The direct booking battle has been going on for a while now and more and more hotels start focusing on the increase of their direct bookings. Why is this so important and what are the advantages of direct bookings over OTAs? Read it here.
Online travel agencies (OTAs) have been taking over the hotel industry, so far that up to 4 out of 5 bookings are made through OTAs! This means that OTAs are gaining momentum and in return hotels pay more and more commission. Hotels are starting to fight back and with big chains such as Marriott and Hilton leading the way. They are starting campaigns such as “It pays to book direct” and “Stop clicking around” which notifies their customers of the advantages of booking direct. A direct booking does not only bring advantages to customers, it also brings big advantages to the hotels!
Instead of investing in commissions for OTAs, hoteliers should be investing in increasing their direct bookings and start building a sustainable future for their hotel. And here is why:
Gain insight into your customer’s data
When your hotel has worked together with OTAs before, this contract statement might look familiar to you:
“Direct Marketing to Guests. The Accommodation agrees not to specifically target Guests that have been obtained via [OTA] in either online or offline marketing promotions or solicited or unsolicited mail.”
This clause in the contract specifically states that the hotel should not contact the guests that booked through the OTA and cannot target them for any marketing purposes. Sometimes this clause even includes that the OTA will be the only owner of the guest’s data and this is where you should be careful.
When your customers book direct, you have access to all their data: gain their contact information and get to know their booking preferences. You can use this information to your advantage and get to know your customers better.
Build a loyal customer base
In general, customers who book directly through your website are more likely to become a returning guest. When they have taken a closer look at your website, they will get the feel of the ambiance of your hotel and brand. This in contrast with OTAs where all hotels are displayed in the same way and you will just be one of many.
When your customers book direct, you can offer them specials by means of a loyalty program. A role model in this field is Marriott Hotels. Their direct bookings guests have special advantages such as special check-in and check-out times and they can earn points for every stay which they can trade for special offers such as an extra night stay, a discount or a special offer such as a scuba-diving trip, culinary workshop or tickets to a musical. Since you also have your customers’ data now, you can contact them and target them with campaigns for returning visitors.
Lower distribution costs
This is of course the most obvious statement, but also super important! OTAs can ask insanely high commission costs, ranging from 10 to 25%. Save on this and increase your direct revenue by focussing on direct bookings for your hotel.
Even if you use other services or various offers to convince your website visitors to book direct, the distribution costs will be lower. For example, you can offer a discount of 5% to get your visitor to book directly through your website, while otherwise you might have spent 15% on commissions to an OTA.
Hotelchamp offers strategies and software which will convince your visitor to book direct. In contrast to OTAs, it works using a SaaS model, with an average fee of around 300 euros a month. “Our customers are earning back three to five times these costs,” says Kristian Valk, Hotelchamp CEO. “We always offer a fixed price for greater transparency. Our end-goal is to focus on being independent from OTAs, increasing their profitability and improving their guest relations.
All in all, when focusing on direct bookings, hotels have the chance to build stronger relations with their guests and they can save a huge amount on commission costs. This all will help hotels to build a sustainable future for themselves. When does your hotel start participating in the direct booking battle?