In the hospitality industry, we often hear the mantra: “Direct bookings are free.’“ It’s a compelling idea. Why pay commission to online travel agents (OTAs) when you can convert guests directly on your own website booking engine?
NB: This is an article from RevenYou
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Industry voices urge owners and investors to prioritise direct bookings, to fight back against the marketing dominance of OTAs and to view any booking through a third-party channel as a failure.
But here’s the truth: direct bookings are not free. They require significant investment, ongoing effort and a strategic approach. Before you embark on this journey, you need to understand what is involved and how to measure success.
The Cost of Direct Bookings
There is no universal formula for calculating the cost of a direct booking, but industry consensus suggests it starts at 6% and grows depending on digital marketing spend.
This excludes direct booking incentives like discounts and value adds such as complimentary upgrades or free amenities, all of which add to your acquisition cost.
So, while direct bookings will reduce your OTA commissions, they are far from free. They require investment in technology, marketing and expertise.
What It Takes to Grow Direct Bookings
Building a successful direct booking channel means creating a sales funnel that attracts, engages and converts guests. This is not a one-time task; it’s an ongoing process that demands time, money and expertise. The key components include:
Website Excellence
- A visually appealing, mobile-friendly and easy to navigate website that ranks well on Google.
- A user-friendly booking engine that simplifies the reservation process.
- Regular updates to keep your website content fresh and relevant.
- Strategic use of keywords to boost organic visibility across AI platforms and traditional search engines.
Digital Presence
Consistent, proactive engagement with your Google Business Profile.
Invest in paid digital marketing to secure page one visibility in search results.
Refresh photography and video assets to align with current marketing platforms and highlight the property’s unique look and feel, meeting guests’ expectations.
Technical SEO updates including GEO targeting and Schema markup to optimise AI-driven search tools.
