OTAs became big and powerful at a time of uncertainty and declining revenues in the early 2000s and became a lifeline to hotels. And while third party bookings ‘are’ valuable, they are also very expensive – charging anything between 25-30% commission on each booking. 76% of all online bookings happen via OTAs and it is expected that many independent hotels will see a 10:90 split in favour of OTAs within the next 3 years (HeBS Digital)!
In reaction to the increasing growth and dominance of online travel agency (OTA) giants like Expedia and Booking.com, there is now a huge direct-booking drive by hoteliers. With the onset of cloud hotel technology and digital hotel software, hoteliers today now have the tools they need to concentrate on improving their direct bookings. Here we discuss some of the ways you can increase your share of direct online bookings, and start tipping the scales in your favour.
Mobile Compatibility – This should be a no-brainer by now; Long gone are the days when smartphones were the exception, they’ve now become the norm. More and more people are browsing the web from their phone; more than two-thirds of leisure and business travellers use their smartphones to research travel, last-minute reservations make up 30% of OTA searches and 25% of hotel website bookings, and by 2018, it’s predicted that mobile devices will account for 37% of all online hotel and travel bookings. However, according to a 2014 study from TripBarometer, only 45% of hotels accept mobile bookings! Having a hotel website that is only optimized for desktop will inevitably lead to a growing number of dissatisfied users who choose to book elsewhere.
So, if your site is not already configured, now is the time to ensure that your hotel’s channels are multi device compatible and are therefore optimized to serve a much larger audience- If your current booking engine is not mobile optimized, switch today to one that is. Every day you wait, you lose business.
Embrace digital guest engagement: Travellers today want more than just great customer service – they want a personalized experience. In a 2014 Yahoo survey, 78% of consumers expressed a desire for some kind of personalization, and another study by IGH revealed that nearly three in five (59%) travellers say their hotel stay is significantly more comfortable if services are personalised, and more than half (54%) admit it makes them feel more valued.
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The most important element in delivering exceptional guest service is knowledge – and hotel technology has made this possible. With a cloud-based PMS, hoteliers have immediate access to all the guest information needed to deliver that desired personalised experience. The system is designed to gather guest information from a number of sources such as automated email responses, mobile concierge requests and pre-arrival questionnaires, all allowing you to build a robust and dynamic guest profile. Collating pertinent guest information allows hoteliers to enhance and personalise marketing communications and tailor upsell and amenity opportunities specific to each guest.
This use of technology to deliver personalisation not only opens up a whole new paradigm when interacting with guests but it can generate increased customer loyalty and guest satisfaction, higher occupancy rates, and an improved bottom line.
Targeted promotions and Incentives: Hoteliers are of course more than aware of the rate parity clause that comes with their OTA contract and relationship i.e. whatever the hotel offers / sells publicly, the OTA can also sell this on their site too – which is a draw back when trying to drive direct bookings because your cheapest rates should always be on your website.
However there are methods hotels can use to drive more direct bookings, which they do not have to share with OTAs, and can also avoid the expensive OTA commissions at the same time! Most rate-parity agreements do not apply to guests who are part of your brand’s marketing database. This means hoteliers can easily market compelling offers to a “closed” and “gated” audiences, such as social media followers, email subscribers, and loyalty program members, incentivizing them to book direct with the hotel and provide additional perks not offered to guests who book through OTAs.
When InterContinental Hotels Group began offering gated rates via technology to its loyalty club members in a bid to boost direct bookings, the company saw “a material 2% shift in growth rate to direct away from OTAs”, and Year over year, digital revenues were up 7%, accounting for more than $4 billion worth of gross room bookings – “overall the growth of our direct digital channels is greater than the growth we’re seeing from OTAs.” Richard Solomons, CEO.
If you haven’t done something like this before – it is definitely worth a try!
Guests are now highly connected and multi-device dependent and there’s no doubt that the hospitality industry has seen a shift in the last couple of years around how people book online. With OTAs continuing to persevere, trying to drive direct bookings is not an easy task and takes a bit of (constant) hard work, love and attention – but it can be done, and you can do it!
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