Conversion rates and abandoned reservations have always been a challenge for hotels, more so than in most other industries.
NB: This is an article from The Hotels Network, one of our Expert Partners
The average hotel website converts somewhere between 1.5-2.5%, lower than other popular e-commerce industries like haircare and health & beauty, which both convert at more than 3%. Additional data shows that over 80% of travel bookings are abandoned, compared to the general average of around 70%.
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The bottom line is that hotels can lose millions of dollars in revenue due to abandonment, especially when you also consider that guests may book a room before delaying payment, and then canceling altogether. This means the room was unable to be booked for the 24-48 hour period in which the guest was deliberating upon and ultimately abandoning their purchase.
With direct bookings performing strongly in the market and seemingly on track for further growth, it’s never been more important for hoteliers to boost conversion rates and reduce abandonment.
Hotel website booking volume in the green for 2023
SiteMinder’s Hotel Booking Trends shows that hotel websites sit at #3 for booking revenue in a majority of markets around the world, and #2 in a select few.
If direct bookings continue to grow, and surpass OTA bookings, it would represent a huge shift in traveler booking behavior and a meaningful opportunity for accommodation providers.
To this end, it’s important for hoteliers to ensure they’re investing in the best technology that will allow them to optimize the direct booking process and provide a personalized user experience.
Booking abandonment is an unfortunate reality
While travelers may be leaning more towards booking directly with their host, accommodation providers face a unique hurdle when it comes to keeping prospective guests engaged.
Because booking a trip is such a complex multi-step process, it can take a lot of time to complete. TripAdvisor found that 80% of travel research takes more than four weeks. Throughout this time a traveler is visiting multiple sites, and may even start and stop a booking process multiple times along the way. This means it will be very hard to ever fully eliminate booking abandonment.
When we look at the top reasons why guests flee from the check-out process before confirmation, we start to see a clearer picture of what can and can’t be effectively solved by a hotelier. These include:
- The need for more time to research or compare offers
- The need to communicate with other travelers in the group
- They are frustrated by the complexity of the process
- There is a lack of good payment options
- They encounter an error or technical issue
- There are fees that only appear when final payment is asked for
- They are being asked for too much unnecessary information
- There is nothing to convince them that this hotel is the best choice for their stay
There’s plenty here for hoteliers to focus on and improve, which can help shift the needle on conversion.
If we dig deeper into customer friction and what causes frustration, it can come from:
- Slow load times
- Limited direct communication options
- Too many personal and payment details required
- A lack of intuitive functionality
- Offers are irrelevant or generic
- Poor mobile optimization
Multi-device optimization is particularly important, given 55% of all online traffic is now via mobile yet the abandonment rate on mobile is even higher than normal, at 85%.
