Hotel Revenue Management

Direct Bookings: The Myths and the Facts

Hotelogix

Hotels just can’t get enough of direct bookings, it’s no secret. In a day and age where OTAs dominate the online market and hotels pay for each booking with a hefty commission, the importance of the native website has never been greater.

The direct booking engine provides independent properties with a portal to generate commission-free bookings. And with competition in hospitality escalating rapidly, every dollar that makes it to the bottom-line helps contribute to other crucial marketing activities.

Infographic - Increase direct bookings

Having said this, it’s imperative that you recognize the importance of all booking channels and implement a balanced distribution strategy. Despite all their shortcomings, even expensive portals like OTAs do have their benefits – leaving them out of your distribution strategy will turn out to be a costly mistake! It’s important that we understand why, before we move on to direct booking strategies.

Myth: Direct bookings are always your most profitable

Fact: Your profitability depends on your channel costs

When it comes to evaluating the effectiveness of your distribution strategy, it’s important that you measure the performance of each booking channel. A great way to start is by collecting objective information about every channel – revenue generated, demographics, costs associated with each channel and so on. Once you have this information, you may uncover some surprising facts.

This is better understood with an example. Let’s say your 100 room property’s website hosting, SEO and SEM fees come to $100 a month. If your booking engine delivers 100 direct bookings, the effective cost of each booking is $1. But if you only get 10 bookings through your website, you would have paid $10 per booking – a tenfold increase in cost!

In the real world, it’s highly unlikely that a hotel can sell all rooms via its direct booking engine unless it heavily invests in marketing. It’s a bad idea to rely on such an unstable platform – that’s why the best distribution strategies optimally divide rooms among all available sources. So while it’s always great to attract as many direct bookings as possible, don’t invest all your resources to this end.

Myth: There’s no need to invest in your website if you’re present on OTAs

Fact: Optimizing your hotel website for traffic and conversions is essential

In order to attract more direct bookings, you first need to ask yourself – why would guests visit your website in the first place? Aren’t they more likely to discover your hotel on an OTA, considering that they massively outspend your marketing efforts? The answer is yes.
However, guests often visit a property’s own website after seeing it on an OTA. They may do this to learn more about the hotel, its amenities and other details because online agencies don’t typically list all the property’s facilities.

Make sure your website is well-designed with plenty of pictures of the real-estate, amenities, rooms, lobby and so on – the more the better! Don’t skimp on details either, ensure that every single service your hotel provides is listed.

There are two major stages to optimizing your hotel website

1. Optimizing for traffic: Google prioritizes value so provide users with informative, relevant content. Having a blog is a great way to stay relevant and enables your website to rank higher for more terms. Investing is SEO and SEM is good too, but you’ll need to validate the methods being used. Any black hat strategies can severely harm your website’s position. It’s best to educate yourself on the latest Google algorithms and stay updated. Remember that this can be a slow process so don’t expect an overnight transformation!

2. Optimizing for conversion: Having a steady stream of traffic is great, but it’s not going to make much difference if your website isn’t properly optimized for conversion. Ensure that your call-to-action is clearly visible, yet not obtrusive to the visitor. A price comparison pop-up is also a great way to encourage bookings, as is a ‘best price’ guarantee – guests feel more confident to make a reservation when they know that they’re getting a good deal. Design attractive packages and if possible, throw in a ‘reward’ for booking direct. This could be loyalty points or a room with a better view – the relationship it helps you create is worth the cost incurred!

Remember that the most important aspect in your hotel’s success is the guest experience. When you provide guests with an unforgettable stay, they’re more likely to remember your hotel – and more likely to book direct the next time, even if they came through an OTA. Even guests that booked direct aren’t going to visit again if they weren’t satisfied with the experience.

Invest in reliable technology like a cloud-based property management system that helps your hotel streamline operations and boost efficiency. Beyond enhancing productivity, such a system will also help you in other aspects of your business, like review collection and much more.

Click here to take a free trial of Hotelogix’s cloud-based PMS.

About Hotelogix

Hotelogix is a unique, cloud-based, end-to-end, hospitality technology solution, built to seamlessly manage hotels, resorts, serviced apartments or multi-location hotel chains, by providing a single window to manage all hotel operations and bookings (online and offline). Hotelogix is currently used by properties in 100+ countries.





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