    You may be happy to know that NH Hotel Group has reacted by

    1. changing the best price guarantee policy, and by
    2. building an action plan to improve the quality of the service within two weeks.

    We hope that you enjoy your stay at NH Leipzig Messe and that your next booking experience with NH will be satisfactory for you.

    Kind regards
    Adrian on behalf of NH Hotel Group

    Reply
    • 22. November 2016 at 8:29
      Permalink

      Adrian
      Thanks so much for your reply here. May question is of, of course:

      1. What has changed in the price guarantee policy. I can read:
      “We offer, in cases where a lower on-line net rate with the same reservation conditions is found (specified in Terms and Conditions),…”
      The key here is “the same rservation conditions” which would mean, I could not get it because Yeego’s conditions are more generous than yours.
      Do you agree or did I read this wrong?

      2. What action plan will this be and, most importantly, how will it affect the process when having to deal with your online reservation staff?

      I hope you can answer these two points Adrian,
      Thanks so much.
      Respectfully
      Urs

      Reply
      • 24. November 2016 at 18:46
        Permalink

        Dear Urs,

        We have loosened our conditions – now, cases like yours will fall into our best price policy and will receive a discount. To adjust the legal wording on our website will take some time, but the new policy is already in practice.

        As part of the action plan we’ve trained our chat staff so they will be able to treat incoming requests differently, according to the above-mentioned extension of the policy.

        I hope you understand if I cannot share more in-depth information with you as it is business-sensitive. But were working hard to improve the booking experience for our guests, based on such valuable feedback as yours.

        Kind regards
        Adrian on behalf of NH Hotel Group

        Reply
        • 25. November 2016 at 8:45
          Permalink

          Dear Adrian
          Thanks so much for answering my queries.

          Good to hear that NH Hotel Group decided to change its policy accordingly.

          That change will help improve one critical #touchpoint in the customer journey.

          The second is surely improving what and how the chat staff do their work. Using fewer piped replies will surely make things more authentic for clients.

          The Third one is check-in. My check in in Leizip on Nov 23 was supberb. The lady was helpful, and lateron when we asked her about directions, going to town and so forth, she was again a fountain of information (that we wanted, mind you).

          The Forth touchpoint for me was the breakfast buffet. It was superb and the staff were nice and friendly, even before 7 am 🙂

          All in all, if we can improve the reservation touchpoint for clients that would have been all nice and peachy.
          Thanks again for caring.
          Urs
          #BrandBuzz

          Reply
  • 25. November 2016 at 10:03
    Permalink

    Dear Urs,

    caring for our customers is our top priority :-).

    Thank you very much for your kind words which I have shared with our staff at NH Leipzig Messe. We hope to be able to welcome you back soon!

    And, of course, any further feedback is highly appreciated.

    Kind regards
    Adrian on behalf of NH Hotel Group

    Reply
    • 26. November 2016 at 14:05
      Permalink

      You are welcome Adrian.

      One can make suggestions where things can be improved. Yes and with a company like yours that claims “Caring for our customers is our top priority…” it should work. And it does like your case illustrates. Super.

      But as important is that we as clients let you know what we find great and what we like as well.
      I sometimes find that as a client one is much quicker in complaining about something that must be improved than praising a supplier or provider that things went well.

      Yes front desk and breakfast touchpoints were excellent for me. And when I entered the room, the housekeeping clerk nearby made sure I got the electric power I needed (she was worried I did not remember to use my card key to get the power running for the room). Again a little thing but her explanations and all with her Saxonian accent, great 🙂

      Thank you.
      Urs

      Reply

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