An inherent advantage that hotels have over OTAs is that they can offer guests hospitality incentives at the point of purchase.
—Justin DeRise
Online travel agencies, or OTAs, are a mixed blessing for hotels. They help to fill rooms and achieve occupancy goals but often at the expense of revenue. When guests book directly with a hotel, it costs hotels less than OTA bookings and is, therefore, better for a hotel’s bottom line. What’s more, direct bookings give hotels the chance to develop a more direct relationship with their guests, and to control those relationships, as opposed to entrusting them to a third party organization like an OTA.
Because of the love-hate relationship hotels have with OTAs, many hotels are currently looking for ways to wean themselves off of them, or to at least
reduce their dependency on them. This means that hotels will have to shoulder more of the marketing burden in order to achieve their occupancy goals. It means that your hotel will need to learn how to convince guests to stay in your hotel. Your challenge will be to demonstrate to prospective guests the added value that they will receive as a result of booking directly with your hotel. An inherent advantage that hotels have over OTAs is that they can offer guests hospitality incentives at the point of purchase. In order to incentivize and convert prospective guests, hotels need to understand what moves and motivates their guests. Here are some of the top hotel incentives for guests:
(1)
Your hotel website is usually the first contact point for travelers, many of whom may not be familiar with your brand and reputation. Even if you are a well established entity, don’t take anything for granted. Make sure your website is simple to use and easy to navigate; if it’s not intuitive, impatient millennials and most everyone else will simply scroll to the next hotel. Remember, you’re competing against the OTAs, whose main draw is their ease of use and convenience. According to the AARP, baby boomers
are more likely to book directly with a hotel. Although it may seem counter intuitive, baby boomers have the same basic needs as millennial travelers; both desire a digital experience that is straightforward and easy to navigate. A hotel interface and booking process that is simple and streamlined is not only a hospitality incentive for travelers, it’s also a competitive necessity for any hotel or chain that wants to achieve optimal performance.
(2)
Free upgrades and room service tend to be at the top of most guests’ wish list and are effective at motivating them to book directly with your hotel. Free parking and free breakfast are also attractive hospitality incentives. In order to convert, hotel incentives for guests must be perceived as meaningful or valuable. Some hotels offer free gift cards, though the demand for that incentive seems to have decreased. Once a big draw, free Wi-Fi is no longer a value-added incentive; for most travelers it’s considered an expectation.
The idea is to experiment with different hospitality incentives and see what’s
effective for different kinds of guests. It could be a free airport pick-up, a free drink at the hotel bar, late check-out, rewards points, or a bottle of wine and gift basket welcoming a guest. Freebies are not effective, of course, unless prospective guests know about them.
Tip: On your website, create a pop-up featuring a special offer that will appear when users visit your booking page. Make sure to highlight your best hospitality incentives next to the “Book Now” button. Remind them that the incentives are available only when they book their reservation directly with the hotel.
(3)
Some hotels like to offer new guests, and reward their regulars, with discounts for booking with the hotel directly instead of using an OTA. While this makes sense in theory, why give your profit away
when you don’t need to? What guests care about most is value. Try using hospitality incentives like free upgrades to convert them instead of lowering your price.
(4)
How to convince guests to stay in your hotel – that is the question. One rule that hasn’t changed in all these years is that first impressions matter. The only difference is that nowadays the initial perception occurs online and in the social media universe. Hotels that wish to compete with OTAs must make an investment in their website
presence. This is especially true for millennials, who evaluate prospective hotels based in part on how well they integrate technology. If your brand is perceived as low-tech by millennials, hospitality incentives will be far less effective. Start by investing in your website and social media presence.
(5)
In a study conducted by Mandala Research, 60 percent of U.S. travelers indicated they had taken an eco-friendly trip during the last three years. Meanwhile, a Booking.com sustainability travel report indicated that 55 percent of international travelers felt more strongly
about wanting to book an eco-friendly trip than they did the past year. Hotels throughout the nation are answering the call with energy-efficient building systems, eco-friendly waste management techniques, and by introducing green certification programs.
(6)
Technology is one of the most desirable hotel incentives for guests. Presented with a choice, most travelers – certainly millennials and members of generation z – would opt for a tech-savvy hotel over a low-tech hotel.
To meet their constant demand for technology, hotels need to leverage technology and automation at every touch point in the guest journey, from initial booking and check-in to in-room amenities and hotel design. Consider offering guests technology-driven
experiences like remote check-in and plenty of charging ports. Cloud-based, hotel property management systems like StayNTouch help hotels leverage technology and become more efficient and productive.
(7)
Hotel incentives for guests also include offering last-minute deals — yet another great strategy for boosting guest stays. Hotels that need to sell last-minute inventory should target millennials as well as young families seeking stay-cation opportunities, as they are more likely to be swayed by last-minute deals. In fact, Criteo’s Summer Travel Report concluded that 70 percent of the last-minute reservations that hotels received were made on mobile devices. According to Skift, 52 percent of millennial business travelers book their reservations on their mobile devices and 60 percent of mobile hotel bookings are made at the last minute. Hotels seeking to sell their final inventory should heed the data and take advantage of the last-minute market.
Hotels realize two big benefits when guests book with them directly, sans the middleman: their revenues increase and they assume control of the guest relationship throughout all touch points of the guest journey. Hospitality incentives can persuade travelers to book directly with your hotel and bypass the OTAs. If executed properly, they can boost occupancy, stimulate word of mouth, and increase profit.
The hospitality incentives that we reviewed are not ironclad rules. What will be effective for your hotel depends on local and regional factors; hotel incentives for guests should be customized based on the needs of your market. For insight into what incentives to offer, consult your data. Try different strategies and see what works for you.
Once online, our PMS delivers comprehensive multi-property management, including central configuration, CRO, rate management, guest profile management, and multi-property reporting. —Justin DeRise Great hotel technology
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