"Tourists come to Israel despite expensive prices"

Isaac Mizrachi

Booking.com Israel country manager Dr. Isaac Mizrachi says the Israeli tourist market is resilient in the face of the high cost of living.

Every day 1.55 million accommodations are reserved worldwide through Booking.com, which was founded in Amsterdam 20 years ago. If a hotel is not there, it almost does not exist. For vacationers, Booking.com has become a generic name for reserving a hotel room. This is not just overseas; a recent "Globes" survey showed that Booking.com was also surprisingly popular in internal tourism. 56% of Israelis said that they reserved their vacation accommodation in Israel through Booking.com, far more than through other websites.

Booking.com lists over 28 million accommodations in 200 countries. It came to Israel 10 years ago, and two years ago also established a development center in Tel Aviv that has over 50 employees. Booking.com operates as a separate business entity in each country, and most of its business is with local accommodation. In Israel, 6,000 places in 20 different hosting categories are involved: hotels, apartments, guest rooms, and even boats.

"The interaction with them," explains Booking.com Israel country manager Dr. Isaac Mizrachi, "resembles a business consultation format, including management of a return and management of content in order to optimize the work. To a great extent, this is a measure of Booking.com's success."

Tourists come to Israel despite the prices

Tourists visit Israel and most of their criticism is that it is very expensive here, certainly for accommodation. Do you see this in the criticism?

"That it's expensive here is a paradox I hear not only from Booking.com, but also from friends visiting here, who are surprised by the cost of living. On the other hand, the numbers are astounding. People come here despite the prices. To the credit of the Israeli market, let it be said that it's resilient in the face of this situation."

It can be assumed that the potential here is much greater, and that the cost of living is preventing it.

"True, but Booking.com doesn't tell the hoteliers to lower prices. We don't interfere at all in this matter."

The order of pictures is important

What is the measure of success for a guest? How does a guest find accommodation on this massive platform? Two main measures are taken into account: rating and the pictures. Both are encompassed by an atmosphere of credibility that provides the foundation for Booking.com's existence.

"The pictures are critical for the conversion rate between the number of people looking and the number people making reservations," Mizrachi says. "If something looks phony or processed, it sets off warning lights and sends surfers to look in a different place. It's an entire creed. The order in which the pictures are displayed in a gallery is important. The pictures have to present the room, the view, the food, and above all tell a story.

"We use professionals, for example for the question of whether to include people in the pictures. We found that in more luxurious hotels, we show more furniture and fewer people, while in an urban hotel, we want to show people sitting around the bar. Israeli hotels are also improving in this aspect, with awareness of the content and the presentation. We don't say what should be put in and left out. Every accommodation is responsible for its configuration on the website."

"Globes": Do you check whether the pictures represent the real situation?

Mizrachi: "We don't check whether or not there is a chair in the room like there is in the picture. We hope and strive for the two to match. We have 28 million accommodations, but if there are repeated complaints about the pictures, Booking.com will check, because we want to be a reliable site, and this causes us damage."

In guest rooms, for example, there are stories of tourists encountering something vastly different from the pictures displayed on the website.

"Unfortunately, it's not just guest houses. There are such cases here and there, but there is a system of reliable and trustworthy criticism and web surfers, and they make sure to share this with the community."

What if the criticism itself is not genuine?

"There are teams monitoring to make sure that the criticism is trustworthy, and that there are no mishaps. Booking.com knows whether or not you were in that hotel, because our systems are interfaced with the accommodation's location. After the system sees that checkout took place, the guest receives a request to write a review. There are over 190 million reviews on the website. We don't touch the content, nor do we correct typos. Booking.com provides an authentic voice, so that the image of the person who wrote the review comes up when you read it. If it is a hot-tempered or over-fastidious person or there is offensive language, and the hotelier complains, we will check it out."

On the other hand, the guest also understands the power of the review, which becomes a bargaining chip, and the guest can come to the hotel and say, "Give me a better room, and I'll write a more flattering review.

"I don't hear this from hoteliers. I get a positive response from the hotel managers I meet with. But if accommodation experienced such a situation, it knows that it can report it."

In many senses, and especially in an after sale, the service that the guests encounter is far from what the experience abroad. When a complaint surfaces, do you intervene, so that it will be checked out?

"We have a department that deals solely with reviews. We advise the hotels not to send an automatic answer, such as, 'Thank you for your review,' we tell them to read it and answer it individually. Our agenda is that we work with people going on vacation, and we really and truly want it to be a pleasant vacation.

"Booking.com's vision is to help people discover the world easily and pleasantly, but if something doesn't work, the guest should at least be able to expect an answer, and that people can explain themselves and get an individual response. We measure this in the Replay Score (the mark received on the response to the customer's review). This is one of the things that determined the rating on the website. The mark that people see takes into account not only the ratings from the web surfers, but also other aspects, such as the hosting place's conversion ratio - the number of web surfers who viewed the page and the number of people who made reservations there. If 100 people viewed the page and only two of them made reservations, it will be included in the mark.

"Our expectation is that accommodations should answer a guest who published a review within 24 hours. If the accommodation ignores the criticism, or answers late, or through an automatic announcement, it will have a negative impact on the place's rating. Tourism in Israel is in a golden age, and this rare period should be utilized, so that it will extend beyond the next two or three years. This can be done by improving the tourism product, which is composed of content and services.

"The content here is great. Israel has hotels among the most innovative I know of, with a guest experience and good restaurants. The service is getting better, but there is room for improvement. We give workshops and try to teach the hoteliers that it's enough for a web surfer to express readiness to go to the hosting place; even if he or she did not make a reservation, they should be answered personally."

What happens when a hotel has improved its service? Is the bad criticism removed?

"Reviews are left going back for two years. Reviews are removed every day in order to keep the website up-to-date. If a hotel does massive renovations, it can submit a request to remove all of the previous reviews, but this is on condition that it is a really different place, not just a little plastering in the lobby, and then a new page is begun. It doesn't happen often, and only after a thorough check and approval by the headquarters in the Netherlands."

Do you select the hosting places included in the website?

"There is selection. Not every accommodation can get in. That's why there's a local office that knows the territory."

Does the mark that accommodation gets on Booking.com and other websites render the conventional star rating for hotels unnecessary?

"There are tourists who prefer the regular star rating, which they remember from previous years, and there are web surfers, like me, for example, for whom the star rating is passe, and who are interested only in the web surfers' content. I select according to the search words relevant to me: a quiet place and a fitness room. I read 3-4 reviews, and this makes matters clear. There are people on both sides. The Ministry of Tourism does thorough work in rating hotels, but hotels are less enthusiastic about changing the rating system, and I can understand it."

Booking.com rests mainly on leisure travelers. Business travelers prefer to have a travel agent book a hotel for them, and you miss out on a very large segment of travelers.

"There are conventional companies that work with agents, but there are small companies and young employees that bring their personal habits with them into the business world. If they reserve a hotel for a vacation on Booking.com, it creeps into their business. We have Booking.com for Business, which is a segment we'll get into more deeply. Another area that's getting strong is "bleasure" - tourists who combine business with pleasure, which strengthens us in business tourism."

Hoteliers say that they have a shortage of personnel, so there is no one to clean the rooms, no one to answer calls, and certainly not for answering people who did not make a reservation?

"Accommodations work hard, and there is a shortage of personnel. I nevertheless argue that you have to find half a hour a day to answer the guests, even if it's at home during the evening. Service is proven improver of performance, including for the tourism product in Israel, and from a long-term perspective. It's a matter of priorities. Where is service put in the mix? Hoteliers have to ask themselves this, and to think. I've been working in the sector for 15 years, and I see how service can help businesses get ahead, and vice versa - businesses that invested a lot of money and failed because their service wasn't good."

A hotelier who does not want to be on Booking.com does not have to

There is a good reason why Booking.com is regarded as a monster. Mizrachi will not be happy to hear it, but the commission that Booking.com charges hotels is enormous, and also contributes to high prices. The basic commission starts at 15%, and hoteliers says that it sometimes reaches 20%, and even 25%.

All of the hoteliers realize that they have to be on the platform. On the other hand, they are forced to share the profits with you.

"Booking.com Israel has wonderful relations with the hoteliers here. If there are hoteliers who don't want to be on the website, they don't have to."

Admit that they do not really have a choice, even if they curse you deep in their hearts for the 15% basic commission that you charge them for being displayed on the website.

"The market is expressing confidence in us. The hoteliers see the value that Booking.com brings them. Before Booking.com, someone who opened a hotel in the Galilee, for example, had to work for months before someone overseas even knew they existed. Once their entry goes on the website, they're likely to get a reservation from Australia the next morning. Our market powers are phenomenal. No online player is able to sell and market like we do. Hoteliers can understand their value for money very quickly. I answer the opposition to the commissions by saying that this technology has costs, and it takes time to realize what it gives. I understand the anger, but it's a relic of the past."

A trading market is taking place behind Booking.com's back. People are finding a hotel on Booking.com and calling the hotel to book directly, even in exchange for an extra like breakfast. The hoteliers save money on the commission, and the consumer benefits.

"I've heard about this, but we can't control our partners and the way they choose to conduct their business. Fortunately, given the figures for the Israeli market and its consistent growth for years, I sense trust, and it's because of our product."

Looked for a hotel and reserved an apartment

Booking.com puts pressure on web surfers to make a reservation with warnings such as "only one room left" and "dozens of web surfers are considering the same room right now." Is this true?

"All of the information that you see is reliable, and yes, there are other people looking at the room, because it's an international website."

If a place that pays more is shown in a higher place, where is the authenticity?

"Hotel owners have the option to pay for products that help improve the performance and visibility of the page. These places are marked with a yellow like, so the web surfers know that this place is being commercially promoted. This isn't being done secretly. The hotels are displayed according to machine learning, which will show results relevant to the web surfer. If I look for a quiet place with a fitness room, that's what will be displayed to me. The goal is to reduce the friction of the consumer reserving a vacation. We're developing a product that will construct the entire route: where to sleep, where to eat, how to get from one place to another, and when is the best time to order a massage in the hotel - to tie up all of the trip's loose ends. In the future, there'll also be flights, and the consumers can complete their entire timetable in one place."

You will grow even bigger and trample more competitors.

"We don't trample; we compete, and we have many competitors, some of them even from our group, Booking Holdings. Booking.com does not ignore the surroundings in which it operates, but the focus is on how to make it easier for people to experience the world better, and to develop technologies in response to the desires of tourists."

Booking.com is also starting to work with rental apartments against its big competitor, Airbnb.

"Of the 28 million properties displayed on the website, there are six million apartments. This segment also exists in Israel. Tourists want everything from everything. That's Booking.com's power against Airbnb. People entering Booking.com to look for a hotel wind up reserving a room."

You have managed to upset quite a few Israeli consumers in a matter that even went to court - displaying a room price without VAT, which the consumers discovered only afterwards, when they had to pay it when they arrived at the hotel.

"It's being handled by the international Booking.com company. The Israeli partners know and understand that Booking.com is an international website, most of whose users are not Israelis. VAT is irrelevant to foreign users. They also know that it's clearly written that the price doesn't include VAT throughout all stages of making the reservation. It's a transparent matter, and the number of complaints about it has fallen significantly."

Dr. Isaac Mizrachi

Booking.com Israel area manager, 42, lives in Ramat Gan with his partner for 17 years, conductor and musical arranger Noam Enbar. Holds a BA and MA in communications and PhD in marketing from Victoria University in Melbourne, Australia. He was formerly a member of Isrotel's entertainment team in Eilat, content manager of the Lametayel website, marketing manager of the Delaware North Australia hotel chain, and tourism manager in the Tel Aviv municipality. Mizrachi likes traveling, and wants to fly "to every place to which I haven't yet visited. I'm aiming at Brazil now."

Published by Globes, Israel business news - en.globes.co.il - on December 15, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Isaac Mizrachi
Isaac Mizrachi
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