It has become pretty clear by now that millennial travelers are here to stay. Sure, Gen Z is quickly catching up, but millennials are still leading the race and hospitality is going above and beyond to adapt to this particular generation of consumers. Driving millennials to a hotel and keeping things as personal as possible has become a priority for hotels and, naturally, this includes direct bookings.
What happens though when millennials choose OTAs rather than booking directly on the hotel website? Unfortunately, this is not a rhetorical question, but a reality. Studies show that indirect bookings are on the rise – by June 2016, 27% of all U.S. hotel bookings were indirect, up from 23% two years earlier. Also, a report by the American Society of Travel Agents (ASTA), shows that about 30 percent of millennials reported using an online travel agency in the last 12 months – in addition, more than 45 percent indicated they would recommend using OTAs to friends or family.
For hotels, this means paying fees to a third party, which cannot be completely avoided, but it’s definitely not the most desired thing in matters of revenue. Giants like Priceline and Expedia have gotten to the point where they can afford to charge even up to 30% in commission.
It’s obvious now that the primary competition is no longer the one between hotels, but rather between hotels and OTAs. In this case, one question arises: what can hoteliers do in order to win the battle and drive millennials towards direct booking?
Once more, our favorite subject is the answer. Your hotel’s reputation is undoubtedly something that can influence the booking process, especially in the case of millennials. It’s a well-known fact that millennials, more than any other generation so far, are relying on the online world to search, book, and promote their travel.
