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When it comes to how best you can run a successful hotel online business, especially if one of your key measures to success is to see a growing portion of the business coming from your own direct channel, many hoteliers, including Chain hotels are still battling hard to try to get to the top of their game, but so far this has been tough and OTAs have had a clear dominance in the market. Read our article about “Direct Hotel Online Bookings vs OTAs” for further explanation and analysis.
In this blog, we shall be looking at what can hotels do in order to grow their direct bookings. We will be sharing with you some of our recommended strategies / initiatives from our direct experience working with many hotels of all sizes by splitting the tasks into each responsible department / role.
Knowing your current situation
Here are some of the stats that you should be taking into your considerations: -
Source: A Deep Dive into the Google Travel Ecosystem, Skift 2018
There are differences between large hotel brands and independents. According to Google Data, online bookings represent 43% of total bookings for large hotel groups and around 55% for independents. The break-down of online bookings reflect that independent hotels are much more rely on OTAs as their main source of production. Up to 73% of independent hotel online bookings come from OTAs (some small hotels on some regions such as ASEAN may be more). But in the case of large hotel brands, particularly mega brands like Marriott / Hilton, this share is much less or could go down to just 30% of their total online bookings.
Understand why people like to book through OTAs
Before we go in more detail into what can hotels do to increase direct bookings, it is useful to understand first the reason why so many customers book through OTAs.
By taking a closer look on the reasons why travellers like to book on OTAs – some unique benefits such as “OTAs have the largest selection”, “all my travel in one place”, which hotels may not be able to match. But many of the rest, hotels should be able to try and match or offer something better.
For example, the most important reason that receives the most votes is “easy to use”. Although OTAs do excel in UX and UI, where reasonable budget has been allocated in making sure that their own channels & booking platforms are easy to use, many hotels should now be considering and prepare a budget for their website improvements that will ensure a smooth booking flow that will make it easier for visitors to book.
Another of the reasons mentioned to book with OTAs is that reservations are “easier to change/cancel”. There should be no reason why hotels cannot do this efficiently and offer even more attractive terms.
Here are our recommendations, initiatives that will enable hotels to better compete against OTAs and to grow more direct bookings: -
E-commerce / Sales Online Department
These are some of the simple and basic actions that hotels can do : -
Focus on conversion rate
Hotels can increase direct bookings by improving the conversion rate of:
- Direct visitors
- Visitors coming via an OTA (billboard effect)
For direct visitors, unless you are planning to acquire your prospective website visitors by investing in the met search sites such as Google Hotel Ads / TripAdvisor, the chance of getting a direct visitors from other efforts is unlikely.
Or, you can simply leave it to OTAs as they are more specialized in these online marketing campaigns. As we mentioned earlier, statistics from google shows that 52% of the travelers will visit a hotel website after seeing it in the OTAs. Unfortunately, many of these visitors are heading back to the OTA to finalize their booking
But how can my hotel improve conversion rate?
Hotels that pay attention to and take action to work on their conversion rates have improved significantly on their conversion rate than those that don’t!
There are multiple factors that have an impact on a hotel’s conversion rate: -
Technological points: -
Website Design (UX / UI), Page Load Speed, Responsive Web Design, Analytics – traffic source and analysis, Social Media platforms, and Booking Engine partner.
Given that hotels should be focusing their resources and attention to running their already complex enough day-to-day running business, it would be unrealistic to expect them to have the in-house capabilities, know-how and technology infrastructure to address all of the above. It is therefore important hotels select the right technology partner who is a specialist in the field, who can provide solutions that can help increase direct bookings with immediate and lasting results.
Google Analytics Dashboard To Track Your Hotel Website Performance & Conversion Rate From Booking Engine
A smart booking engine can help improve conversion: -
Here may be some of the points to be considered when selecting a booking engine partner.
- Optimize for Mobile- Offers complex promotions- Guest’s abandonment letter- Compare prices functions- Alerts & notifications- Exit-intent retention messages- Upselling + cross selling functions- Connectivity to meta search sites such as Google Hotel Ads / TripConnect
After guest leave from booking site
Guest’s Abandonment Letter
Alerts & Notifications
Hotel’s e-Commerce points: -
Market parity, rate parity, promotions, competitor analysis, demand calendar, rate structure / pricing grid, rate strategy, online distribution strategy and dynamic pricing.
A competent e-Commerce or Revenue manager would be able to take up the above tasks and deliver good results. Or, there are several professional revenue management companies who can provide an outsource service or consultancy work. Always look for those with proven track record and have some reference hotels that you could talk to.
At Property Level
Hotel’s Operations points: -
Service Standards, Guest’s reviews, in-house promotions, incl. F&B and outlets, and Guest’s loyalty programme (if any).
At Front Desk, there could be visible decal promoting booking via the hotel’s website, highlighting “Best Rates Guaranteed” and “Guest’s Rewards Programme”.
Thank you letter by GM (upon Guest’s arrival) and Hope to see you soon letter by GM (upon Guest’s departure)
Create an email list of guests that booked via OTAs / Send monthly custom email to the guests, promoting latest special offers, events, packages, happenings, as well as offer a “Book Direct” discount for next stay on hotel’s website.
Reviews: Maintain good ranking on Tripadvisor, Social Media, Google and OTAs.
Create Guest’s Loyalty Program
This is probably the ultimate goal of any hotels’ business objective. Hotels have a clear edge over OTAs on the fact that customers spend days/weeks experiencing the hotel brand and interacting with the hotel. Investing on building unique brands and superior guest experiences is surely to have a better return on direct bookings than competing against OTAs in customer acquisition.
“You guys all criticize me for how much I charge you for guests to come to your hotel. I think you’re looking at it wrong. Look at us as the cheapest source of referrals that you could imagine. If they come through me, you pay me once, and if they come back to me again and again, shame on you. You should make them a loyal customer”
– Former Expedia CEO Dara Khosrowshahi.
Hotels should equally strive to earn the loyalty of customers who booked through OTAs. Many hotels treat OTA bookers as second class guests, which is a self-destructive strategy towards a growing customer base with significant prescriptive power.
There are a few loyalty programs around in the market or some PMS may have an additional module as an option for you to explore. Small and independent properties may not need to come up with complicated loyalty programmer and to keep it simple and straight forward with easy redemption would be the key to achieving higher numbers of repeated guests.
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