Money lost due to Agoda
As a Hotel / Resort a hotel owner I decided to list my hotel on Agoda, one of the largest online travel agencies (OTAs) in the world. At first, I was happy to see his hotel's occupancy rate increase as Agoda brought in more bookings from around the world.
However, I soon realized that Agoda was taking a huge commission on every booking made through their platform. The commission was so high that I had to increase his room rates just to break even, which made my hotel less competitive in the market. What's more, Agoda had strict policies and penalties for cancellation, which often led to disgruntled guests leaving bad reviews.
But the worst was yet to come. As bookings came in, I soon realized that I was getting rates I did not agree with. A room that should be $49 per night sold for just $6 and then another room for just $4 per night. I called Agoda and the line was cut off. I then called Agoda on another country line and got to speak with somebody who told me that they would call me back after they checked what was going on. Nobody called back or contacted me.
But it got worse with one client coming to check in who had been given rooms for just $1 or less per night! I contacted Agoda again and they said it was due to promotions however no promotion we had agreed to was greater than a 60% discount? So how did the customer get the room so cheap? After much searching online I soon discovered Agoda had a hidden option that was turned on by default called “Promotion Stacking”. This meant that a promotion could be misted with another. For example Last minute discount of 50% off + Mobile App Booking 10% + More than 3 night stay 20% discount and now the client was getting 80% off without me knowing. Nothing in the YCS (Agoda system for hotel owners) ever alerted us to the rate after promotion stacking.
As time passed, I started to notice that Agoda was prioritizing other hotels over mine, even though I was paying the same commission rate. I also found that Agoda's customer support was lacking and unresponsive, making it difficult to resolve issues with guests. The local phone number to call Agoda often had operators that would simply hang up the call as soon as they answered it to get more calls closed and meet targets.
I called Agoda again and informed them I would not accept $6 per night for my small 14 room resort rooms as I already had an occupancy of over 90% and I did not need to accept such low rates. I could not accept walk in bookings at $89 for a triple room as Agoda had sold it for just $6. Nobody at Agoda wanted to assist and so we said to stop accepting bookings.
Next, I get a call from a good return client saying that Agoda just informed them that my Resort cant accept the booking and they need to change hotels. But when they looked at Agoda my Resort was still showing as available for new bookings. This was the start of a total disaster as Agoda now canceled all future bookings at this point without clearly talking about a solution.
But it gets worse. Much worse. Remember that customer that got a room on Agoda for just $4 per night? Agoda found them other accommodation and as we rejected the booking charged us the difference they had to pay for the room. Now I am being charged $27 per night compensation to Agoda for refusing to accept a booking of $4 per night!
Eventually, I decided to terminate his contract with Agoda and focus on direct bookings and other OTAs that had more reasonable commission rates and better customer support. It was a tough decision, but it proved to be the right one as his hotel's profitability and guest satisfaction improved.
In conclusion, while Agoda may seem like a good option for hotels to increase their occupancy rate, the high commission rates, strict policies, and poor customer support can ultimately do more harm than good. Hotel owners should carefully evaluate their options and consider the long-term implications before partnering with any OTA.
My total loss due to Agoda not managing my account and providing acceptable customer service is in excess of USD $20’000 (Remember I am just a small new 14 room Resort in Cambodia).
Note my Resort had amazing reviews and a rating of 9.8 on Agoda. The crazy thing now is that Agoda are now buying my rooms via other OTA’s (Not directly) and still selling using my photos on their website.