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by Kresimir Bojcic
Jun 24th 2020
Booking platform is a great idea!
Tags: business, web booking, tourism

It's election year in Croatia and we have the privilege of reading promises from various relevant and not-so-relevant political parties. It's the usual mix of lower taxes, less corruption, more transparency, higher retirement pensions, etc. One, in particular, caught my attention:

We are creating a web booking platform for private accommodations with a 5% fee.

I think that this is a good idea. Press, on the other hand, is calling it "the craziest idea in a long time." It is so annoying when they chase cheap, cynical likes just to make fun of an idea. Where does this servile mentality come from? What do we base the premise that we are not able to pull it off on? How come Croatian IT companies can work for the best of the best - not to mention create world-class products and export $1.1B in 2018 - yet are unable to build a viable web booking platform just to make global competitors at least blink? I am not talking about world domination. I am talking about a small piece of action that can have a positive impact on the country as a whole.

Based on a commission rate of 15% paid by the owner of the property (rates vary anywhere from 12.5 to 20%), there is no way that Booking, Expedia, and Airbnb aren't making at least EUR 100M in Croatia annually. That's probably a conservative estimate. A government could invest EUR 1M and build a decent web booking platform for that kind of money and they wouldn't even need to advertise it heavily.... plug it into things like EnterCroatia and similar or let private owners do their bidding. We have returning customers, after all! If they could get Airbnb and Booking to halve their fees, it would be at least a net gain of EUR 50M for the country (50x return on investment). As it is, that money is simply heading out of the country, never to be seen again.

Why so salty and negative about everything? Not everybody is a thief, not everybody avoids paying their taxes, and for sure not everybody is incompetent.

I know from first hand experience that there is a high demand on the market having been approached by numerous apartment owners asking us to build them booking web pages so they could run away from current market players. It might not be the greatest idea for a single property owner (unless it's a very small investment), but it certainly is a fair proposition for a tourist-heavy destination such as Croatia to try and build a decent platform of its own.

The game isn't to build a government-backed Unicorn, but to keep a higher cut of the country's tourism earnings.

Get Booking, Expedia, and Airbnb to blink first. Only a government can do that because it's able to recoup any potential losses generated by the platform as it garners momentum for future societal benefit. Probably one of the best ideas ever, if it plays out that way.

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