Mr. Smith

Sales & Marketing

Do Toll-free Lines Increase Bookings or Cannibalize Them?

By Donald R. Smith, Executive Vice President, Nor1 Inc.

Hospitality industry experts agree, offering a toll free number on a hotel or hotel brads website not only is likely to increase oval bookings, but provide an important customer service element.

Over the past decade the internet has grown to become one of the major sources of for hotels. It has also proven to be one of the lowest costs of distribution for them. Major hotel companies have marketed their Web site as the best place to book, offering incentives like frequent quest points and lowest price guarantees to entice consumers to book directly on their Web sites. As more and more of their individual leisure and unmanaged business travel booked via the web, they were able to scale back their call centers which reduced their cost per booking due to the higher cost of call center staffing.

Many travel companies made it difficult if not almost impossible to speak to a human, frustrating many consumers and resulting in the loss of bookings. There is a misconception that moving bookings to the Web lowers cost and ultimately saves both the hotel and customer time and money by elimination the costs involved with 800 numbers and call center staffing. In fact, while rates vary from state to state (some may be as little as 7 cents per minute, with others running as high as 42 cents per minute.) There are definitive costs, to be sure. Even more significant can be the costs for multiple lines and the expense to staff them.

Jason Price, Executive Vice President of Hospitality eBusiness Strategies, a New York based hospitality emarketing consulting firm, finds in his experience and research, the following trends:

Logical arguments can be made for and against the 800 numbers. But ultimately consumers want a choice, and they want to know that a human can assist with their decision making and travel booking process. While some hotel groups have hidden their toll free numbers, others have made them prominent for the following reasons:

Some consumers are reluctant to book online due to credit card concerns or lack of confidence in online transactions. While these concerns are at a fraction of what they were a decade ago, they still exist with many travelers. Purchases of expensive and detailed / complicated itineraries found that they needed to speak with an agent to be sure that they could ensure they would have the exact experience they desired (i.e, confirming the room they booked was ocean front in the Aloha Tower, making sure they could be guaranteed tee times - perhaps even specified times or reservations - during their stay... even dinner at 8 PM sharp in the fine dining room.)

Some hotels and hotel companies found that they could better up-sell over the phone, increasing overall revenue per stay. Over the phone they could sell the caller on the value of a larger suite or a view room, explain the importance in booking their show tickets in advance of their arrival, or arrange tee times or dinner reservations in advance. Many companies take the opportunity to up-sell their spa treatments and package offerings, bringing a higher revenue per stay; many still take the opportunity to quickly enroll callers into their frequent guest programs.

Henry Harteveldt of Forrester Research notes that Travel Executives can use the information they get from their call centers to improve the booking process on their site. "Picking up the phone is a tough habit to break, even for tech-optimistic leisure Bookers. In 2005, 36% of US leisure Bookers who purchased airline tickets, hotel stays, or car rentals online called customer service during or after their online purchase. Travel companies can't afford to ignore these callers because they tend to pay more for a quality travel product or service than their non-calling counterparts, and they spend more on travel. Travel companies can't sit idly by as this happens - unnecessary calls add to their costs. The savvy travel marketing executive will use call center comments to prioritize future site design or functionality improvements, producing sought-after "precision" booking features that give travelers the same degree of control they get offline and providing better feedback on user actions."

According to The Leading Hotels of the World's Tim Peter, toll free numbers placed prominently on their web sites are important in their efforts to provide multiple booking options to consumers and agents alike. Leading Hotels of the World operates 12 reservation service centers worldwide, staffed with multi-lingual personnel. Recently, service centers have opened in Dubai and Moscow to handle those emerging markets. Agents assist the consumer in each of the local languages. The agents are there to assist in taking voice reservations or assisting the consumer booking on the website with additional information or technical support. Toll free / local numbers are prominently displayed on The Leading Hotels of the World's web site. While they are seeing double digit growth of booking via the internet, voice bookings are also up significantly. Leading Hotels of the World is committed to serving the customer how they want to be served, always in the best way for the consumer and for the brand.

At SideStep, we have found that when we make a toll free number available in addition to the online booking capability, our hotel and consolidator partners have experience on average a 18% increase in overall bookings. According to Key Metrics Inc.", 60% of online searches for travel and hospitality result in a telephone call."

Most hotel companies will agree that offering toll free numbers is an important part of their strategy to reach all customers, and allows them to book on their channel of preference, which provides a higher level of customer service and overall satisfaction with their hotel experience. More than 90% of Americans say they use toll free numbers, and more than one-third of Americans estimates that they make 60 or more toll free calls per year. Those are numbers that no hotel can choose to ignore, particularly when the potential for higher revenues due to upsells are considered.

Ultimately, toll-free numbers allow hotels an opportunity to maximize customer satisfaction and increase customer retention by providing them with immediate, personalized access to your property. I recommend that hotel groups test ads - with and without vanity toll free numbers - to validate the effectiveness of having the number included.

Don Smith develops strategic supply partners and creates revenue opportunities through innovative processes and related modules. He oversees implementation of Nor 1’s suite of revenue enhancement products. Prior to Nor 1, Mr. Smith headed up Business Development at SideStep. He positioned the company for a successful sale to Kayak Software in 2007. He currently holds leadership roles in industry associations, such as the American Hotel & Lodging Association (AHLA) and the Hotel Electronic Distribution Network Association (HEDNA). Mr. Smith can be contacted at 408-996-7417 or don.smith@nor1.com Extended Bio...

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