Booking.com Seeks Compromise Between Renters and Hosts

Many renters of vacation homes want the free option to cancel reservations if necessary, while hosts want confirmed, non-refundable bookings. Entering the fray is Booking.com, which encourages hosts to accept a compromise.

The online travel giant introduced its Smart Flex program last year, which adds cancellation flexibility to some listings. Booking.com targets guests who are unlikely to cancel and offers them refund-ability. If a guest books and then cancels, the agency is on the hook for finding a new guest, essentially guaranteeing a reservation for the property owner.

About 70% of customers are looking for bookings that offer the option to cancel, said Eric Bergaglia, senior director, global head of accommodations segments, Booking.com, during the Skift Short-Term Rental Summit in New York on Wednesday. "So our program makes non-refundable reservations refundable."

Hosts who participate see a 3% increase in booking conversions, Bergaglia said in an interview with Skift Executive Editor Dennis Schaal.

Booking.com can afford to take the risk because it uses data analysis of guest behavior over millions of bookings to detect patterns. It also has been enjoying strong revenue growth in the vacation rentals segment, giving it a margin to take some risks.

"Last year we had the best year ever in the homes space, with 56% growth year on year," Bergaglia said. "Looking ahead, we see a trajectory of gaining share from supply and demand perspectives."

UPDATE: The figure for the percentage of travelers who want refundability has been corrected.