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The Benefits of Focusing on Direct Bookings

RoomStay
Direct Bookings
November 15, 2022
4 mins read

You might think building your hotel brand on existing booking systems is the way to drive long term revenue, but, in fact, you’re doing your brand a disservice.

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Regardless of whether the hotel you manage has been around for a short period or a long period, working with online travel agencies and other third-party platforms will no doubt have made up a significant percentage of your revenue.
It makes sense for many reasons. Your hotel is going to be found on booking channel websites such as TripAdvisor, Booking.com, Trivago, etc which are typically the first website most travellers will look to when booking their next holiday.
These websites will typically be incredibly well optimised for search engines, so finding them on the likes of Google and Bing isn’t usually a problem.
Furthermore, their overall brand equity in the tourism market is significant that hotels and tourists flock to these websites without question.

However, as these platforms grow and tourists become more familiar with them, direct bookings for hotels tend to take a back seat and become less of a focus.

And that’s where we think hotels are making a mistake by willingly giving up the advantage to OTA’s.

But not only do direct bookings bring many advantages to the hotel itself, but also for the guests.

Instead of giving up a commission to OTAs, we think hoteliers should make the investment in direct bookings, and the associated online booking engine, to build a long-term sustainable future for their hotels.

A survey conducted in 2021 stated that consumers were starting to shift away from booking with OTA’s with 17% of those surveyed preferring to book with them.

This was largely due to the inability of guests being able to make adjustments to their bookings if they were cancelled or delayed due to lockdowns.

Below are some reasons why we believe hoteliers need to start focusing on direct bookings if they haven’t already.

Decreases Acquisition Costs

OTA’s revenue model is commission based and each booking via their platform can accrue commission costs ranging from 10-30%.

Without taking any paid marketing costs into account, you can save on this increase in your direct revenue share by focusing on direct bookings.

Regardless if you use other services or various discounts to prompt travellers to book with you, your acquisition costs will still work out to be lower.

This allows you to not only keep more of your revenue but allocate that 10-30% to grow your business through other strategies such as digital marketing and other general marketing campaigns.

It’s Your Customer

Typically, those guests who book with you directly will almost certainly become loyal guests and book again, or at least, refer you to their friends and family.

You’re also able to offer them unique specials that OTA’s simply cannot which makes booking direct instantly more appealing.

These might include offers associated with a restaurant or bar that is part of the hotel, earlier or later check-ins, an extra night's stay or upgrade, and much more.

OTA’s such as Booking.com may only be able to offer you a free upgrade on a room or certain terms & conditions around when you have to pay for your booking.

But, what’s important to remember, is that these sorts of flexibility in offers are what your guests want too. 

For example, when your guests book direct through your hotel's website, you have the opportunity to reward them instantly which will begin building that loyalty with you.

Furthermore, once they have booked, and assuming they’ve given you permission, you can use their data to market to them through other channels such as email, social media, etc.

Your Brand Will Be Protected

Despite the fact that you need to acquire bookings to increase hotel revenue and profit, you also need a brand in the market that allows you to stand out from your competitors.

If you have done this correctly, potential guest who visits your website will instantly recognise this when they land on your website.

This includes everything from your logo, font, style of writing/copy, the names of your rooms, etc, and contributes to the guest's experience when interacting with you.

Compare this to OTA websites where all hotels and rooms are displayed the same, your hotel will only become part of the noise and thus not stand out as it should.

A study conducted in 2010 found that the period of time in the lead-up to a holiday is more enjoyable than the holiday itself.

When guests book direct with your hotel, you will have the ability to manage the entire booking process which includes everything from the pre-booking emails and communications, to the post-booking emails and communications.

From the second they land on your website to the moment they make their booking, there is a wide range of touchpoints from your hotel to interact with them to ensure they have the best experience.

Simply put - by investing in your direct booking strategy, you are also investing in your brand.

Direct Access to Your Guests

If your hotel has worked with OTAs before, then you’ll almost certainly be aware that you’re unable to market to your guests that have been acquired through these platforms.

This includes any direct communication outside of the booking platform such as emails, phone calls, and social media.

What this essentially means is that these booking platforms own your guest's data instead of you.

From a data perspective, we believe that this puts your business at a disadvantage to maintain and grow revenue.

By having a strong direct booking strategy, you are ensuring you can access & use your guest's data at any time without any hindrance.

This includes their contact information, booking preferences, booking history, and more.

By using this data, the possibilities to grow your customer & revenue base are significant including sending pre and post-booking emails, to retargeting them with specials through paid advertising.

Both you and your guests win when you have direct access to them.

In short, when you make driving direct bookings a focus, you have the opportunity to build stronger relationships with guests and save money on acquisition & commission costs.

All of this equates to a long-term, sustainable future for your hotel and contributes to increasing your direct booking percentage and revenue overall.

RoomStay
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