As time progresses, direct bookings are becoming an integral part of every hotel’s distribution mix.
NB: This is an article from innQuest
After all, paying hefty commissions for third-party bookings isn’t the most desirable way to handle business. Even if you’re saving 10% in commission, that’s still a 10% increase in revenue. Hoteliers across the globe understand this and are now focusing on how to get more direct hotel bookings for their business.
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However, before we proceed further, let’s be clear that booking sites and agencies aren’t a total loss. These platforms offer multiple benefits for the price paid, including marketing and exposure to global markets. Small-size B&Bs and independent hotels that cannot afford to market their brands at such a massive bandwidth are sure to benefit from this option. Nevertheless, it shouldn’t mean that one must not be proactive in encouraging direct hotel bookings.
As rewarding as it sounds, consistently pooling in direct business is one of the biggest challenges for hoteliers. However, when done right, creating a fair balance between direct and OTA bookings is achievable as well as profitable. This article dives into the importance of direct hotel bookings and shares expert tips to achieve the best results.
What’s All The Hype About Direct Bookings?
A 2021 GlobalData Survey shows an evolved travellers’ approach towards hotel bookings post-COVID-19: It shows 39% of tourists are now interested in booking directly, whereas only 17% prefer to contact OTAs.
This major shift in customer preferences has increased every hotel owner’s chances to attract more sales and maximize revenue!
Direct Bookings: Overview & Benefits
Every hotel distribution strategy consists of multiple channels to pool travel and leisure customers, including Online Travel Agencies (OTAs), metasearch engines, and hotel websites. The most profitable of the three is direct hotel bookings i.e. wherein guests directly reach out to the hotels for all accommodation-related queries and make a reservation.
Tourists nowadays seek the most flexibility possible, and direct booking channels’ flexible terms, the scope for last-minute changes, and instant refunds are winning their hearts. But are direct customers more profitable for hoteliers too? Yes, it’s a classic win-win situation. Here’s how:
Zero Third-Party Commissions:
First-hand transactions with customers help your business save any excessive commission paid to third parties and agencies. On average, OTA platforms charge about 10-30% in commission per booking, affecting the business’s profitability by a margin.
In contrast, a direct sale closed organically or through seasonal offers and discounts, still involves a lower customer acquisition cost.