2 Winning Initiatives for Hoteliers wanting to Increase Direct Bookings

The hotel online booking scene, for Hoteliers is a mixed basket, holding both difficulties and opportunities. In layman’s terms, the following are obvious:

Getting the negative out of the way:
Hoteliers are fighting a losing battle against Internet Savvy and Big spending OTAs and MetaSearches for the attention of online shoppers because:

1. OTAs and MetaSearches buy all the top search results on Google

2. In many cases, online shoppers skip search altogether, starting their shopping journey for a hotel on an OTA or Metasearch website.

How much are OTAs spending on advertising?
“Priceline Group increased its advertising spending 34.5 percent to nearly $2.6 billion in 2014 while Expedia Inc.’s 2014 advertising expense jumped 33.3 percent to $1.6 billion“ [Skift]

         – How many independent Hotels or Hotel chains have such an advertising budget?

Another area where Hoteliers are challenged is shrinking direct bookings originating from call-ins [making online direct bookings more important then ever.]

Focusing on making a Positive impact :

Successful Hoteliers go back to basics when it comes to Increasing Direct Booking, by taking initiatives to:

A. Incentivize online shoppers, year-round, to Book Direct by offering loyalty and membership programs, free WiFi, free upgrades, free [and discounted] goodies at the bar, spa or restaurant etc.

B. Leverage new technology solutions, on their website to engage and direct more shoppers to the Direct Booking channel.

Such initiatives help hoteliers cover two bases:
1. Get the word out that the best deals are at the hotel websites [not the OTAs]
2. Turn their customers to loyal followers and repeat customers.

- Which of the above initiatives has your chain, or independent hotel taken in 2015 to Increase Direct Bookings?

Solution:
BookingDirection’s technology works on your Hotel’s website to Increase Direct bookings by providing online shoppers the OTA web experience and price transparency they have grown to like — e.g. showing them “all” the prices in the marketplace, and proving that the hotel has the lowest price. In so doing, the need to comparison shop is eliminated.

Why pay commissions to OTAs when you can get more direct bookings?

Bottom line, EARN MORE by, increasing the percentage of website shoppers booking directly with you and reduce commission payout to OTA’s.

We’re in closed beta, helping hoteliers to get more direct bookings.

We launched Q1 2015 and are busy helping hoteliers increase Direct Bookings on their websites. Due to the overwhelming demand and positive response, we have a small backlog.  >>> Add your hotel to the implementation queue and we’ll get back to when your turn is up.

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Images by: Play Among Friends Paf Richard Masoner

Hoteliers are calling out the OTAs ‘Best Price’ Bluff

Top 2 value propositions OTAs have been selling to shoppers are :

1. OTAs offer most variety and options….maybe
2. OTAs offer Best Price….. now that’s a Bluff!

Shoppers, at least for the most part, are NOT aware of Rate parity provisions imposed by OTAs on hoteliers, putting hotels prices across channels, from the hotel’s own website to the OTAs websites in parity, offering hotel accommodation at the Same exact Rate = Price.

Some say Rate parity helps hotels avoid confusion over price points across different distribution channels. That might have been a positive point IF the cost of securing bookings across these channels was similar.

Problem is, with OTAs commissions ranging from 15-22%, their impact on revenue margins makes the OTAs distribution channels very expensive.

Rate parity is indeed an obstacle for a hotel that wants to differentiate between distribution channels, for example favoring a particular channel likeDirect Bookings on it’s own website, training shoppers to go there for the best price.

It is not a surprise that one of the hottest topics for Hotel Revenue managers now is, Increasing Direct Bookings on their hotel websites, and relying less on OTA bookings to improve revenue margins.

2 Important facts we know about online Shoppers for hotel accommodations:

A. Price is King: With 85% of travelers surveyed saying that PRICE is the most important factor when determining where to book. [according to a Google research]

B. They [Online Shoppers] are on YOUR website: 52% of shoppers will visit your hotel’s website after seeing you on an OTA [according to a Google research]

How do we make A+B above work for hoteliers: Call the OTAs Best Price Bluff!
We will show those 52% of shoppers that saw your hotel on the OTA a price comparison, proving rates are the same or higher on OTAs [remember Price Parity], removing their motivation to return to the OTAs to book with no savings. Why buy from a distributor or a re-seller when you can buy from the source, when you’re right there, on the hotel’s website, especially if the price is the same?

Solution:
BookingDirection’s technology works on your Hotel’s website to increase direct bookings by providing online shoppers the OTA web experience and price transparency they have grown to like — e.g. showing them “all” the prices in the marketplace, and proving that the hotel has the lowest price. In so doing, the need to comparison shop is eliminated.

Bottom line, EARN MORE by, increasing the percentage of website shoppers booking directly with you and reduce commission payout to OTA’s.

We’re in closed beta, helping hoteliers to get more direct bookings. Join the waiting list and we’ll contact you once additional hoteliers are added.

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Image by: Play Among Friends Paf

OTAs, Friend or Foe? How are They Killing your Direct bookings?

OTAs are dominating online travel booking, in many cases accounting for 76% of hotel bookings online and in some cases a lot more.

In this reality, many hotels rely on OTAs for booking rooms, which raises 2 questions:

What is the cost?
Is there alternative?

-Before answering these questions, for those who don’t know, let’s take a closer look at a some OTA facts:

Booking.com, owned and operated by US based Priceline. 
Booking.com offers online accommodation booking. It claims to have over 540,000 properties globally under contract and that it deals with more than 700,000 room nights reservations per day. In 2013, it accounted for more than two thirds of Priceline’s revenue. Booking.com is available in more than 41 languages [Wikipedia]
Some more figures:
Booking.com’s parent Priceline.com, with a US$ 52.79 Billion market cap, has an estimated annual revenue of US $8.5 Billion for 2014 [businessweek.com]
Expedia: with a US$ 10.56 Billion market cap, has an estimated Estimated annual revenue of US $5.7 Billion for 2014 [businessweek.com]
Orbitz, with a US$ 1.01 Billion market cap, has Estimated Estimated annual revenue of US $937 Million for 2014 [businessweek.com]

-Looking at these numbers, it is clear OTAs are highly specialized and effective online booking machines, backed by the financial strength a few hotels posses. Competing head to head with them on online traffic, at least in most cases, would be in the worst case scenario a suicide, otherwise a sum zero game.

Industry Facts:

Most shoppers BEGIN their shopping for hotel accommodations at the OTAs, who happen to control a substantial percentage of travel and hotel traffic online [=fill top search results] At 85%, PRICE is the most important factor in selecting a hotel.[according to a Google research] 76% of online bookings happen through OTAs leaving only 24% who book directly. [according to a wihp reserch] 52% of shoppers VISIT the Hotel’s website as part of their research, PRIOR to booking [according to a Google research]

Looking at both the OTAs and Industry facts, brings me back to the 2 questions at the top of this post,

Q: What is the cost?

A: OTA’s charge between 15-22% (And sometimes even more) commission for every booking, that translates to a big monthly check hotels cut and send to the likes of Booking.com, Expedia, Orbitz etc.

Q: Is there an alternative? 
A: Yes, Get More Direct Bookings
76% of online bookings happen through OTAs however 52% of shoppers will visit your hotel’s website after seeing you on an OTA and before making their reservation elsewhere. Why not stop them on your website and make them buy directly from you? Why pay commissions to OTAs for indirect booking?

Solution:
BookingDirection’s technology works on your Hotel’s website to increase direct bookings by providing online shoppers the OTA web experience and price transparency they have grown to like — e.g. showing them “all” the prices in the marketplace, and proving that the hotel has the lowest price. In so doing, the need to comparison shop is eliminated.

Bottom line, EARN MORE by, increasing the percentage of website shoppers booking directly with you and reduce commission payout to OTA’s.

We’re in closed beta, helping hoteliers to get more direct bookings. Join the waiting list and we’ll contact you once additional hoteliers are added.

Image by: haley7