6 Strategies to Increase Direct Bookings Without Conflicting Your Rate Parity Agreement

By Ashley Verrill Market Analyst, Software Advice | August 25, 2013

Online Travel Agencies such as Expedia, Priceline and Hotwire are extremely good at what they do: filling empty rooms. Unfortunately for hotel operators, they've become slightly too good at it, and travelers are now going straight to these deals sites for their booking needs. So how do hotel operators keep OTAs from cannibalizing business from customers that might have booked direct in the first place? This is one question I hear all of the time from companies that call me for advice on hotel automation systems.

Most OTA agreements require that hotel operators not advertise room rates for lower than what is listed on their websites. Fortunately, we worked with several hotel management and marketing experts to discover six ways hotel operators can bring customers back to booking direct, without conflicting with their OTA. Here's a summary of each:

1. Supply a Targeted Audience with Special Discounts

Parity agreements prevent hotels from offering deals publicly. However, this restriction doesn't apply to those offers hotels distribute to a limited audience. You can send a discount code to your Facebook fans, for example, or to customers who've opted into your email list.

2. Combine Add-Ons for Money Saving Packages

Rate parity only applies to offers for the exact room advertised on the OTA. This doesn't prevent you from packing that same room with other services for a value that is overall a better deal than what's on Hotwire, Priceline, or where ever. You could, for example, package a room with drink tickets and a shuttle ride to an event happening that weekend and provide savings that equate to more than what is on the OTA. Other Add-ons could include parking, wi-fi or a discount for room service.

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Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.