Driving Maximum Profit Through More Direct Bookings
By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | February 2017
In today's ultra-competitive hotel environment, every dollar counts. Any competitive edge that translates into a stronger bottom line is sought out, and every piece of hotel business is evaluated to determine its true worth. With rising costs associated with acquiring new guests through third-party platforms, hotels are rightly considering their most effective booking channels and looking to maximize business from owned assets like their own website.
Guest Acquisition in a Digital Age
Today's costs for acquiring guests are significant: OTAs charge between 15-25 percent commission for every booking they secure, with hotels also paying hefty transaction fees to their selling systems if the reservation is received through them. These third-party costs influence the amount of revenue hotels are able to secure from each guest - ultimately impacting a property's bottom line.
While there are significant challenges in securing guests for the ideal price, at the ideal time, through the ideal booking channel today; hoteliers that effectively market themselves to potential guests, practice advanced search engine optimization strategies, and offer guests a unique value can greatly reduce their cost of acquiring guests.
Hoteliers currently using OTAs to secure bookings should also consider ways to use those platforms to better support their future business. To increase both business and return business, savvy hoteliers are letting their OTAs handle the initial capturing of guests, and then implement strategies and incentives that ensure those guests book future reservations directly with their hotel – eliminating ongoing third-party booking expenses.
Despite a high reliance on OTAs, the most cost-effective online booking channel for a hotel remains its own website. How can hoteliers maximize direct bookings through their website? The first step is increasing website traffic from potential guests and attracting more 'lookers.' To do this, hotels need to understand where, when and who those 'lookers' are. What dates are they searching for, where do they search and what is driving them to a particular market? Collecting this market intelligence provides data that can be used to develop targeted marketing strategies that attract the right type of 'lookers,' the ones most likely to become 'bookers.'