War of the Rooms: How Hotels Can Drive Direct Bookings and Compete with the OTA Websites

hotel sign

Think back to the last time you booked a hotel room and it’s highly likely you used an OTA such as Booking.com, Trivago or Expedia. When they first became popular, Online Travel Agents were a blessing for many accommodation providers, providing them with bookings aplenty and doing all the hard marketing work for them. However, over time hotels have come to realise their OTA addiction comes at a cost, often in the form of 20+% commission fees and high guest cancellation rates.

Some OTA Logos

The biggest challenge for any hotel marketer has thus become how to reduce dependency on the OTAs and increase direct bookings through their own advertising, website and booking engine. Goliath has grown very large indeed; when you consider Priceline (owners of Booking.com, Kayak and Agoda) spent $3.5 billion on online advertising in 2016, it’s understandable to feel slightly overwhelmed.

That’s not to say you should give up and run screaming in the opposite direction. OTAs may be here to stay, but there are many good strategies that hotels can employ to help increase their direct bookings.

1. Optimise, optimise and optimise some more

One big reason why guests choose to book via an OTA is user experience – the whole booking process is really easy and encourages trust from the user. Hotels therefore need to pay great attention to their own website and booking system, focusing on increasing conversions through a continuous process of optimisation.

This is particularly important for mobile. Skift reports that 20% of travellers now book hotels on smartphones but the number simply browsing travel sites on mobile is much higher. A large amount of hotel businesses are simply not prepared.

Mobile Web Usage Graph

Last year mobile internet usage surpassed desktop in the United States. Source: gs.statcounter.com

Here are some (relatively) quick optimisation wins for any eCommerce website:

  • Identify and analyse customer journeys through the website, to ensure it is a seamless experience from start to finish. The less effort the visitor has to use, the better.
  • Create trust by using and promoting an independent reviews provider such as Feefo or TripAdvisor.
  • Ensure guests know why they should book direct online. Clear messaging saying “Lowest rate guarantee” can be a start.
  • Set-up automated emails to send to visitors who abandon their booking before paying, to entice them back to the website to complete the booking.
  • Optimise for page speed. According to Google, 53% of mobile site visitors leave a page that takes longer than three seconds to load.

A further step would be personalisation, but that’s a topic for another time.

Lastly, it is important to ensure that the information presented on a hotel website matches the OTAs’ listings. Travellers will often begin their search with an OTA, make a shortlist and then visit the hotels’ websites to check them out. If they find that the rooms have different names or descriptions, or they cannot find the same cancellation policy, they will be encouraged back to the OTA or to choose another hotel.

2. Ensure direct rates are better than the OTAs

This piece of advice is pretty obvious: no one is going to want to book direct if they find it cheaper to do so elsewhere.

The tricky part is rate parity, i.e. the contract that hotels sign with OTAs that agrees they won’t sell rooms cheaper elsewhere. You can get around this in a couple of ways:

i. Create targeted discounts

Rate parities often do not apply to private communications to people who are part of a marketing database. This means hotels are free to promote discounts and special offers via targeted social media advertising, email and their loyalty programme. This doesn’t have to be a discount – it could be something as simple as receiving a free bottle of champagne or a room upgrade when booking direct with a promo code.

ii. Create bespoke packages

Another potential way to get around rate parities is to create bespoke packages that include more than just the accommodation – for example, two nights’ stay with spa treatment or dinner for two. Packages can also be used to encourage guests to stay for longer or during off-peak periods.

Hotel Champagne Bed

3. Invest in great content

It is frustrating that so many travel businesses continue to underestimate the power of good quality content. Not only does great content marketing help SEO, it improves brand recognition and increases social media followers and email database.

This is definitely a job you cannot do half-arsed – invest in a content strategy and hire a content producer, someone who can not only write well but who can take photographs and create videos for your website and social media members.

4. Be found on Local SEO and Voice Search

Local SEO is about ensuring your business appears for relevant searches made by people in the local vicinity, in this case travellers looking for a last minute hotel room. Talk to your SEO consultant and make sure you have claimed and optimised your listings on Google, Bing, Yelp and so on.

Local hotel listing on Google

As well as Local SEO, hotels need to be taking voice search seriously – Google reports that over 20% of mobile searches are now done via voice and this will only continue to grow. Find out more on how to optimise for voice search.

5. PPC: Consider social media advertising over Google Adwords

If you search Google for “Manchester hotels” you will find the top three or four Adwords placements are filled by OTAs (and perhaps some of the larger chains like HolidayInn). In order to compete with these, you should expect to pay a high cost-per-click price – something not all businesses can afford.

Google Search for Hotels

The right approach will depend on some analysis. Hotels with lower brand awareness may prefer to invest their advertising money into social media, where CPC is usually much lower. Hotels with good brand awareness and prominence on many OTAs should look at focusing on brand keywords to capitalise on the “billboard effect”. Longer tail and more specific search terms may also prove to be cheaper than “LOCATION + hotels”. Attention should be given to audiences locally, nationally and internationally and strategy adjusted for each accordingly.

Regardless of where hotels concentrate their spend, remarketing can be beneficial on both search and social advertising – encouraging previous visitors back onto the website to book.

6. Monitor and respond to online reviews

There is an abundance of places where guests can now place reviews and comments and monitoring them all can be a full-time job in itself. However, responding and interacting with guests will improve brand perception and help create trust with potential bookers.

(Perhaps best to avoid what this hotel manager did…!)

Google Alerts is a free service that can help notify you when your business (or any keyword phrase) is mentioned on the internet.

Hotel Review Response

Great reviews are worth responding to – even when you are as amazing as The Datai in Langkawi…

7. Focus on high demand booking periods

Hotels should avoid allocating all their rooms to the OTAs in peak booking periods, for example if Justin Bieber is going to play a concert in town. If bookings are almost guaranteed, there is no logic in paying OTAs large commission fees.

Marketing should be adjusted accordingly – for example in this case, it could be a good idea to target pop music lovers who live within 50 miles with Facebook advertising.

8. Establish a loyalty programme

Lastly, hotels can encourage repeat bookers to go direct by inviting them to join a loyalty programme and giving them rewards and incentives. This works particularly well for business travellers and accommodation chains with hotels in other locations.

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The fine balance between the OTAs and direct bookings will always be a tricky one – and can differ depending on city, clientele and season. Many hotels would like their bookings to be 100% direct but this isn’t realistic and at times it isn’t the most productive solution. In my experience, roughly 30% is often a good target with which to start, and hopefully with the above tactics this is achievable for many hotels.

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