Overview

The main prob­lem of the Web site as it is now is that it uti­lizes the inquiry-based book­ing model. This book­ing model is the most widely used today and the adop­tion of it by keyzz​.com offers some advan­tages and some dis­ad­van­tages when com­pared to the direct online book­ing model.
The main advan­tage is that it appeals to both indi­vid­ual home­own­ers and prop­erty man­age­ment com­pa­nies, widen­ing the tar­get mar­ket and con­se­quently the income from reg­is­tra­tion and monthly pay­ments.
The main dis­ad­van­tage of this book­ing model is for the final user or guest, who will have to learn how to book a prop­erty and wait for a con­fir­ma­tion from the host, which can take from a few min­utes to 24 hours.
This process goes against all online trends that we are liv­ing today. The typ­i­cal inter­net user is online all the time, either on his desk­top, lap­top, mobile, at work, at home, or at school. This user wants instant results, instant answers and instant grat­i­fi­ca­tion.
The mar­ket for vaca­tion rentals is grow­ing fast but it is still very small com­pared to hotels. There are many poten­tial first users who will arrive on keyzz​.com — or any other Web site that lists vaca­tion rentals -, and once they real­ize the book­ing process is not what they are used to, and that it takes too long to be con­cluded, they will give up and book a hotel room.
Bel­low is a com­par­a­tive analy­sis of both book­ing mod­els as well as an overview of the com­pe­ti­tion. But first there a few terms and con­cepts that need to be defined.

Def­i­n­i­tion of terms

Direct online book­ing model is a book­ing model sim­i­lar to the ones used by hotels. Guests are able to book a prop­erty online, pay for it, and receive a book­ing con­fir­ma­tion instantly. In this book­ing model the Web site charges a com­mis­sion from the hosts per night booked. This book­ing model is very fast com­pared to the inquiry-based book­ing model described bel­low, as well as very sim­i­lar to the online book­ing con­ven­tions estab­lished by the exist­ing hotel and flight ser­vices. How­ever, in this book­ing model the chances of book­ing can­ce­la­tion by the host after book­ing con­fir­ma­tion is higher than on the book­ing request model due to the fact that direct online book­ing relies on the property’s avail­abil­ity cal­en­dar being up to date at all times.
One of the many ben­e­fits of stay­ing at a vaca­tion rentals is the pos­si­bil­ity of work­ing with hosts directly, receiv­ing per­son­al­ized treat­ment, and hav­ing ques­tions answered. The direct online book­ing model does not change that. The dif­fer­ence is that all com­mu­ni­ca­tion must be made through the inter­nal mes­sag­ing sys­tem of the Web site. For those who try to cheat and close deals out­side the Web site, there is a con­se­quence: they will not be able to get reviews from guests who did not rent their prop­er­ties through the Web site. Guest reviews is a very impor­tant fac­tor for those look­ing to find their next vaca­tion rental and it is also an impor­tant fac­tor when cal­cu­lat­ing the search rank of a property.

Inquiry-based book­ing model is the book­ing model being used by the large major­ity of Web sites that list vaca­tion rentals online. In this model the guest chooses a prop­erty and sends a book­ing request. The host receives the request, checks the avail­abil­ity of the prop­erty and responds to the request accord­ingly. Once both par­ties agree on the book­ing, the guest sends pay­ment accord­ing to the pay­ment con­di­tions of the host. In this book­ing model, the Web site charges a monthly or annual fee from the hosts in order to keep their list­ings online. This book­ing model is very slow com­pared to the direct online book­ing model, as well as very dif­fer­ent from the online book­ing con­ven­tions estab­lished by hotels and flight ser­vices. How­ever there is a lower chance that the host will can­cel the book­ing after the book­ing confirmation.

Merit-based sys­tem is a sys­tem that pun­ishes hosts who can­cel book­ings after the book­ing is con­firmed by low­er­ing the search rank­ing of those hosts, and con­se­quently reduc­ing the chances of their prop­er­ties being booked. The objec­tive of this sys­tem is to moti­vate hosts to keep their property’s avail­abil­ity cal­en­dar up to date, and con­se­quently reduce the chances of can­cel­la­tion of book­ings by the owner.

Can­ce­la­tion of book­ing by the host usu­ally hap­pens when the owner receives a book­ing noti­fi­ca­tion and real­izes that the prop­erty is already booked for those dates but the avail­abil­ity cal­en­dar was not up to date. This sit­u­a­tion is the main rea­son the inquiry-based book­ing model is more widely used online than the direct online book­ing model. This sit­u­a­tion is also more com­mon amongst prop­er­ties man­aged by own­ers than amongst prop­er­ties man­aged by a prop­erty man­age­ment com­pany for obvi­ous rea­sons. Web sites who use the direct online book­ing model do not refund their com­mis­sion fees to the hosts when there is a can­ce­la­tion by the host. There are steps that a host needs to take when a can­cel­la­tion is inevitable, includ­ing try­ing to find another prop­erty nearby with equiv­a­lent ameni­ties and rates.

Com­pe­ti­tion overview

Cur­rently the major­ity of vaca­tion rental list­ing Web sites uti­lize the inquiry-based book­ing model.
How­ever, Book​ing​.com uses the direct online book­ing model and AirBnB​.com uses a com­bi­na­tion of the inquiry-based book­ing model and the direct online book­ing model. These two Web sites uti­lize dif­fer­ent strate­gies to avoid over­book­ing and con­se­quently can­ce­la­tion of book­ing by the host.
Book​ing​.com will charge a com­mis­sion fee per night booked from the host when­ever there is can­ce­la­tion due to over­book­ing.
AirBnB​.com uti­lizes a merit-based sys­tem in which hosts with a good accep­tance rate of book­ing requests will be able to opt for a direct online book­ing model. Can­ce­la­tions by the host are pun­ished with fees and low­er­ing of the search ranking.

Com­par­a­tive Analysis

Advan­tages of Direct Online Book­ing Model:

For the hosts:

• Cer­tainty of pay­ment and faster book­ing process.
• Bet­ter place­ment of list­ing due to merit-based system.
• Smooth tran­si­tion from the hotel online book­ing model for new users of vaca­tion rentals.
• This book­ing model offers a solu­tion for one of the com­pet­i­tive advan­tages that indi­vid­ual home­own­ers have over prop­erty man­agers that use the inquiry-based book­ing model. Indi­vid­ual home­own­ers can receive book­ing requests and close deals at night while prop­erty man­agers usu­ally do that dur­ing busi­ness hours. The direct online book­ing model can­cels that com­pet­i­tive advantage.

For the guests:

• Faster and more con­ve­nient book­ing process.
• Smooth tran­si­tion from the hotel online book­ing model for new users of vaca­tion rentals.
• Uni­form terms of ser­vice and can­cel­la­tion policy.

Dis­ad­van­tages of Direct Online Book­ing Model:

For the hosts:

• Home­own­ers who like to pick and choose who can stay in their prop­er­ties will be pun­ished by the merit-based system.
• Bro­ker fee added to the daily rates.

For the guests:

• Higher chances of can­cel­la­tion of book­ing by the owner after book­ing con­fir­ma­tion. (Book­ing can­cel­la­tion by the owner is also a pos­si­bil­ity on the Book­ing Request Model)

Con­se­quences of Direct Online Book­ing Model to the Web site:

• Guest accus­tomed to hotel’s online book­ing model will not have to learn and adapt to a dif­fer­ent online book­ing model, mak­ing the book­ing process for vaca­tion rentals more smooth.
• Hosts that do not keep their avail­abil­ity cal­en­dars up to date will have their list­ings place­ment sys­tem­at­i­cally low­ered due to the merit-based sys­tem in place. Con­se­quently the Web site will become a venue for hosts who always keep their cal­en­dars up to date and the over­all chances of can­cel­la­tion by the host will decrease.
• This book­ing model rep­re­sent a com­pet­i­tive advan­tage since the major­ity of vaca­tion rental list­ing ser­vices cur­rently oper­at­ing online use the book­ing request model.

Advan­tages of Inquiry-Based Book­ing Model:

For the hosts:

• Con­cerned home­own­ers have the pos­si­bil­ity of pick­ing and choos­ing who stays in their properties.
• Cus­tomized Terms of Ser­vice and pay­ment conditions.
• No bro­ker fees added to daily rates.
• No merit based sys­tem to pun­ish out­dated cal­en­dars and can­cel­la­tion of book­ing by the owner after book­ing is complete.

For the guests:

• Lower chances of can­cel­la­tion of book­ing by the host after book­ing is complete.

Dis­ad­van­tages of Inquiry-Based Book­ing Model:

For the host:

• Learn­ing curve for guests not accus­tomed to the this book­ing model.
• Pay­ment of a fixed monthly or annual fee even if book­ing fre­quency is low.
• Pay­ment con­di­tions are not stan­dard and guests have a higher bar­gain power over payments.
• Same book­ing model as the major­ity of online ser­vices cur­rently oper­at­ing, which means a lot more competition.

For the guests:

• Slow book­ing process.
• Learn­ing curve for new users of this book­ing model.
• Terms of ser­vice, pay­ment and can­cel­la­tion poli­cies are not standardized.

Con­se­quences of Inquiry-Based Book­ing Model to the Web site:

• Web site’s reli­a­bil­ity is affected by how up to date the listed property’s avail­abil­ity cal­en­dars are.
• Com­pe­ti­tion is a lot higher because the major­ity of vaca­tion rental list­ing ser­vices cur­rently oper­at­ing online use this book­ing model.

Con­clu­sion and recommendation

These are some of the rea­sons keyzz​.com should adopt the direct online book­ing model. That way it will ful­fill the needs of a niche of hosts that pre­fer a more auto­mated book­ing process, spe­cially prop­erty man­age­ment com­pa­nies. And it will ful­fill the needs of most guests who only use the inquiry-based book­ing model because they do not have a choice.
On a per­sonal note, using the online direct book­ing model will make my grad­u­ate the­sis project more inter­est­ing and answer ques­tions like: “What makes your project unique?”, “Why com­pet­i­tive advan­tage do you have over the com­pe­ti­tion”, and “Why would the user choose your Web site?”