Published on Wednesday, May 2, 2018

Hotel booking site challenges rivals with zero commission offer

Booking site Hotel Bonanza is offering accommodation providers 0% commission if they promise not to sell cheaper on any other third party websites.

In order to benefit from zero commission, accommodation provider must also offer Bonanza Club members an additional 5% discount.

The online travel agent said the 5% discount would be based on the hotel's room rates on other websites.

Accommodation providers will be able to offer cheaper rates on their own websites and still be eligible for Hotel Bonanza's 0% commission.

The site, which launched last year, was originally charging hotels 8% commission, but co-founder Suzie Barber said this was much lower than established rivals like, which charge up to 30%.

Bonanza Club members must to signed in to see the discounted prices, so Barber said rate parity clauses are never affected.

She believes that by not charging hotels commission, Hotel Bonanza will enable them to offer lower prices and perks such as complimentary drinks, spa treatments and discounted meals.

To access Hotel Bonanza prices and receive the 5% discount, users need to register an email address. After they make their first booking, they enter a 30-day trial period, at the end of which they will be charged a membership fee of £10 a year.

So far, Bonanza Club has attracted 10,000 members and signed up 14,000 properties, leading it to place a £1.35 million valuation on the company.

Hotel Bonanza plans to raise a further £4.5 million in three phases, the first of which will be £250,000.

"To reflect how much we want accommodation providers to be part of our journey, we have decided to open our round to them first offering a reduced valuation of £1m with a minimum investment of £100," added Barber.

"The industry has wrestled with the problem of high commissions for many years and this is an opportunity to make significant changes that will benefit accommodation providers and consumers in the future."

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