I am old enough to remember the days before OTAs and I was at the forefront of the pushback when as an industry we realised what impact handing over our inventory to a third party had on our costs and our control.
While the airlines kept control of their distribution and cost of sale, hospitality fragmented then scrabbled desperately to put the genie back in the bottle. That boat has now sailed and we have moved on to an, at times, uneasy marriage.
The OTA business model has some undoubted advantages over the hotel business model. They are technology and marketing businesses and therefore have nothing else to think about other than driving traffic and conversion - not for them helping on breakfast followed by making beds.
They have the advantage of distribution and volume – in a digital world where attention span is short, they provide an attractive one-stop shop for Joe Public.
Their size and dominance equal big budgets which in a world of digital marketing auctions gives them a huge advantage – hotels feel that they have to be in their team to thrive or survive.
But, whilst there’s no one silver bullet, there are lots of things a hotel (and a hotel brand) can do to claw back market share and drive bookings direct:
It sounds too obvious to be worth stating, but it’s amazing how often hotels offer their cheapest rates via an OTA. Giving your cheapest rates to an OTA can drive short term revenue, but is it good for you in the long term? Or is it just helping cement the customer behaviour which has got the industry into this position? Why would anybody even consider your cheapest (your direct) channel if you’re cheaper via an OTA?
The promotions you are invited to participate in at the OTAs are usually stacked ones, with the OTA asking for additional discounts stacked on top of existing discounted rates and high commission levels. How does your net rate look? And what about mobile discounts? Do you really want to penalise guests who use different devices to book?
The old adage that it's cheaper to retain an existing customer than to attract a new one is very true. Are you doing everything you can to ensure all of your guests find their way into your email marketing database? Especially those who booked through the OTAs? It's no surprise that the OTAs choose not to pass their email address on to you.
Utilise a platform like Stampede to harvest email addresses (of course with GDPR compliant marketing consent!) via your on-property WiFi. My guess is that all your OTA bookers will be logging on.
Put in place an email marketing programme to drive repeat (and direct) business from these and other past guests. Remember, email marketing will have a higher ROI than almost any other form of marketing you can do.
One of the few advantages you have over the OTA is that you own the guest experience. You have the opportunity to chat to them when they’re at your front desk. You're the one making their stay memorable.
Take the opportunity to encourage them to book direct next time. Give them an incentive to do so – for example, free car parking, wifi, late check-in / check-out for direct bookers. You could even encourage them to join your…
Loyalty programmes can really influence buying behaviour – a free night for every X stays is a brilliant incentive. When guests find your best rates on direct channels they are more likely to book direct and return in the future. If your loyalty programme ensures your best customers get the best price if they book direct you will encourage that behaviour for the long term.
You're doing everything you can to grow your customer database and you've got a great email marketing programme in place. However, what's happening when these people visit your website? Your conversion rate will likely be a single digit percentage… for every 100 people visiting, 90+ will exit without booking. Understand where the pain points are on your site. Which parts of it are under performing? Have in place a constant programme of A/B tests on your site so you can continuously drive up the conversion rate.
Even if you have the best website in the world, it can only convert traffic that lands on it. Your email programme will be driving revenue from your existing database, but what about finding new customers?
Elevate your website's position on search engines with strategic SEO. Utilise as many channels as possible to drive new traffic to your site. Do you have an affiliate marketing programme in place? Do you have a paid search programme in place and is it well managed? Do you know what ROI it's driving? Invest in Meta search such as Google Hotel Ads and Trivago. TripAdvisor is one of the planet's most used travel websites - consider investing in TripAdvisor Business Advantage so you can display your direct channels on your hotel's listing on TripAdvisor. Finally, ensure your hotel listing is up-to-date and regularly managed on Google, Bing and Apple Connect.
Promotions are a great way to drive revenue on a tactical basis. Our recent early Black Friday promo delivered more than £800k into our hotels via the brand channels over a 4 day period. Don't make these promotions available via the OTAs. And if you do choose to take part in OTA promotions make sure they are also available on your direct channels.
Don't forget your business stayers. If you are noticing Travel Agents booking through an OTA, consider opting into consortia rate programmes. This way you'll be able to track which agents are booking with you: gold dust for your sales team. Not all consortia programmes are expensive, in fact some of the ones we use only carry a small pay for performance fee.
At BWH, we exist to provide hotels with all the sales, marketing, revenue and distribution support they need. We'll help you Be Local, Feel Global and Stay Independent.
