HiRUM Software Solutions

Check-in.com Checking Back In – Buyer Beware

Posted by HiRUM Software Solutions -28/08/2013

Check-in.com has been purchased and re-listed just 8 weeks after their financial collapse under debts (reportedly) in excess of $4.4 million.

The company, along with its 350,000 strong customer database, supplier lists, domain names , logos and intellectual property, has been purchased by Allied Consolidated for a mere $35,000. Allied has employed former MD and founder Simon Isaacs as a consultant to the new owners to ease the transition.

Allied Consolidated has not taken on any of the liabilities or obligations of the previous operating entity, Accommodation Clearing House. At the time of its collapse, it was reportedly $4.4 million in debt, and had $120,000 in the bank, despite having a turnover of $50 million in its final year.  There were approximately 5300 creditors; 4000 of them were consumers who had prepaid accommodation and 1300 suppliers, on the most part accommodation providers.  (http://www.traveltrends.biz/ttn555-checking-back-in-collapsed-website-revived-with-former-md-in-consulting-role/)

Interestingly, it appears that the new company may have set up a relationship with another wholesaler, as some suppliers are reportedly finding that their product is now being advertised on the Check In site, despite having terminated their relationship with them due to non-payment.

Meanwhile, Manfred Holzman, who is the liquidator appointed to Accommodation Clearing House, has expressed real concern with the way this merchant payment model operates.

“The whole way this works is wrong and the whole industry needs to be looked at…..The issue I see is that these people set up their booking engines and don’t have to maintain a trust account.  They are receiving huge amounts of money from people and they can hold 100% of that for months,” Mr Holzman stated. “A lot of people believe they will get their money but they won’t…………It’s really, really sad.”

It is important for accommodation providers to do their own research and make an informed decision before signing up with any online booking merchants, as the merchant payment model can be precarious in the current market.  Some of the Online Travel Agents are now offering a different payment model, with monies held direct by the accommodation venue (in their trust account)and commissions then paid to the OTA after the guest has stayed.  Others offer a virtual credit card system so that the money for the stay can be debited at the time of the stay, rather than waiting the additional period for payment to be sent by the booking site. If you are looking at listing your product on Check-In.com, perhaps it is prudent to discuss with them alternative payment terms which are more favourable for you as the accommodation provider and also for the customer.

This issue only serves to heighten the importance of driving as much business as possible direct to your own website.  Ensuring you have claimed your domain name, and optimised your website, considering both Keywords and Google Adwords is vital, as is ensuring your website is mobile and tablet friendly. Using Property Management Software with effective Online Booking Software and an accessible and user friendly “Book Now” button such as HiRUM provides, will go a long way in helping you to capture direct bookings, rather than relying on external booking wholesalers.

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