Booking.com now gets paid by both sides

Lola, Booking Holdings' new AI assistant, books hotels, tables and tickets in one chat and charges members up to $25 a month for rates up to 15% below the public price

by Markus Busch

On Tuesday, Booking Holdings opened Lola, an AI assistant that finds and books hotels, restaurant tables and event tickets inside one chat. Lola charges the traveler for it. Paying members get hotel rates below the public price.

The hotel still pays commission on those rooms. So a single stay booked through Lola can earn Booking Holdings twice: a commission from the hotel, and a membership fee from the guest.

When we covered Lola in May, it was a single web page with a borrowed brand and a tagline that ended in "Just ask." Now it has a price list.

What Lola is

Kayak's co-founders, Steve Hafner and Paul English, built Lola in five months with about 20 people in New York and Cambridge, Massachusetts. It is wholly owned by Booking Holdings, and Hafner reports to CEO Glenn Fogel.

A member types what she wants. A hotel for the weekend, a table for Friday, two seats for a concert. Lola answers with live prices and books inside the chat. Booking.com, Priceline, Agoda, Kayak and OpenTable feed it, along with outside partners such as GetYourGuide, SeatGeek and the wholesaler Nuitée.

It also keeps a guest profile on every member. Lola requires a login, and its privacy notice says that when a member connects her Gmail, it pulls details such as hotel addresses and confirmation numbers from her travel emails into that profile. It reads her calendar to keep plans from clashing. Paying members also get a human concierge from Ten Group, which says it has direct perk arrangements with 5,500 to 6,000 hotels, such as breakfast, upgrades and late check-out.

Other AI travel assistants promise much of that. Lola's difference is who pays.

The guest pays

Membership comes in three tiers. Free. Plus at $5 a month. VIP at $25 a month. Both paid plans lock the member in for 12 months, which makes VIP a $300 decision.

Hafner gave Skift the logic in one line: "If you pay us, we don't need to make money on transactions." The fee replaces the margin, and Lola says it passes that margin back as hotel rates. According to the launch release, Plus members typically save 10% at qualifying hotels and VIPs save up to 15% at four- and five-star hotels. Those rates come through Booking.com, Priceline, Agoda and Nuitée.

Hafner's own comparison is the premium credit card, minus the card. The traveler pays a yearly fee and earns it back in hotel savings and perks.

The hotel still pays

When Lola sells a member rate on a room that comes through Booking.com, that room still carries a commission. The member's discount comes out of it. Hafner told Skift as much: once the member pays a fee, Lola no longer needs to keep the commission, so it goes back to her.

The numbers line up. The VIP ceiling is 15%, and 15% is the base commission many hotels have paid Booking.com for years. The hotel pays what it always paid. Booking Holdings hands it to the guest as a lower price and collects a membership fee from her instead.

Skift published a company-supplied screen for The Plymouth South Beach: four nights at $783 for a VIP member, against $997 on Booking.com and Expedia. That is about 21% off, more than any commission.

The rest comes from somewhere. A discount the hotel already funds, such as Genius. Booking.com's own money. Or a wholesale rate, which Agoda sells through Rocket Travel, its arm for closed groups of travelers like Lola's members. Lola hasn't said which.

A price you didn't set

Every hotelier knows the rate behind a login. Genius works that way, and the hotel opts in and pays for the discount itself. Lola's member rate is set by Lola, paid for out of the hotel's commission, and sold to a guest who paid to see it.

That puts three prices on the same room inside one company. The public rate. The Genius rate. The Lola member rate. The hotel sets the first one.

The member rate doesn't sit alone, either. Every Lola tier includes Kayak's results from hundreds of travel sites, and Lola's FAQ says it shows several booking sources so members can compare. If your direct rate reaches Kayak, it can land in the same chat, right next to the member price.

Why it takes no ads

Lola sells no placement. The release rules out vendor payments, featured spots, advertising and sponsorship, and the homepage repeats the promise. Hafner told PhocusWire he "used to love ads" at Kayak and runs Lola differently. It won't buy Google search ads either.

For an independent hotel, that sounds like good news. It also leaves nothing to buy. Lola picks from what it knows. English told Skift the team is training its own model on travel data from the open web plus a billion Booking.com transactions.

Lola doesn't need the hotel's ad money. The guest and the hotel are paying.

What's not proven

Lola launched to a narrow audience. Its FAQ says members are admitted in waves by invitation, with general availability later this fall. The same FAQ lists Plus and VIP as coming this fall, so the hotel discount may not be bookable yet. Lola also describes Plus two ways: typically 10% at qualifying hotels in the release, up to 10% at four- and five-star hotels on its pricing card.

Hafner told Skift he expects about 90% of active users to stay on the free tier. The model holds only if member fees outweigh the commission Lola hands back. Nobody knows yet which travelers will pay.

The Monday check

When the paid plans open, ask Lola for a hotel like yours, on dates you know well. Put the VIP price next to your direct rate and your Booking.com rate. Then ask your Booking.com account manager whether the Lola rate is built on your Genius discount or your Payments by Booking.com agreement.

Hafner says he wants Lola to become as big a brand as Booking.com. That would be a brand the guest pays for, selling a room the hotel already pays to sell.

Read also: The third life of Lola, and what Booking Holdings just admitted

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