Top 10 Ways To Drive Direct Bookings in 2019
By Stuart Butler Chief Operating Officer, Fuel Travel | June 23, 2019
For more than a decade, the lodging industry has enjoyed tremendous and continuous growth. For many properties, RevPar and ADR are at record highs, and yet, profitability hasn't always followed suit. With the onset of digital, the complexities and choices of how and where to invest marketing dollars have encouraged some to sacrifice their margins by taking the easy route and simply relying more and more on OTAs.
I get it, I really do. OTAs offer a very simple and attractive solution to a not so simple problem. They are equivalent to turning on a faucet and you are all but guaranteed that you'll see a steady stream of bookings. So, where's the issue?
Well, what happens in the very near future, when we see another economic downturn and we experience a significant drop in demand? Those properties that are over-reliant on OTAs today will face a battle for their very survival. You see, OTAs really started coming into the picture in a meaningful way in the previous economic downturns, when properties could no longer generate enough demand on their own. In these instances, properties used the OTAs to supplement the business that they already had. It was supposed to be more of an "in case of emergency, break glass" type strategy. It was never meant to be THE strategy.
Fast forward to today and many in our industry have become lazy. It's not uncommon for properties to be 50%+ reliant on OTAs, and in extreme cases, I've seen properties who are in a 90%+ situation. So, where will these properties turn when the demand drops?
The problem is that many properties have settled for their existing share of the pie and they are happy to pay 20% of their revenue to a third party to maintain that comfort level as opposed to working harder and smarter now in order to afford themselves protection at a later date. OTAs were supposed to be an insurance policy - somewhere that a property will be able to turn to in their hour of need. Instead, the OTAs have become the single largest source of business and there's not going to be an effective way to turn the faucet to increase the flow come the hour of need.
The brutal truth is that OTAs don't care about your property; they don't even care about your destination. They just care about the customer, which is precisely why they've been able to gain such a massive chokehold in the market. To me, this is the scariest part of this whole mess. The OTAs own the hearts and minds of the guest. Despite not controlling the most important part of the travel journey, they have focused on owning the aspiring, planning, booking, remembering, and sharing phases. Leaving hotels to worry about the actual stay, without having a meaningful relationship with the guest at all. This is the secret to their success. The OTAs own the relationship.
The good news is that you can do the same. Instead of thinking about marketing as an ever-increasing checklist of things to do and places to spend money, start thinking about who your guest is and what they want. Then, come up with a plan on how to give it to them. Below are 10 things you should be doing right now that will have a measurable impact on reducing your reliance on OTAs and strengthen your properties resilience ahead of the next economic downturn:
1. Have a Super-Fast Mobile-Friendly Website
OTAs have invested millions over the years in creating the perfect mouse-trap. They work hard with their advertising to drive visitors to their website, and they work harder to ensure that the guest gets a great shopping experience when they arrive on the site. They are constantly running tests on their user interface, and they have been faster than most hotels when it comes to adapting to changes in consumer behavior. We are now in a mobile-first world. Many of my own clients here at Fuel have seen more than 50% of all website traffic coming from mobile devices for some time now.
Within the past year, we're also seeing that for more than a dozen properties using our mobile-friendly booking engine, that bookings on mobile are outpacing desktop. Yes, you read that right. We have clients that are getting more bookings via a mobile phone than they are via desktop. It is possible; you just need to work hard to get there.
As an industry, the lack of investment in a great website experience is costing us millions in lost opportunity. Guests want things to be easy and instant. The testing that we've done shows that shaving just a few seconds off of your load time increases overall conversion rate. Not to mention the fact that it will also help your search engine ranking. So, why, when hoteliers shop for a new website, do they focus on keeping it cheap and getting it done quickly. If you spent more money on your signage than you did on your website, you're doing it wrong.
Also, if your guests are looking at your site on their mobile device, you should be too. Stop editing and proofing your site solely on your desktop or laptop and get in the habit of looking at your site on your mobile phone and regularly go through the entire shopping experience with the mindset of a guest.
2. Make Sure Your Booking Engine Doesn't Let You Down
For those properties that did spend the time and the appropriate budget on creating a great website experience, it's important that the same experience continues through the entire booking process. Is your current booking engine built from the ground-up to maximize mobile bookings? If you're using one of the big two booking engine providers, then probably not. Some simple rules to follow for your booking engine:
- It should be fully responsive and not offer a different experience between mobile and desktop
- The look and feel, including the navigation, should be identical to the rest of the site and should not appear like a bad facsimile
- The engine should absolutely NOT open in a new tab
- The user interface should be clear, logical, and have large call-to-action buttons
- The total number of clicks from start to booking should be kept to an absolute minimum
If your current booking engine doesn't do all of the above, then it may be time to start looking for a new provider. When the guest jumps between your site and the OTA site, the ease of booking is going to play a considerable role in their decision making process. This is why Fuel spent an inordinate amount of time testing and refining the mobile experience on our booking engine product.
3. Use Psychology to "Nudge" the Guest to Book
It may not be news to anyone, but people can be influenced and persuaded. Advertisers influence us every single day and persuade us to buy their product instead of someone else's. During the shopping and booking experience, your potential guest is getting inundated with new information with every click they make. Your job is to ensure that you're putting your best foot forward and encouraging the guest to pick you and to do so by booking on your own website as opposed to via a third-party.
Booking.com is the epitome of what I'm talking about. When you search their site, there are so many subtle (and not so subtle) psychological hacks that influence the guest's decision making process. They use the concept of Social Proof, by saying things like "25 other people have booked this room within the past 24 hours." They play on people's fear of missing out by showing "Only 2 rooms left," and they double down on this by also showing the property that already sold out a few minutes ago. Another tactic they throw at the unsuspecting guest is the power of reassurance. By telling guests that there's no deposit, or that they can cancel at any time, they take some of the barrier to book out of the way.
Hotels should absolutely copy this approach on their own website. Each time you remove a barrier or you offer a helpful nudge to encourage the guest to book, you're reducing the chance of the guest leaving your website and going to book on an OTA site.
4. Offer Incentives to Book Direct and Make Sure They are Visible
Give people a reason to want to book direct. There's no limit to the incentives you can throw at them because you control the stay. While folks like Marriott offer discounted member rates, there are other tangible things that you can offer to direct bookers:
- Free or faster Wi-FI
- Free or discounted breakfast
- Free or discounted parking
- Discounts to future stays
- Discounts or exclusive offers to on-property food and beverages
- Early check-in or late check-out
- Room upgrades
- Welcome Basket
- Access to exclusive events
While some of these incentives may cost you a little, they all increase the guest satisfaction, which will lead to higher review scores and more repeat business. Considering the fact that you're probably paying around 20% to OTAs, budgeting 5-10% of the room revenue toward giving incentives to your guest makes short-term and long-term sense.
Once you've determined what it is you will offer, it's imperative that the guest knows about it. The messaging should be clear and should appear front and center on your website and throughout all of your advertising. It should also appear throughout the booking process. Don't be afraid to use popups and slideouts to draw attention to it. While you may think that these tactics will potentially alienate the guest, the data says that they work.
5. Answer ALL of the Questions the Guest May Have
One of the biggest reasons that guests don't complete the booking process is because they have doubts or unanswered questions. Those questions could pertain to pricing, fee breakdowns, cancellation policies, amenities, location, room layouts, accessibility, check-in process, sheet thread count … the list goes on. The point is that you should anticipate and address as many of these questions and concerns as possible by communicating with your reservation staff. The questions that guests have will manifest in some of the phone calls your staff receive.
Over time, you can leverage this information to build out robust content and place it in the appropriate locations throughout your website. You should also make this content findable by having a prominent keyword search within the header of the site. This will also give you valuable data as to what guests are searching for.
Finally, in addition to having a prominent phone number on the site, with knowledgeable staff answering the calls, you should also consider the addition of a live chat feature for those guests who prefer typing over talking.
6. Develop an Email Strategy that Doesn't Rely on Spray-and-Pray
If done correctly, email is still the single most efficient method of communicating with your guest. The reason that it has such a bad rap is because the vast majority of marketers have been doing it wrong and have ruined it for the rest of us. The key is to approach email from the guest's perspective, not your own. It's not something you turn to by blasting out to the entire database when your weekend is looking soft. Instead, treat every single guest on the list as an individual - with individual interests, behaviors, and needs.
A good email relationship begins the same way any relationship begins. You have to offer value and build trust. Start by being up front about what types of content you can provide and ask the guest which of these they may be interested in. Be clear and upfront about what you'll be sending and when you'll be sending it in order to set expectations, and then be sure to meet those expectations. Don't ever fall into the trap of sacrificing the long-term relationship for short term gain.
The other piece of advice I give my clients is to focus on helping your guest as opposed to selling to them. Offer content that is relevant and valuable. If a guest stayed with you in order to attend a specific concert or event last year, provide them with information when that event or artist comes back in to town. If you're a seasonal destination that sees a lot of repeat business, perhaps you can trigger a personalized message to them 30 days prior to the day they booked the previous year and show them the rates for the same room they stayed in for similar dates this year, along with an events calendar for that same time period. To make it even more effective, collect their feedback or their photos from the first trip and include that in the message.
If you're not already doing it, you should also send emails to the guest prior to arrival with helpful information about the check-in process, what to expect, where to park, what's going on in the nearby vicinity, etc. This is a great way to start building the relationship and to ensure that the guest has a great stay.
7. Push the OTAs Out of the Way on the Channels They are Hijacking
One question I often get asked is whether or not a property should bid on its own brand keywords on Google and Bing. In most cases, my answer is an emphatic "Yes!" In fact, I would go as far as to say that you should allocate a part of your advertising budget to anywhere that the OTAs have a presence. This includes Google and Bing Ads, META searches, Trip Advisor, Google Hotel Ads, etc. You want to make sure that not only is your property visible, but that you have the greatest chance to capture that booking yourself by outbidding the OTAs or optimizing your ad to appear above theirs. This is the approach that we use for our clients at Fuel and it's been effective at driving OTA reliance down to below 10% in some cases.
In addition, look for places that the OTAs don't appear, such as local CVB or chamber websites, locally owned destination portal sites, and smaller blogs and niche sites. If your area doesn't have these kinds of sites, perhaps you could form a co-op with other local properties instead. Being findable in as many corners of the web as possible is key to self-reliance. The advantage that the OTAs have is that they appear to consumers high in the funnel because they can rank for broad keywords such as "Hotels in Austin." Find other, non-OTA, sites that rank for relevant keywords and ensure that you have a presence.
8. Limit What You Give the OTAs Based on Seasonality
There's no rule that says that you have to have the same strategy for the OTAs year-round. There's no exact science to this, but I encourage you to be selective about what inventory you push out to the OTAs during your busier periods. Part of the value of the OTAs is that they help your property get found by people who haven't stayed with you before. So, as long as your property is showing in the results, there's a chance that the guest will visit your site. Our data suggest that the majority of consumers who use an OTA will also visit the property website before finalizing the booking. If you're following the advice above, you have a good shot at converting the guest when they do. Therefore, pushing out limited inventory, or only specific room types to the OTAs can work just as well for peak times as pushing out all of your inventory.
9. Train Your Staff So That They Can Be Soldiers in the Fight
This may be the most important item on this list. Having your staff involved in driving more direct bookings will likely have a bigger impact than anything else we've already discussed. When someone calls you, having that staff member be helpful and answering questions is great, but having them be knowledgeable about the incentives for booking direct and communicating them effectively to the guest can make all the difference. Sometimes, just letting the guests know that if they book directly with the property as opposed to through a third-party that it helps the property is enough, but when you make the pot sweeter by showing the guest the benefits, you go a long way to keeping the booking.
Also, training the front desk staff to thank guests for booking direct and fulfilling the promise of incentives will reinforce that behavior and ensure that they do the same next time. For those that did not book direct, have the front desk staff collect the email address of that guest and educate them on the value of booking direct next time. Getting the email address will allow you to nurture the relationship and reinforce the benefit of booking direct in future.
By informing the guest of the value of booking direct, you could possibly create some animosity, so consider going out of your way to offer them the same incentive the first time they book through a third-party but informing them that they will need to book direct next time in order to enjoy the same benefits.
If you want to take it a step further, you could really celebrate those guests that booked direct by giving them something that differentiates them to all staff members. This could be a different colored pool bracelet or some kind of sticker that you give out to the kids. Then train your staff to acknowledge and thank these VIPs for booking direct. This would make them feel extra special and would encourage them to do the same next time.
10. Nurture the Relationship with Every Guest
You should use every possible opportunity you can to interact with your guests on a personal level. Certainly, while they are on property, you should make them feel special and ensure that each and every interaction is one that enhances and solidifies the relationship. Simple things like having the staff smile and acknowledge the guest when they walk by, using the guest's name whenever possible, or giving the guest's children fist bumps will generally make people enjoy their stay a little more but won't necessarily impact whether the guest books direct next time. So, what about when the guest is not on property? How can you continue to build the relationship and encourage direct bookings?
An often overlooked tactic is to train your reservation staff to make outbound calls to folks who called but didn't book. If a potential guest calls your reservationists but chooses not to book at that time, before they hang up and have the freedom to go book somewhere else, ask them if it would be OK to check back in with them in a day or so. Most people will be OK with this and it builds a stronger bond between the guest and your property. Then, ensure that the same person who originally took the call is the one to make the outbound call.
You can extend this beyond the current booking journey. Provide your reservationists with a daily list of guests who stayed with your property the previous year and booked through an OTA. Have your staff call these people 15-30 days prior to the anniversary of their booking date for the previous stay and offer them an additional incentive to come stay with you again.
The communication doesn't have to be limited to those folks who are in the booking cycle. You can also nurture the relationship after the stay. A simple phone call to every guest who stayed with you, thanking them for their business would be a very nice touch. It can be even more effective if that conversation included an offer for them to receive an incentive toward a future stay if they book direct next time they are in town.
We are living in a time where everything (relatively speaking) is going well for the hospitality industry, but that won't always be the case. Now is the time that you and your staff should be working harder and smarter than the competition to ensure that you are self-reliant and that you have an emergency button in the form of the OTAs when things get a little leaner.
Yes, It may take a little more effort and it may cost you a little more money in the short term, but it's easier to do it now than it will be during the next economic downturn. And it's a lot cheaper and less risky in the long run than being beholden to the OTAs.
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