Hotels step up their online game to encourage direct bookings
Getting guests to book directly on a hotel’s website rather than through an online travel agent (OTA) is a key challenge that hoteliers are trying to tackle
When OTAs first rose to popularity in 2008 during the economic downturn, hotels viewed them as saviors for their ability to fill hotel rooms that otherwise would have remained empty. Today, that view has shifted dramatically.
Popular third-party search engines are raking in more bookings than ever and charging significantly higher commissions, too. In fact, momentum toward convenient aggregate websites has grown to such a fever pitch that in 2016 OTA bookings in the U.S. outnumbered hotel website bookings for the first time in history.
Not only are hotels losing out on a cut of the profits when they pay commission to OTAs, but they’re also giving up the immeasurable value of being able to ‘own’ the relationship with a guest before they even reach the front door. Hotel owners aren’t taking this new relationship dynamic lightly. Instead, they’re wielding their own websites to encourage their customers to book directly.
“Hoteliers understand how important it is to create memorable in-person experiences at their properties, which inspire guests to return in the future,” says Andrea Grigg, Executive Vice President with JLL’s Hotels & Hospitality Group. “But today, the game is increasingly about leveraging their online assets to inspire them to come to the hotel in the first place.”
Many consumers are drawn to the promise of a good deal — especially one they can find conveniently using an OTA, which aggregates offers, reviews and amenity details. This desire for convenience and one-stop shopping has been fueled, at least partially, by changing demographics.
More than a third (36 percent) of OTAs’ primary customers are between the ages of 25 and 39. Millennials are less motivated by loyalty programs than Gen Xers and Boomers, and are more influenced by the convenience and value of viewing multiple properties and offers in one place.
“The reason that many OTAs market rooms better than hotels is because they give consumers everything they’re looking for — reviews and recommendations from other travelers, detailed amenity information and realistic photos — all in one place,” said Vanessa Vega, Global Director, Hotel Distribution & Connectivity at Premiere Advisory Group. “Hotels should emulate OTAs efforts to be a one-stop shop and ensure they give travelers everything they need without needing or wanting to look at other sites.”
Hoteliers are increasingly focusing their energy and marketing spend on winning the online battle for millennials and other frequent OTA shoppers. Consider Marriott’s #itpaystobookdirect campaign, or Hilton’s “Stop Clicking Around” initiative, which offer loyalty members discounts for booking directly. These heavyweights aren’t the only ones investing in digital marketing. According to a survey of global hotel leaders by hospitality marketing platform SiteMinder, nearly half anticipate “high spending” on digital marketing in the year ahead.
With more online marketing campaigns from big hotel brands hitting the market in coming months, their success depends on having the right digital infrastructure in place to convert clicks into bookings. Consistent messaging, a seamless reservation process and interactive solutions are all key to helping hotels improve online booking rates.
“When you’re investing in digital marketing, you need to make sure the messaging will drive people to your site — and then keep them there,” says Vega. “Pretty pictures don’t necessarily drive bookings. Too many hotels focus too much on design and not enough on the actual booking process, which ultimately drives consumers back to the OTA when they’re ready to book a room.”
Instead, hotels need to give potential guests what they want — a glimpse of their unique amenities and property features so they don’t have to click around to find the information they’re looking for. “Today’s consumers want to click two or three times and be done with their purchase,” she explains. “If you force people to scroll and look too much, you’re making it easier to book via an OTA.”
And while many hotels offer personalized services for guests during their stay, they need to apply some of those principles during the booking process. Big data-driven technology offers comprehensive insights into what interests individual website visitors to create a customized experience. For example, a value-conscious traveler may be more comfortable reviewing room rates listed from least to most expensive, while experience-oriented travelers may be more intrigued by room-specific amenities or packages rather than pricing.
Leveraging more interactive technologies can also go a long way, like using a chatbot during the booking process to make reservations more personal, and sending automatic follow up email offers to guests who haven’t booked yet.
The rewards of getting it right more than justify the work required to encourage direct booking, Grigg believes. “Even if a traveler is planning to book through a third party, chances are they’ll go to the hotel’s website for more information,” she says. “Once they’re there, that’s the opportunity to capture them. Make sure they know they’ll get the best price or extra amenities that they can’t get elsewhere.”
While OTAs will continue to attract digital natives booking their next hotel stay, hotel brands have an opportunity to level the playing field by creating the best guest experience possible on their website.