Hotels have experienced a surge of direct bookings during the pandemic.
NB: This is an article from Altexsoft
Yes, while the overall number of bookings dropped due to COVID-19, a group of hotel-branded websites became the third most popular booking channel, in some cases even surpassing Expedia traffic. Why is that?
The overall uncertainty revealed the lack of trust travelers have for OTAs. In search of relevant, up-to-date information, people feel more confident on a hotel’s website: Is the property open? What are their hygiene protocols? Are there any restrictions they need to know about? And with local travel on the rise, it’s become easier to just call the hotel.
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Yet this increase in direct traffic can’t tip the scales in a hotel’s favor. OTAs are too strong of competitors to back off, so hotels still need to know how to capitalize on their offers and increased traffic. Here, we will talk about some of the strategies hotels are using to drive direct traffic and turn it into sales.
Direct booking strategies for hotels
Let’s quickly recap why direct bookings are so important for hotels. The reason is simple — it’s simply cheaper to sell rooms on owned channels rather than on a third party’s. Hotels pay OTAs 15-30 percent of fees per booking and due to rate parity, they can’t put lower prices on their branded websites. So, each sale made directly on the hotel’s website brings up to 30 percent in increased revenue.
Since hotels can’t attract customers with better prices, they must find other ways to do it. Many of direct sales boosting strategies fall into one of the following categories.
Strong branding. For customers to type a hotel’s name into the search bar instead of going to Agoda, a hotel should have a unique selling proposition. It doesn’t have to be an Eiffel Tower view or a star chef. The most common scenario is providing small but convenient perks like self check-in, complimentary dinner, or a beneficial rewards program. By the way, rate parity doesn’t apply to loyalty program members, so they often get lower rates.
Extensive promotion of direct bookings. Hotels should shout out the benefits of direct booking at the top of their lungs. On the website, on social media, in ad campaigns — potential customers should have tons of touchpoints with your brand at every stage of the user journey and know that it pays off. You will further see that marketing is the most influential tool big hotels brands use.
Revenue management tactics. While the previous strategies work for customer acquisition, revenue management helps yield the most value from those customers. By using analytics and keeping track of hotel KPIs, properties get insight into customer behavior and know how to accurately price their offerings.
Now, let’s see how direct booking strategies help hotels succeed.