Booking.com Leaves Hotel Owners With Substantial Financial Shortfalls
Booking.com leaves hotel owners with substantial financial shortfallsfor several months, attributing the payment delay to a "technical issue. This issue is affecting a significant number of hoteliers in regions like Thailand, Indonesia, and Europe, leading to frustration among them. In online forums and Facebook groups, hoteliers are expressing their discontent while speculation about the root cause of these payment failures abounds.
Traditionally, when a customer makes a hotel reservation through Booking.com and chooses to prepay, the website collects the payment and forwards it to the hotel, deducting its commission in the process.
Partners of Booking.com have been experiencing problems with receiving their payments since July, with some cases dating back even further. Despite continuing to accept payments from customers, Booking.com has not consistently passed on the owed amounts to hotel operators and other partners.
In August, the Booking Group announced impressive financial results, reporting total revenues of $5.5 billion and a profit of $1.3 billion for the second quarter of 2023. These figures represent a remarkable 27% increase in revenues and a substantial 51% surge in profits compared to the previous year.
Both room nights and gross bookings came in ahead of our previous expectations as a result of the favorable demand environment. Revenue growth of 27% in Q2 also nicely outperformed our expectations.- CEO of booking Holdings Glenn Fogel
Loren Infeld, an individual with two decades of experience operating hostels in Koh Phangan, Thailand, faced a situation where Booking.com ceased forwarding payments for one of his hostels in mid-April. Loren is an American national.
“There was one chunk that got delayed, separate from the rest, and then all payments disappeared. So six months without payment,” he said.
Loren Infeld leases the premises that house Loud: A Full Moon Beach Hotel. When Booking.com stopped making payments, he found himself in a situation where he had to cover the rent and other expenses from his own finances, eventually depleting his funds to just $3.
Infeld asserts that he is owed approximately 125,000 baht, equivalent to roughly US$3,500, which he considers a substantial amount for a business in Thailand. Due to the unpaid rent, the property's owners took possession of it, leaving Infeld financially strained while attempting to manage his other enterprises. One of his primary sources of frustration has been the difficulty in reaching anyone at Booking.com to address the issue.
“There is no way to contact them. Online it says you must talk to finance or credit control, neither of whom have a phone number or email address.”
He explained that the procedure involves contacting a contact center, which then generates a ticket for the relevant teams. However, these tickets have a short lifespan, expiring every four days, necessitating a new phone call to initiate another ticket. This practice, as reported by multiple hotel operators, has frustrated many.
Consequently, numerous individuals have explored alternative methods to establish contact with the company. These include reaching out via LinkedIn messaging, sending direct emails to the Booking Group CEO, and conducting online searches to locate specific financial officers.
An example is Emily Stanley, an Australian who operates a two-bedroom villa in Bali. She successfully received her long-awaited payment of A$11,000, pending since March, by locating a finance officer on Facebook.
“I feel like that’s the only reason, because I tried everything else. I was calling, emailing and everything but nothing. And then it just was funny that the day after he replied, the money’s in my account.”
Due to the delay in payment, Stanley found herself unable to cover the rent for her own residence. Consequently, she had to accept a travelnursing position where accommodation was included at no cost.
“It was a very hard six months. Very stressful, many tears. I’m trying to be glass-half-full but it’s really hard holding on to that negative energy because people are just walking all over you.”
Trandafir Rat, a villa operator based in Denmark, shared that he had to seek additional employment to address mounting debts. He stressed that he is on the brink of having his electricity disconnected at the beginning of October unless Booking.com settles the €10,000 he claims they owe him.
We ask you to send me the amount [owed] in the shortest time possible because I risk to lose all my whole life work!!!- Trandafir Rat, a villa operator based in Denmark
Other individuals impacted include travel bloggers and websites that receive affiliate payments when visitors click through links on their platforms.
Some operators, who have recently spoken to various newsoutlets, reported receiving their payments only after their stories became public. Last month, the Hungarian consumer watchdog initiated an investigation into Booking.com's failure to remunerate hotel operators in the country, conducting a raid on Booking.com's local office following local media coverage of the issue.
A set of inquiries was directed to Booking.com concerning the issue's nature, the number of affected hotel providers, outstanding amounts, and the possibility of compensation for those experiencing hardship due to this situation. However, the company chose not to respond to these queries but did issue a statement indicating its commitment to supporting its accommodation partners and acknowledging the importance of timely payment processing.
“We understand the frustration of the accommodation hosts and owners that have been unduly affected by an ongoing technical issue and can confirm that the system errors that affected the payments have now been corrected and the transactions of most of our partners have been processed,” the spokesperson said.
“We acknowledge that for some this has taken longer than it should have and continue to work urgently to finalise the rest of the transactions. If any partner has an issue, they can contact us through the Partner Hub.”
In the company's August financial results, CFO David Goulden noted that there were "lower than anticipated" IT expenses during the second quarter of the year. This reduction was partially attributed to the gradual allocation of IT expenditure into the third quarter. However, the specific details of these IT expenses were not disclosed.
Infeld emphasized that merely reimbursing the owed amount by the company is insufficient. He is advocating for not only settling the outstanding balances for every hotel that hasn't been paid but also including market interest in the payments and waiving all Booking.com commissions.