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3 Ways Direct Bookings Drive Profitability

Posted on Jul 11, 2017 12:55:21 PM

 

Direct bookings reduce your acquisition costs and increase revenues.

A recent Google survey found 52 percent of travelers who book hotel rooms online through an OTA first visit the hotel’s website for more information. At this early stage in the buying journey, travelers are considering price and ease-of-booking, while also assessing the hotel’s website to get a real feel for what it’s like to stay there.

Setting aside pricing for a moment, do you have a website that’s compelling, easy to navigate, and inviting enough for a guest to book directly with you? Is your booking engine fast, and simple to use on mobile-devices? Do you provide imagery and videos on your website to give potential guests a better sense of your property?

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While relying on OTAs for better market reach or for selling excess inventory is often a good strategy, it can also lead to reservation cannibalization. As travelers who could have booked directly on your site leave to book on the OTA site, profits can plummet. Not only is this decrease in profits a big problem, but guests who book directly with you are more likely to rebook in the future and feel a sense of loyalty with your property. Therefore, losing a booking to an OTA can also mean decreased customer loyalty.

Direct bookings decrease your guest acquisition cost. 21 percent. That’s the typical acquisition cost for a guest who books accommodations at your property through an OTA. If that same guest books a stay through your property’s website, the cost drops to anywhere from 8 to 14 percent, even when accounting for the marketing spend needed to get them to your site in the first place.

Direct bookings mean relationship building. Once a guest books directly, you have an account for them in your system. True personalization can begin. Maybe you email them before they arrive to understand their preferences with regard to your amenities. Is the guest celebrating a special occasion? Will the guest visit a local attraction with family? Maybe your guest is a business traveler who prefers fresh coffee delivered every morning at 7:00 a.m. Personalized service builds relationships, trust, and most importantly, repeat business

Direct bookings improve your value offer. Once you’ve begun to understand and respond to your guests’ preferences, you can offer real value that is relevant to them. Having member rates and rewards programs is great, but maybe you find some guests would simply prefer later check out times, or a glass of wine on arrival. Maybe you know that your business traveler guest attends conferences in the area, and needs a best rate guarantee to justify coming back. Once you personalize and begin building a relationship, you can provide true value and dramatically improve the chances for loyalty.

Not all guests are created equal. Not only are “direct guests” less expensive to acquire, but they’re more valuable as you begin to tailor service to fit their needs, and drive loyalty. Not only do OTAs deliver bookings, they can actually help drive traffic to your site and booking engine. It’s up to you to convert that traffic into bookings.

Would you like to optimize your direct booking engine and increase direct bookings?

See How Pegasus Solutions Can Help Your Hotel

 

Topics: Blog, booking engine, direct booking, profit

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