12 Aug Here is My Two Cents to Increase Your Direct Bookings
As we know OTAs or Online Travel Agent, sell hotels’ rooms on for a commission, most of the time between 20% and 30% of a room night. But if the hotels don’t involve these middle men in the picture, hotels could either pocket that commission paid to these OTAs or in a worse case can end up having an unsold room. OTAs help hotels reaching to the extent that otherwise impossible to a hotel considering its tiny budgeted marketing and technology investments. Despite not so welcomed, OTAs are indispensable to hotels – It is like few married couples we see in everyday life, Can’t live with ’em. Can’t live without ’em.
Bit of Flashback..
The meteoric rise of the OTAs in early 2000’s was a surprise to most people. They were killing off conventional travel agents with a new concept of centralizing the entire travel buying experience that included flights, hotel rooms and taxi. And frequent technology changes, face of growth and adoption to it, all well supported these OTAs and are till favoring them for one reason – OTAs thought of themselves as a technology company, and not just a hotel related company, and they still adopt the same mindset and know that it is the key to their success.
Hotels realized the growing trend of threat by 2005’s, started to do everything possible to drive all that bookings through hotels’ own websites, such as expanding loyalty programs, revoking distribution agreements with OTAs, and adding extras to direct bookers – It was a success, but short lived. OTAs were smart, who invested heavily on innovation in technology and marketing that enabled them to gain the lost control back by 2008. Now, they’re untouchable in terms of technology and marketing due to unimaginable amount of money they invest only advertising and technology, making them top spenders on advertising – Imagine, Priceline spent estimated $2.8 billion and Expedia spent $3.3 billion on advertising, digital marketing and technology in 2015 alone. Probably a hotel chain would rather think of a new brand being added to its company to appeal more Millennial guests for that amount of money.
Alright, you might be more interested in discussing a few ways to increase your direct booking, rather than history bla..bla.. But, ‘diagnosis is necessary for treatment’. Why would a traveler want to book with an OTA anyway?
“Well, they got that cool, colorful, easy to use website with lots of information that I really enjoy and helpful for my travel plan with alternative options. More over I see a lots of authentic comments from other travelers that I can trust. And I don’t have to wait till I get to my laptop or desktop to start planning with my dream trip”
How comparable is your hotel’s website to above?
- Probably a bad website that is confusing or not giving enough information the guest is looking for?
- Slow, it’s loading contents forever?
- Might not be responsive, particularly not mobile phones friendly? According to Oracle Hospitality studies, 56% of travelers browse using a mobile device, and 46% book a room using a mobile device. Try https://growtraffic.com to increase your site’s traffic along with good blog posts highly quality and originality, along with high resolution images of your hotel and about hotel’s on-going happenings.
- Didn’t find your hotel’s website? Here too, OTAs dominate the search engine marketing and audience re-targeting (re-marketing to users they have been to the site without conversion) by buying keywords for independent hotels in business with them. Funny enough, they say they spend money on hotel’s name to give them the bill-board effect. Very interesting open letter from a hotel here.Unfortunately, OTAs dominate even the organic search results.
- The guest is not convinced that he is getting better deal directly due to rate parity clauses in the agreement blocking your hotel publishing a better rate? Rate Parity? With smaller hotels, OTAs can change their rates depending on location and device too; they can send the booking at net rates to the hotels, while reducing the rate below contracted margin by setting it off with their commission on mobile devices only. As the younger price concerned travelers increase in bookings on mobile devices, this can also have a significant impact on direct booking.
- Google released a case, Traveler’s Road to The Decision that confirmed 53% of bookings made on an OTAs first travel to the hotel’s website, then went back to book through OTA site. According to the study, simple-to-use tools, better pricing, loyalty programs, familiarity with the brand itself are the reasons.
Giant OTA, Expedia’s CEO, Dara Khosrowshahi considers themselves a tech company that spends 800 million dollars a year on technology, and not just a hotel company.
With such a huge unthinkable amount of money these giant OTAs, especial Expedia and Priceline invest on technology and marketing online / offline, perhaps even top hotel chains all combined, targeting to defeat them in this sectors, seems illogical.
- OTAs do the tougher task of your hotel reaching out to remote travelers, that are otherwise impossible, and over 50% of travelers do visit a hotel’s website prior to making any bookings back back on OTAs, this is the best opportunity to making sure to convert a online looker into booker, and not to return him back to cost you that extra 20% – Your website!! (Content, technology, SEO)
- Maintain a good reputation on review sites as it is quite possible, a traveler after learning your hotel on an OTA site, might want to check it in a review site, even before deciding to visit your hotel site.
- Enhance your offering with added packages that adds more value than extra dollars the traveler would be saving with OTAs. So having a user friendly good looking booking engine that is optimized and capable of selling extras at the time of booking would be a good investment.
- Marketing your special offers to select group of customers on a social media so that you’re not in violation with your OTA parity agreement. There are quite a number of service providers who can assist you in integrating a sign up form on to your Facebook fan page for example.
- Converting an OTA guest to a direct guest completely lies on hotel’s ability after the first stay, and incentivizing with loyalty program could also help guest select the same property on his next visit.
Good news is that reports suggest that early 2016 has seen some better and promising stats towards positive side of hoteliers. Let’s hope that sustains, and in another post will look into it.