Tech, ExplainedE-commerce, travel and logistics
Product

Hotel booking engine

The one channel with no commission.

BEFORE ITAFTER ITHotel booking engineSimplotelCOVERSDirect bookingNo commissionRoom extrasMobile checkoutChannel managersendsprices andfree roomssendseach bookingProperty managementsystem (PMS)takesthe paymentPayment gateway↗ ONLINE PAYMENTSsends guestcontactsHotel guest CRMBEFORE ITAFTER ITHotel booking engineSimplotelCOVERSDirect bookingNo commissionRoom extrasMobilecheckoutChannel managersendsprices andfree roomssendseach bookingPropertymanagementsystem (PMS)takesthe paymentPayment gateway↗ ONLINE PAYMENTSsends guestcontactsHotel guest CRMBEFORE ITChannel manager↓ sends prices and free roomsHotel booking engineSimplotelDirect bookingNo commissionRoom extrasMobile checkoutAFTER IT↓ sends each bookingProperty management system (PMS)↓ takes the paymentPayment gateway↗ ONLINE PAYMENTS↓ sends guest contactsHotel guest CRM
A guest books two nights at an Udaipur heritage hotel on its own website, which saves the hotel about ₹3,200 in commission compared with booking through a travel site.
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A hotel booking engine is the software on a hotel's own website that lets a guest choose dates, see the rooms and prices, and book and pay directly. It is the one channel through which the hotel pays no commission to a travel site. A booking made on the hotel's website is called a direct booking.

Why does that matter? When a guest books through an online travel agency (OTA), the hotel pays the travel site a commission, often 15% to 25% of the room price. On a direct booking, the hotel pays only the booking engine's fee and the payment gateway fee. The payment gateway is the software that takes the guest's card or UPI payment. Its fee is usually about 2% of the amount.

The booking engine shows a calendar, the room types with photos, and the price for each night. It reads the prices and the free rooms from the channel manager, so that the website never offers a room that has been sold elsewhere. The guest picks a room, adds extras such as breakfast or an airport pickup, and pays. The booking goes straight into the property management system (PMS), and the channel manager reduces the free rooms on every other site.

Consider a 30-room heritage hotel in Udaipur, in a restored haveli, an old mansion built around a courtyard. A room costs ₹10,000 a night. If a guest books two nights through a travel site that charges an 18% commission, the hotel pays ₹3,600. If the same guest books on the hotel's website, the hotel pays about ₹400 to the payment gateway, plus a small fee to the booking engine. So the hotel tries to win direct bookings. Its booking engine offers 10% off and a free breakfast to guests who book directly. Even after the discount, the hotel keeps more money than it would through the travel site.

Booking engines also help the hotel know its guests. On a direct booking, the hotel receives the guest's email address and phone number. This is first-party data, which the hotel collects itself. It goes to the hotel guest CRM, which can send the guest offers later. Travel sites usually share less of this contact data with the hotel.

A good booking engine must work well on a phone, load quickly, and show the full price, including tax, before the guest pays. Many guests first find the hotel on a travel site and then visit its website to compare prices. If the website is slow or confusing, they go back and book on the travel site.

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