A little over a year ago, I wrote an article that struck a sensitive nerve: Hotels Promoting Direct Bookings: It’s About Time! Perhaps this is why it was widely shared across social media and republished on various travel industry websites
Whether you are a hotel marketer, an online travel agency or any marketing practitioner interested in online travel distribution, you will know this topic has been controversial for some time already.
So, to summarize things grossly, for the past two decades hotels have been dealing with third-party partners such as Expedia, Booking.com, Orbitz, Ctrip or Travelocity in order to get incremental business, room bookings and revenues. Yet the cost of doing business with these online travel agencies (OTA) is deemed high, mainly because of commission levels but also due to advertising costs and loss of the direct relationship with the customer. As hotels seek to regain better profit margins, one of the key identified solutions has been to cut back on commission levels to OTAs by getting more customers to book direct.
Direct Bookings Come At A Cost, Too
The thing is, for many hoteliers I speak to, in particular independent hotels without the clout of larger brands that can negotiate better commission rates, there is this “magical vision” that steering clients to book direct will be a more cost-effective strategy. While it may make sense on paper, it becomes a different story when trying to walk the talk and implement online marketing strategies that drive traffic, and conversions, to that hotel website. Effective strategies come at a cost:
- Sending out regular newsletter with time-sensitive offers, contests and pertinent content: costs of copywriting, image rights, database management, updating website with content, deploying emails, system licenses (MailChimp, Campaign Monitor, Constant Contact, etc.)
- Continuous improvement with SEO best practices on the hotel website, with efficient transactional funnel and mobile-friendly payment features: costs for programmer, SEO agency, third-party suppliers (channel manager), etc.
- Heavier investment required on Google AdWords campaigns, including dedicated landing pages for increased conversion rates. Cost for ad agency or internal expertise.
- Investment on social media advertising campaigns, including remarketing from website visits, on Facebook, Instagram and Twitter among others. Cost for ad agency or internal expertise.
