Faster than the arrival of the summer vacation, it is the notice of commission adjustment on major platforms.
Recently, a number of media reported that the Douyin platform announced that the commission for the accommodation sector will increase from 4.5% to 8% from July 1. Not long after the news of Douyin's commission increase was released, there were rumors in the industry that other platforms would also plan to increase commissions, and the logic of commission increases was that they tended to expose locations and traffic acquisition, and there would be differences in commissions for different priorities. According to its publicly released policy information, Kuaishou will be commission-free for hotel merchants from July 1 (inclusive) to August 31 (inclusive), 2024 (inclusive) for a limited time, so as to attract new merchants to stay.
01
Multi-platform commissions were announced before the summer
Judging from the facts, Douyin's round of commission adjustment is the platform's overall commission adjustment in the third quarter, involving some business sections of local life-beauty, shopping jewelry, medical and health experience, etc. However, its commission adjustment in most business sectors is a commission reduction, and for the accommodation sector, it is a collective large increase in commissions.
The picture comes from the official website of Douyin Life Service Learning Center
Compared with Douyin, Ctrip, another core customer acquisition channel, has a high commission, and has long used factors such as the amount of commissions and the price of supply to distinguish the ranking level of hotels on the display page.
It is reported that according to industry insiders, Ctrip's hotel booking commission rate is divided into three levels: 10%, 12% and 15%. Among them, the top two grades are Ctrip Gold and Special Brand. In the Ctrip system, special brand hotels have the highest priority display rights, followed by gold medal hotels. Specialty hotels can only cooperate exclusively with Ctrip, while Gold Medal must guarantee the most competitive price on the whole network. And Ctrip's commission for some high-star hotels can be about 20%.
In other words, if the hotel wants to get Ctrip's traffic tilt, the commission is basically 12%-15%, and at the same time, it must have a price advantage. To some extent, it has been hinted that merchants should choose one of the many platforms. On top of that, the hotel's order volume, which is how much money Ctrip can make from the hotel in the near future, is also an important factor in getting traffic.
Of course, some people will heat up the war, and some people will want to reap the endgame. According to the content announced by Kuaishou, this commission-free model is a first-to-collect and then return-to-back model, that is, for new hotel merchants who settle in July and August, 100% of the technical service fee will be refunded after deducting the payment channel fee in the first month. It is not difficult to see that Kuaishou also wants to get a piece of the pie.
From a business point of view, whether it is a commission increase or a commission reduction, it is the choice of the enterprise based on its own business stage and strategy, and it is the game and trade-off between the profitability and market share of the platform, and there is no right or wrong.
For hotel merchants, the support of traditional channels for their customer acquisition has been relatively stable and controllable, and the emergence of new platforms is more of a new opportunity emerging in the original channel structure, and Meituan has also grown into a mainstream customer acquisition channel. And with the entry of more and more platform players, the choice space for wine and tourism merchants is becoming larger and larger.
02
Thinning profits is a fundamental driver of business sentiment
Although this hotel commission war was provoked by Douyin, there is no conclusion as to why Douyin is staring at the hotel's skyrocketing commission at this time.
But what is certain is that if hotel businesses want to continue to work on Douyin, they will have to bear the reality of increased costs. And at the moment of the market "volume" price and "volume" service, the rising cost cannot be passed on to consumers, and it is unrealistic to pass it on to experts and service providers, and it is likely to be eaten by the hotel itself.
As for the news that Douyin's commission has risen to 8%, the reaction of wine and tourism merchants is mixed.
Some hoteliers bluntly said that the impact of the commission increase on his actual business is not so great, and the main reason is that the proportion of room night transaction conversions from the Douyin channel is very low.
However, he also said that for the Douyin channel, it has always been deployed as an increment, and the core sources of online orders are still OTA, Meituan and other channels. Douyin attracts him on the one hand, because of the ability to attract marketing and "plant grass" for consumers, on this basis, if it can bring transaction conversion, it is naturally better, and low commission is also an important reason why he has been spending his energy on Douyin to try to do conversion.
If Douyin raises commissions, and the commission rate is almost the same as that of OTAs, Meituan, and other platforms with large order volumes, then for him, he may not plan to work hard anymore and just let it be.
There are also hoteliers who are deeply dissatisfied with Douyin's commission increase.
For now, the average commission rate in the accommodation industry is about 10%-15%, it said. In comparison, Douyin's 8% commission rate seems to be okay and does not exceed the industry average. However, it should be noted that operating Douyin not only has to pay the commission after the transaction, but also needs to consider multiple operating costs including content output and advertising, including Kuaishou, which proposed a commission-free policy, as long as the content platform has to face this problem.
Previously, a relevant research report pointed out that Meituan's comprehensive commission rate is 4%, and the commission rate of the platform based on content drainage can reach 10-15% after including content production costs.
That said, in addition to commissions, Douyin merchants also need to consider 6%-11% of operating costs. From the perspective of the hotel industry, after Douyin commissions reach 8%, the cost that hotel merchants need to pay is the basic commission plus 6%-11% operating costs, and the total commission rate has reached 14%-19%, which is no longer cost-effective as a new channel in the growth period.
Moreover, the commission rate of Douyin is not long since the last increase, and this kind of frequent commission increase in the short term will also make merchants feel uneasy.
In June 2022, Douyin also announced that the platform's accommodation commission rate was raised from 0.6% to 4.5%, but at that time, it was corresponding to its determination and series of actions in the hospitality business sector.
For example, in March 2023, a support policy for hotel and tourism businesses will be launched; In May, the calendar room function was launched, allowing users to book instantly; In July, the organizational structure was adjusted and the hospitality business was upgraded to the first-level department of Douyin Life Service, keeping pace with the in-store business. All these behaviors make merchants feel that they can reap greater transaction conversions in the future with the help and blessing of the Douyin platform.
However, the reality has not developed as expected, and the wine and tourism products on the Douyin platform are still more "popular" with low-cost group purchases, and only the products of the hotel to do activities will have relatively high sales and write-off conversion on Douyin, but this part of the customer group often hopes that the hotel will be used as a drain and become a new loyal customer in the future. The reality is that without the price advantage, the consumers who have been attracted will still not book products through the Douyin channel, let alone the write-off rate.
Some merchants said that the write-off rate of product bookings from the Douyin channel can reach 50%, which is already very good, but OTA platforms, including Meituan, have a write-off rate of more than 85%. The proportion of orders plus the write-off rate, from the perspective of transaction conversion, Douyin is definitely not an advantage for wine and tourism merchants.
03
Merchants who are back at the crossroads
So, knowing that he is still in the catch-up stage, why does Douyin still have to raise commissions for wine and tourism merchants again? The biggest reason may be that Douyin's profit logic for the wine and tourism business has changed.
Guosen Securities mentioned in an analysis report on Douyin's in-store hospitality business that advertising business will be the focus of Douyin Life Service this year, and it may be easier to create profits by guiding merchants to advertise on the platform than mobilizing the sales team to expand sales and earn commissions.
In popular understanding, Douyin hopes to rely on its strong traffic entrance advantages to do the business of "selling traffic". According to available data, in the first half of the first quarter of 2024, the number of live broadcasts of wine and tourism merchants on the Douyin platform increased by 70% year-on-year, bringing a rapid increase in order volume, of which the growth rate of hotel accommodation exceeded 1,000%.
On Douyin, the platform can charge advertising fees, including brand advertising, product display advertising, etc.
For most small and medium-sized wine and tourism businesses, in the trial layout stage of Douyin, it is more about the cooperation of key nodes and the cultivation of the drainage and conversion ability of their own accounts, and it is difficult to guarantee the difficulty and conversion effect of live streaming through their own accounts. This model is not the best for merchants whose fan base is not large enough, if the commission increases after the platform transaction, the profit margin is further squeezed, and some merchants have revealed that they are ready to suspend the idea of the Douyin booking channel, and it is not bad to do general content publicity and fan interaction.
However, at present, a group of group stores that have reached the head of Douyin still want to stick to Douyin. Because of the advantages of the store group, these stores can get platform rebates when they reach a certain sales level. At the same time, it also intends to use the scale advantage to pass on the cost to the service provider, A service provider can't take it, and there is also a B service provider, who can do it. In their eyes, the exit of low-end merchants can make the originally scattered traffic gather on the head stores again, which is beneficial.
In other words, they have found a way to survive in the Douyin ecosystem, but in the face of platforms such as Ctrip and Meituan, they do not have a negotiating advantage, or they are not good at playing on other platforms, and their product positioning is also biased from other platforms. These people chose to stand with TikTok.
That's right, take sides. The platform uses rules and advantages to softly force merchants to choose more, which will be a problem that hotels must face next.
In the past, between various platforms, only the display price was spelled, but now the line price has been spelled. It is simply impossible for a hotel to "eat more than one fish" and to please several platforms at the same time. Only their own people have traffic, and disobedient merchants may be demoted by the platform and block traffic.
As for whether Douyin will release more opportunities for new merchants to absorb after the commission increase, some industry analysts said that based on the characteristics of Douyin's group purchase products, if they retreat because they mind the commission problem, these hotel merchants will most likely choose platforms that are close to the consumption level of Douyin users, or similar to the product form.
According to its further analysis, Douyin has always been low-priced, explosive logic, and its profit margin is not high. Meituan, which may do better in low-end hotels after withdrawing from Douyin, or Kuaishou, which is more focused on new-tier cities to meet the travel and accommodation needs of local users and play the commission-free card, both have opportunities.
And the hotels that are still staying on Douyin will have a particularly serious polarization in quality. This kind of business is either a group brand with a certain volume and can be calculated and put into production. Either it is a low-cost bad house, tail house, and repair room, similar to the tail goods and defective goods of ordinary e-commerce. After all, Douyin has always been nicknamed "formaldehyde elimination machine" in the hotel industry.
A low-end hotel merchant who switched to Meituan agreed, and said that Meituan in his area is extremely strong. As long as you make sure that the cross-line price is the lowest, Meituan can guarantee that the 40-room volume is full. Now that Douyin's commission is on par with Meituan, or even slightly higher, there is no better alternative channel than Meituan. With this store alone, Ctrip can't do this.
As for the new "catfish" Kuaishou in the market, it naturally cannot be compared with Douyin and Meituan in terms of scale, and it remains to be seen whether it can grow into another new force in the tourism market in the future in the tourism sector that can compete with Douyin, Meituan, Ctrip, etc.
The picture comes from the photo.com and the screenshot of the network