NB: This is an article by Pete DiMaio of Fuel Travel
We recently met with a hotel whose occupancy was comprised nearly 50% by OTA bookings. One out of every two guests was costing them at least 20% commission. Aside from the obvious hit to their RevPAR and issues maintaining a competitive ADR they were also missing out on building their most valuable asset: their guest history.
Unfortunately, this property is not entirely unique. Far too many hotels and resorts rely on the OTAs for far too great of their occupancy. Even the properties succeeding with in-house bookings could benefit by chipping away at their OTA percentage. Here are five ways you can make an impact on your RevPar, reduce costs, grow your database, and improve guest satisfaction. Implement these and we guarantee you’ll find your OTA percentage drop while occupancy grows!
1. Data Mining
Rome was not built in a day, nor do we suggest you cut off the OTAs all at once. What we do suggest, however, is creating a data mining strategy to ensure that when a guest checks-in from an OTA you set yourself up to have that guest book direct in the future. Start by ensuring you are capturing your guest’s contact information, primarily email, at check-in. The more data you can associate with your guests’ the better. Your goal is that you never have a guest check-in and check-out still appearing as an “Expedia Booking.”
2. Exclusive Benefits
At the end of the day your guest is going to make the decision that is best for them; therefore, the more value you can provide to your direct bookings the better. This not only reinforces the value to your current direct bookings, but also incentives your OTA bookings to make a better choice in the future. We have found the following very effective at driving direct bookings:
- Best Rate Guarantee: Give your guests a confidence boost that they made the right choice with a “best rate guarantee”. This can be as simple as a price match or, what we have found very compelling, a 10% bonus. The only way to qualify for the guarantee is to book direct. Here’s the most important part… Make sure everyone knows about it! Promote your guarantee on your site, in your marketing materials, on your social profiles, and wherever else you might be marketing.
- Late Checkout: Sure, this may have an impact on operations. But, if you can make it work, adding an hour to the check-out time for direct bookings is a big incentive. You can do this either by extending your direct bookings, or by reducing your OTA booking check-out times.
- Membership Has Its Privileges: Loyalty programs are a big driver in both data mining (above) and direct bookings. If your PMS has the ability to create membership levels, do it.
- On-Property Incentives: Offer exclusives on property to your direct bookings – be it a free cookie and water at check-in, discounts on dining, or an enhanced experience through a property app. Make your direct booking guests feel extra special and you’ll soon find you have many more of them.
3. Post Stay Targeting
Keep in touch with your guests (OTA or direct) after their stay and prior to their next stay. We have several clients who have begun a targeted email campaign post stay to OTA guests letting them know they can improve their experience on their next stay. These same clients are targeting their OTA guests with a special message 60 days prior to their booking anniversary to convert them to direct bookings. Both tactics have proven to be very effective at triggering OTA guests to change their behavior and book direct. Obviously the data mining recommendation comes in to play here and we would like to reinforce the importance of getting the data while your guests are on property.
Ah, brand PPC search. There is an ongoing debate over whether it is necessary or not. Our research, and that of countless others, have shown that brand PPC is effective and provides a return greater than just PPC or just the natural search alone.
Brand PPC is critical in terms of reducing your reliance on OTAs. Why? Because a customer who is nearing the end of the booking process makes a majority of the brand searches. Allowing the OTAs to own the search results page that close to a conversion is inviting your customers to book elsewhere.
We recommend testing brand PPC if you are not already and make sure that when your customers are ready to book, you are front and center.
5. Compete Head to Head
Hotels looking to reclaim there direct bookings need to take the fight to the OTAs and, lucky for you, there are several tools that allow you to do just that. In 2015, Google made a major push in their Hotel Price Ads (HPA) and TripAdvisor unveiled their InstantBook program. Both of these programs allow independent hoteliers the ability to compete side by side with the OTAs.
- Price Parity: The most important strategy any hotel can implement to drive direct bookings is to have the best rates. If an OTA has a better rate, as in the adjacent screenshot, customers will not book direct. The cornerstone of competing head to head with the OTAs is to ensure every search on TripAdvisor, Google, your website, or an OTA always results in the best rate being direct with the property.
- Trip Advisor: TripAdvisor’s InstantBook gives individual hotels an unprecedented ability to drive direct bookings through a commission program. This hybrid model is a direct booking, though Trip Advisor is acting a bit like an OTA in that they receive either a 12% or 15% commission on each booking. InstantBook, when combined with a TripConnect CPC program, creates a very effective barrier to OTAs syphoning off your guests from TripAdvisor. TripAdvisor’s programs can be very effective and often yield a 500+% ROAS.
- Google HPA: Google’s Hotel Price Ads is another way to compete head to head and ensures when a customer is searching for room rates, you appear alongside the OTAs. Campaign configuration is critical with Google HPA and when implemented properly can help you drive more direct bookings.
BONUS TIP: Ask Them
As a bonus, here’s one extra tip to help drive direct booking: Ask your guests. When you are communicating with your guests – whether at the front desk, via email, on the phone, or online – make sure you are selling the benefits of booking direct. Your customers are smart and will gravitate to the best deal, you just have to make sure that’s you.
Yes, the OTAs can play an important role in your overall occupancy mix and they do have the ability to reach beyond your brand awareness to drive room nights. However, your goal as an operator is to convert that OTA guest to an in-house guest for all subsequent stays.