Hopefully you have been reading my articles over the past few years and youre familiar with my point-of-view: hotels who are not using the online channel to sell their rooms are losing out on valuable visibility and revenues.
Here’s why: consumers’ booking habits have changed. When planning for a trip, consumers don’t Google hotels within their destination; instead, they search on the OTAs. So if your property isn’t listed on the OTAs, then your customers won’t be able to find you. And if they can’t find you, they can’t book with you. So if you’re not online already, then stop reading immediately and get your property listed on at least one OTA. I said, “stop reading”!!
Now that that issue is taken care of, we can move on to today’s topic. Like with any other distribution channel, there are very specific ways to increase your bookings and revenues through the online channel. This article will show you how you can become an online superstar, a.k.a. earn the most revenue possible.
Don’t forget about your own property’s website
It is important to make sure that you are directing potential guests to your own property’s site instead of the OTAs in order to avoid the excessive commissions. Just like with pricing on the OTAs, hotels need to ensure that their pricing on the direct channel is optimized using the best revenue management system available. In fact, it can be even more important to have a sophisticated RMS managing your website rates because a property’s direct rates must be highly competitive to ensure that consumers are incentivized to book directly instead of through an OTA.
Inventory must be managed on the direct channel, just like it is on the OTAs. As rooms fill up, new allotments need to be distributed across all online channels. While this can be done manually, it is always more effective to use an automatic revenue management system that will update your inventory in real-time.
A word of caution though… one of the biggest mistakes made by revenue managers is to remove inventory from the OTAs when the hotel is approaching maximum occupancy. Many revenue managers theorize that if the property is already almost full, then they shouldn’t have to pay the high commission rates charged by the OTAs to sell the last few. So, they move all of the remaining inventory to the direct channel and hope that travelers will find the website on their own.
Instead, revenue managers should maintain the property’s presence on OTAs, even as the property is approaching maximum occupancy. In a consumer’s mind, if your hotel is showing as sold out online then your hotel must actually be sold out. Instead of going to visit your property’s website to see if there are rooms available, consumers will just book their stay somewhere else.
I’m sure that you’re all familiar with the idea of sales incentives: giving away a free toaster for getting a bank account, a free TV for renting an apartment, a free room upgrade for booking direct instead of through the OTAs… Oh wait, you’re not familiar with that last one?
Well, you should be. Just like in any other form of sales, consumers must be incentivized to act in a certain way. Hotels should be offering incentives for consumers to book directly, especially since booking directly can often be more complicated and time-consuming than booking through an OTA.
Consider offering room upgrades, free food & beverage, cash-back rewards, free airport transportation, etc. for any guests who book through the direct channel. Promote the rewards on your homepage and on your booking page so consumers will be encouraged to take the time (and get the savings) of booking direct. While you may need to spend $5, $10 or even $20 to get that sale, isn’t it better than losing 30% of the total on OTA commissions?
So what are you waiting for? Optimize your online bookings with these tips and become an online superstar today!
Jean Francois Mourier is CEO and Founder of REVPAR GURU, an intelligent online solution that provides hotels around the world with an alternative revenue management software system designed to deliver maximum bookings and profits, as well as the convenience of full automation and integration 24/7. As REVPAR GURU's custom-designed Yield Dynamic Price Engine is the only real-time revenue management system available on the market, it meets the rapidly changing needs of hotels looking to increase their competitive advantage in an increasingly difficult marketplace. REVPAR GURU’s system offers dynamic rate optimization, real-time pricing, integrated internet and extranet yield channel management and GDS sales distribution, to increase a hotel's RevPAR intelligently and effectively, while maintaining rate integrity and automated rate parity. Since 2004, smart hoteliers worldwide have used REVPAR GURU’s software system to increase occupancy, average daily rate (ADR) and RevPAR.
To learn more about REVPAR GURU, please visit www.revparguru.com or call +1.786.478.3500. Follow REVPAR GURU on Twitter, Facebook, LinkedIn or YouTube.