How Kolkata’s low budget hotels game the system to make 3x more money

Here’s my experience with some of Kolkata’s low budget hotels near the airport. They have developed a smart modus-operandi to game the booking platforms and also cheat customers while ensuring full occupancy as well as high earnings and hence, lot of money, about 3 times more!.

Read this post to understand how some (if not all) of Kolkata’s low budget hotels manage to cheat every stakeholder in the ecosystem.

If you’re running a business, like hotel, how will you maximize your income while also ensuring no room goes empty on any day? If you list your property on various hotel booking websites at a higher price, there’s a risk that no one will book (as there are cheaper rooms). If you list at lower price you will get lots of bookings but you can’t make much money.  So what is the way out? Do both.

There seem to be many small capacity low budget hotels in Kolkata, who don’t have any branding or identity to protect and zero business ethics, who list their property on one website (say booking.com) for lower rate- say Rs 450-500 a night- There’re lots of people who simply sort by rate and book cheapest rooms as they are tight on money or just need a place to crash at the night and don’t care for luxury much. This ensures these hotels there is always some bookings and their rooms won’t go empty.  At the same time, they also try their luck listing the property (under a different name) on another website- say goibibo.com for a much higher price- Say Rs 1100-1200 a night, particularly on weekends and high demand dates. At times they get lucky and people book at higher price- particularly during weekends where demand is higher and there’ll be some customers who think 1100 INR is a fair price for a hotel room. (There’s no easy way to assess worth of a room- lot depends on how much value customer sees in it during the few minutes of search-people decide based on their budget, whatever impression they can get from photos of the room on the booking website and their instant judgment of a property in comparison with few others they might have spotted in similar budget and location.)

On top of it, there’s no integrated inventory management. If a hotel owner says he has 5 rooms, he can sell 5 rooms on every booking platform. Each won’t have a clue how much is booked on other site, plus even if they could, these people list property under different names, slightly different address to avoid detection of their fraud.

So now, this small 2 room property owner can take 2 bookings from Booking.com, 2 booking from GoIbibo and more from elsewhere- that is assuming he has listed only 2 rooms and not 4 or 6 or more.

On several days, property owner will get both low value bookings (of Rs 500) and high value bookings (of Rs 1100+)- but he has only 2 rooms- so what will he do? He has several tricks
- Cancel low value bookings citing some silly excuses (like customer didn’t call to confirm or anything)
- Wait till customer arrives and calls- then claim non availability and send them to other hotels operated by his friends
- Try demanding more money from customer and see if they are ready to pay even more. Guests who are desperate will accept any alternative provided at that point too tired to find another place of their own and not being able to fight with these guys. (like if I had agreed to pay 1500 instead of 500 he would have given the room to me and denied it to the Goibibo customer who was to pay Rs 1200)

These unprofessional hotel operators can deny your bookings for other reasons as well- such as
#1. A makemytrip customer might have paid in full but MMT takes 40 days to transfer the money to hotel owner- they might just prefer a customer who pays in cash instead.
#2. Even though amount customer pays is same, some portals charge less commission- so he can save some money if he takes customers from less commission website and rejects others.

Won’t the reviews and feedbacks and complaints matter? Why would anyone do like this and disappoint customers?
These low budget hotel operators with few rooms don’t have any identity or reputation to protect. Their properties are unmarked, operated out of rented residential buildings- if they are de-listed or anyone complains big time, they can simply make a new listing with different name, slightly different address and resume their way of cheating everyone. They are operating in lowest of the price bracket- there is always some other customer ready to book cheap rooms- they aren’t counting on you to give positive feedback or come back again.

My Experience in Kolkata- Nijer Bari is AVI House
For my visit to Kolkata I booked this room, named Nijer Bari on Booking.com. Originally I had booked for June 22-23 (weekend) period long back-sometime in May. Later I made one more booking for June 21-22 (Friday). This property was not listed on Google maps-from the address given I could figure out it is closer to Kaikhali area.

On Friday I arrived in Kaikhali area near Kolkata airport, called property number for direction. I was asked to come near Sathyam tower. I was told booking for tomorrow (weekend) can’t be honored- his excuse was that I didn’t call in advance to confirm. But later he confessed that he has got lots of high paying bookings from Goibibo

On Goibibo this same property is listed under a different name- Avi House. How do I know? Because the photos listed on Goibibo match with the photo of the room I stayed in. You can see below for the same date, room is listed for INR 1200 on Goibibo- some guests will fall for it and book- then he will deny accommodation to those who booked the property on booking.com for  Rs 470. 3 times the money,  zero responsibility. If No one books on GoIbibo, booking.com customers get to stay! Maximizing earnings is the only criteria. Confirmation given to customers mean nothing, inconvenience doesn't matter and feedback/review/complaints- they don't care. These thugs just want to make maximum money from each customer/booking as possible. Nothing else matters.
Above: screenshots of same property listed higher on Goibibo- refer the photo I clicked below with the same photo shown
I was allowed to stay on Friday because he had no other high value bookings for that day. He tried cheating me saying I have to pay Rs 470+57 Rs booking.com commission- total Rs 540- I said he has to pay commission from the amount payable- Rs 470 and can’t charge me extra. He reluctantly agreed, called booking.com support to cancel my booking for next day. Later he also marked my Friday booking as cancelled, probably to save on booking.com commission and avoid negative reviews.

This place is a 2 bedroom house, probably rented for Rs 8000-10000 a month. By listing it for Rs 500 to 1200 per room, they can make easy profit anywhere between 30000-70000 a month.


Booking.com promptly suggested me an alternative property, which I accepted- these guys turned out to be even bigger fraud. They don’t exist at the address given (very close to airport- probably false address is given to win bookings from customers who want to stay closer to airport). Upon calling, I was asked to come to a point some 3-4 kms away (Chinar Park area) and was told on phone that I have to pay Rs 200 extra on the pretext that room I am confirmed for isn’t available. When I refused, he said “Don’t come- go somewhere else”. I should have checked reviews of this place before accepting- my bad- people have already stated what I had experienced. Instead of cancelling the booking with "we are not honoring this booking" from their side, they wait for a day and claim "customer no show"- then I will have to explain to booking.com what exactly happened. (same like Ola drivers who don't want to come try to trick you into cancelling the ride)
The thing is I travel around with one backpack and I am now used to confirmed hotels and hostels turning me away (read my Costa Rica Experience). So I don’t panic, I don’t hesitate to move around and find another place to stay. If someone is trying to trick me into submission they won’t be successful. I found some other place for that night, for less.

There is no point complaining against these people- property sites won't act. At best they remove listing and these people will add new one with different names. It is also waste of time trying to talk sense to these people- often they are low life thugs who will resort to foul language and abuse if you question their unfair business practices. They may also have a whatsapp group among themselves to share details of bookings and customers and who can be milked more. The second property fellow asked if I was staying in "that 2BHK house"... Best is to detect and avoid them.

How to identify these fraudulent low budget hotels?
Below are the tell-tale signs of these operators
#1. They are very unlikely to have a proper name and branding- some generic names
#2. None of the property photos will have a signboard or property name shown anywhere.
#3. Property is not listed on Google Maps- you can’t reach the property on your own without calling them for direction. When you call, they have the option of taking you to any of their property that has vacancy or deny you admission or demand extra money. You won’t have real usable address, so you can’t go there, locate the property and deal in person. Even the address listed, if you manage to reach on your own, could be fake.
#4. Most are unmarked residential properties being exploited for commercial purpose in the disguise of guest house/home stay etc.
#5. Number of reviews are usually very few, if any (they cancel bookings claiming no show to save on commission and avoid bad review, if listing is removed they list again with a different name later)
#6. During off peak season they are often listed at the lowest rate in city- if you sort by price low to high, these will take up top 5 spots- this is to ensure they will always have some customers.

Note: Individually any one or two of these above points may not be strong enough to suspect a property is risky or fraudulent. But if you see several of these signs, then definitely it warrants additional scrutiny.

Why booking platforms like Booking.com or Goibibo won’t act?
First I am not sure if they are aware of above practice. Even if they do, they would prefer to deal with one affected customer at a time when the situation arises, than have stricter rules for hotel partners.

As a customer you may book one or two rooms a month- but a hotel partner supports 100s of bookings each month and gives them commission- so hotel partners are also important part of the ecosystem. Thus booking websites won’t have a motive to be super strict and discourage/remove suspicious/low quality listings. Most booking platforms don’t have an integrated inventory management even today- the mantra is “Let the customer make a booking and make payment, once money is received if hotel can’t accommodate him we’ll try to put him up in another similar hotel in the area". 

The drawback of this approach is that you'll realize trouble only on the day of check-in and you'll have to spend hours dealing with customer care of finding alternate place from the street, while you should be relaxing in your room or proceed with your planned site seeing or business meeting etc

But if Booking.com or Goibibo or other platforms are serious about quality, they should take following steps
- Demand address proof and ownership proof of each listing- like electricity bill, property tax receipt etc to ensure person listing the property owns it and address is correct
- Allow review even on cancelled bookings to explain why it was or had to be cancelled
- Give a provision for guests to file a complaint. (Reviews can only be done after the stay- no easy provision to complain if property address is incorrect or hotel refuses admission or other such fraudulent practices- only a complicated customer care process exists which isn’t streamlined to regulate above practices.
- Insist that properties should have a signboard outside showcasing property name-this helps avoid listing same property on multiple sites with different names, locals can be aware of commercial activity going on in the building and guests can locate the property with less difficulty
- Like AirBnB have a better profiling of the host to ensure someone will be accountable if they try to game the system.
-Make it illegal to list same property under different names in different sites.

What precautions to take while booking ultra low budget accommodations
- Hostels with known names are overall lot better than unknown low cost hotel rooms- stay in hostels where possible- even if it means no privacy of an own room, rest of the services will be standard.
- Where possible, for low cost stays, an AirBnB booking is more reliable as there’s host profile and better standards/support system than other sites including booking.com/goibibo
- Where possible stick to a known brand- like FabHotels, Treebo – these are a few hundred rupees more expensive but are expected to offer slightly better standard rooms and service than unknown properties.
- Before booking check the following
   #1 Is the property name searchable on google?
   #2 Do any of the photos show property name?
   #3 How many reviews are there, since how long it is listed on the property?
- If you’re sorting by price, it might be good idea to avoid first 3-5 listings- the cheapest ones- if you can’t verify their credentials. Better to pay a few hundred rupees more
- Have a back up plan- easy if you're alone and don't have big bags and few hours to spare (to find another room). If not, like traveling with family, have bags, arriving late night etc- better spend a few hundred more and stay in a mid range hotel.
- Where possible stick to pay at property option- this will save you from having to pay in advance and then struggle for a refund.
- Post booking, speak to the property, confirm your booking, try to validate whatever description they have given on the website, address etc- this serves two purpose- you can cross check the information and alerts you to any anomaly, get a sense of how friendly the host/staff is.
- Check dormitories run in railway stations and airports- these are usually a bit better
- There is always more supply than demand. If you have a bit of flexibility, you can always arrive, walk in, check a property and check-in. There is no need to panic and book in advance unless you need full confirmation and clarity on where to go upon arrival.

I am not sure if hotels in other cities do the same- quite possible- better to be safe. I have seen bike rental operators do the same- they list same bike on multiple platforms (like Wheelstreet, Royal Brothers etc) and simply refuse less profitable bookings

Similar: Stay experience at Saldeah Station AC dormitory * Hotels near Kolkata Airport * Kathmandu & Pokhara budget hotels to stay * Tips to select hillstation budget hotels * South Indian budget hotels we stayed in 2015 *

12 comments:

  1. Mind blowing posts with the facts and truths...probably they believe...everything is fair in business.

    ReplyDelete
    Replies
    1. They don't care for fairness. just need to make as much money as possible.

      Delete
  2. very useful information. Thank you very much.

    ReplyDelete
  3. I had a similar problem for a Oyo hotel booked via Booking.com. Got a letter from the hotel that my booking has been xxld due non payment while on Booking.com it was mentioned that all payments to be done at the time of check in!
    Thanks for the revelation!

    ReplyDelete
    Replies
    1. Yes, if they have better paying booking, they need some excuse..

      Delete
  4. Can a consumer case not be filed against such practices?

    ReplyDelete
    Replies
    1. These people don't have any identity to protect. They can simply remove the listing, resurface after some time with different name. Even booking platforms don't have any motives to take strict action, as they also somehow need bookings and commission. Consumer awareness is best medicine.

      Delete
  5. Real eye-opener.This post is highly informative for frequent travellers looking for cheaper options of stay.

    ReplyDelete
  6. Very informative, Thanks for sharing.

    ReplyDelete
  7. Thank for the detailed post Shrinidhi, very informative! These tips will be quite useful.

    I think you should share this post with booking.com and goibibo as well.

    ReplyDelete

Appreciate your efforts and interests to comment. Comments may be moderated due to increased spam. Will ideally respond to comments within few days.Use Anonymous option if you don't wish to leave your name/ID behind- Shrinidhi

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