Hotels today deliver a significant portion of their revenues to digital agents such as booking.com. Experts recommend generating as many direct bookings as possible via the hotel’s website. But how does a hotelier implement this?
Recently, an elderly lady told me about her Tuscany vacation 40 years ago: “We just drove off, and if we liked one place, we stopped at a ‘free room’ sign and stayed overnight.”
“Room free” signs can still be seen today. However, they do not have much to do with the sales strategy of a modern hotel. Because more and more people inform themselves before departure in detail on the Internet and book there. Let’s consider how online portals like booking.com, HRS, and Expedia are getting more powerful. Hotels today deliver a significant portion of their revenues to these digital intermediaries. Hoteliers need a clear strategy to compete in this market. What can such a strategy look like?
In conversation with professionals
I interviewed two experts: the distribution expert Gianluca Marongiu of the Swiss Hospitality Solutions AG (SHS) and the experienced Lucerne hotelier Ferdinand Zehnder.
For Zehnder and Marongiu, one thing is clear: The aim is to generate as many direct bookings as possible via the hotel’s commission-free website. That’s easy to say, but not so easy to achieve. The question arises: how can the relatively unknown website of a single hotelier stand up to the big portals?
Zehnder and Marongiu consider the following four tips to be crucial:
1. Create incentives for direct bookings
Each booking via online booking portals incurs commissions of up to 15 percent of the room rate. Ferdinand Zehnder explains:
“Reservations through our website are commission-free. The hotel’s website thus gains great importance for us. We want guests to book directly through our website and sell the rooms 4 percent cheaper than booking.com.”
Thus Zehnder saves the commission costs, and its guests benefit from a better offer. Gianluca Marongiu pursues a similar strategy at SHS. He recommends that his clients create attractive incentives for direct bookings. At a training course for Lucerne hoteliers, he gave the following tips:
- Best Price Guaranteed
- Thank you gift, for example, dinner or free breakfast
- Stringent visual language, wording, and communication of the USP
- Good usability with logical booking steps up to the cash register
2. Hotel websites must be mobile-friendly
“Responsive” websites are becoming more important. According to Marongiu, the search behavior of customers has changed a lot in recent years:
“Almost everyone gets informed online today. There are very few people who inform themselves offline and book offline. The online process influences over 80 percent of bookings. Guests are increasingly using mobile devices. A responsive website is, therefore, a must for every hotel. ”
3. Show presence on meta-search platforms
Meta-search platforms such as Trivago or Kayak are an excellent opportunity for hoteliers, as their hotel website on the price comparison platforms is in direct competition with the popular booking portals such as booking.com and HRS. If the hotel website wins the price comparison, commission-free direct bookings can be generated.
However, how long it will take is uncertain, Marongiu knows:
“The big online booking platforms are increasingly buying the most important meta-search platforms. In the long term, the hotel industry probably has to pay a lot for mediation via the meta-search platform (pay per click).”
4. Revenue Management: Maintain Independence
Marongiu recommends targeting the number of customers booking through an online booking platform. SHS has developed a pick-up reporting that focuses on the next six months and provides a forecast for the future booking status. At a low booking level, the hotelier resorts to an intermediary such as boooking.com. During a well-booked period, it dispenses with the distribution through the commissioned online portals.
As there are price levels in yield management, revenue levels have been developed in Revenue Management.
“So we’re not just changing the prices, but also the availability on the channels, depending on what the forecast looks like for the next few months,” explains Marongiu.
For example, a hotel does not raise prices on a high season, but can only be booked through its own, commission-free website. Thus, the hoteliers create certain independence compared to the booking platforms. Ensuring independence is also central to Zehnder: ” We have a comprehensive base and can be booked through several portals. We also manage our prices and quotas independently. We do not want to be dependent on a channel. ”
The airline industry as a trendsetter
The airline industry has already achieved change. According to Pocuswright, three-quarters of all airline bookings in the US are made directly through their own website. Will the Swiss hoteliers succeed in luring their guests onto their own website in order to avoid the high commissions of the online portals? Please send us your opinion.
Where the journey for the Swedish hoteliers leads, we will see in the next few years. The journey can begin, preferably right on the hotel’s website.