For almost twenty years, we as hoteliers have first of all ‘spilled all of our sweeties in the lobby’ and gave the OTAs our life and soul, and then for the last 15 years, we have been trying desperately to win that business back!
NB: This is an article from Right Revenue, one of our Expert Partners
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There have been hundreds, if not thousands of articles posted over the last few years on how to drive direct business, but I guess the fundamentals remain the same:
- We need to reduce our cost of customer acquisition (commission)
- Reduce under-cutting and OTA price wars
- Own our customers
- Ensure that we are in control
With all of that great advice out there, the best advice remains the same:
1: Start with great website design – Make your navigation clear. Keep descriptive text to a minimum on your main pages (I promise, no-one wants to read paragraph after paragraph of how wonderful you are). Concentrate on great imagery and what makes your hotel special. Your guests want an experience – make it aspirational.
2: Ensure you have a great booking engine – And that may or may not be the one provided by your PMS. You decide but remember that there are specialist companies out there who will grow your direct business. Don’t focus too much on commission (circa 4-7%) and remember that paying commission to acquire direct business is good! You only pay when customers convert and the costs are at least half (if not more) than what you pay for a booking through OTAs. Get the best-in-breed and watch your top-line revenue increase and your cost of acquisition reduce – trust me, then you will be happy to pay a commission!
3: Invest in digital – You can’t expect direct bookings if you are not ‘present’ and that means bidding on both your brand name and generic search terms. Engage with a specialist company and make sure you are asking the right questions!
4: Make sure you have the best rates online – Rate parity is a thing of the past. Add a supplement for your OTA’s or include an added incentive to book direct.
5: Know that you will be undercut – Empower your team so that if they get a call at Reception saying, “I have found a better rate online than on your brand website” – allow your team to match or undercut the rate eg take 10% off BAR – better that, than loose the booking to OTAs at 18%!
6: Review your cancellation policy – Never, ever have a more flexible rate on an OTA than you do on your website.
7: Come off Genuis – Trust me, it is making an idiot out of you!!! Make no mistake, Genuis was not invented to help you, the hotelier. Nor is it there to support your customers. It is there to make Booking.com more money. Come off it and I promise, your business will not be affected.
8: OTAs are not always evil – They help you reach markets that you could never possibly reach, so use them! Use them in the same way as you use other distribution channels ie to get business when you need it. If you are driving strong business direct then restrict or even better, close them out. If you need help, then add some availability. You don’t need to give them every room type, all of the time. You are in control.
9: Getting your first booking through an OTA can be a gift and the commission paid contributes to the cost of customer acquisition – But if that same valued customer comes back to you a second time through an OTA then shame on you… You have a guest date after the first stay and data is like gold dust. Use it! Segment it and communicate!
10: Remember that we do hospitality better than anyone – We know how to make our guests feel special. We know the experiences they will want. Design clever packages around these experiences. Turn every moment into a memory. An OTA cannot do that, so use that to your advantage.
My final thought is that if you do decide that ‘Book Direct’ is a focus for this year, then remember that it will require not only hard work and a strategy to back it up but also understanding that there will be costs involved. These may be close to the commission you are already paying, but this financial hit will be short term and you will in the end. I promise…
