David Morton explains why guests don’t book with you directly (and how to fix that) [Audio]
by Josiah Mackenzie on July 22, 2010
9 Comments
9 Comments
David Morton is a revenue specialist with Bamboo Revenue in London. Today, we discuss what you need to know about encouraging direct bookings.
Our conversation is less than 19 minutes, and I highly recommend you listen to the whole thing – especially if you’re a smaller, luxury hotel:
[Prefer to listen on the go? Download the mp3 file]
For those of you who prefer to read, here’s the summary of the talk:
- Why don’t more guests book with hotels directly? Many hotels release a few rooms to external OTA sites at lower rates, and don’t realize that savvy guests will easily find those rates and book outside of the hotel’s system.
- Avoid retail marketing tactics; maintain consistency across all booking channels.
- For example, “In conversations with hoteliers, I see that some of them have defended [rate disparity] to me, and they’ve explained, ‘Oh, Dave, well actually, what I do, is on my own hotel website, and/or through my luxury brand, I will sell from my second-lowest room category up.’ So, if we’re talking about a historic hotel property, they’ll say, “Well, the old maid’ rooms and the tiny rooms up in the attic, I don’t have on my own website, but I’ll put those through third party websites.’ And again the conversation I have with them is, ‘Look — people are coming to your hotel website, they’re salivating over the gorgeous Michelin starred-restaurant, the beautiful oak-paneled library, your amazing spa. They just wanna be under your roof.”
- This type of behavior “trains” guests to not book directly, and is damaging to the hotel’s brand.
- “If you’re a niche product, as long as you’re in the top ten or twenty of the hotels on Trip Advisor ranking for your location, as long as you’re delivering a good product, good service, you can and you will get a lot of those bookings direct, if you’re offering rate parity.”
- It’s important to carefully control distribution through OTAs and focus on who you partner with. Read the fine print. Don’t assume that “the more partners, the better.” Work with OTAs that are “in synch” with your hotel’s brand.
- Guests prefer to book through sites that are SSL certified.
- Foreign guests prefer to book in their home language and currency.
- “Don’t become distracted by the mass-consumer market, because that’s not the market that you’re in.”
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Article by Josiah Mackenzie // July 22, 2010
Josiah helps hospitality organizations use technology and the social web to provide better service and generate more profits.
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This is really helpful Josiah !
And thank you for thinking of people like me who prefer to read rather than listen !
You have mentioned a very valid point but how do you convince a guest that you offer the lowest rates on your website ?
Any ideas Josiah ?
Cheers
Mihir
How does this sound Josiah ?
Are you worried that somebody else on the web might have a cheaper tariff for my Mitaroy Goa Hotel than the one you see here on my website ?
If you book a Suite at my Mitaroy Goa Hotel and then find a tariff anywhere else on the internet that is lower than the tariff you have paid me, I will refund you twice the difference. That is my promise.
And, at any point during your stay at my Mitaroy Goa Hotel, if you decide that my product or service does not completely meet your expectations, I will be happy to return the entire amount you paid as hotel tariff. No questions asked. That’s a promise.
http://mitaroygoahotel.com/unconditional-guarantee/
Cheers
Mihir
“Many hotels release a few rooms to external OTA sites at lower rates, and don’t realize that savvy guests will easily find those rates and book outside of the hotel’s system.”
Or…maybe the do realize this and they’re encouraging O.T.A.s to promote their hotel.
David, I think you’re oversimplifying the economics of hotel distribution. Hotels need O.T.A.s to market them – in which business model is it sensible for a supplier to compete directly with its distributor?
Great conversation. It’s interesting to hear David’s opinion about selecting fewer online distribution channels, as most hoteliers seem to think that it can’t hurt to have more outlets for their products. David’s comment has logic to it.
The problem i come across most often, with luxury resort clients, is that they are so afraid of upsetting their wholesale partners, and this often paralyses their online pricing strategy. Any thoughts or experience as to how this can be tackled, aside from the obvious “reduce reliance on wholesale by building up retail”?
In the past few years I have worked for both type of hotels (retail heavy and wholesale heavy). I think like in most all cases in everything- a golden middle path is necessary.
if you are trying to sell a “normal” hotel, than I think it would be foolish to restrict the amount of channels that can bring business to you. through yield management you can gradually close down channels that are more expensive, but i believe that the most expensive room is the one you do not sell…
If you have a very unique property – like The One Angkor- it can be beneficial to choose your sales partners.
Most hotels can not afford to be that selective.
With channel management programs, the price of an additional channel is basically 0 and so is the extra cost.
Keeping rate parity in mind, I think by offering additional benefits (relaxed cancellation policy, upgrades, complimentary services) for booking directly a hotel can significantly increase the amount of direct bookings.
A guest booking though an OTA will almost always check the hotels website as well. This is why it is important that a hotel’s website should be ready – ease of use, clearly mentioning the benefits of direct booking,- to convince a guest to book directly.
Keeping rate parity in mind, I think it is a great idea to offer non monetary benefits to guests booking directly at your hotel like Robert says (e.g. relaxed cancellation policy, upgrades, complimentary services).
Also, clearly stating these on your tariff page will definitely help increase direct bookings.
Thanks for the tips Robert! Is anyone listening ?
Cheers
Mihir
This is what I did to encourage Direct Bookings on my Tariff and Availability page http://mitaroygoahotel.com/tariff/
‘If you Book Directly with me, and then find a tariff for my hotel anywhere else that is lower than what you paid me, I will refund you twice the difference !
Plus, at any point during your stay at my Mitaroy Goa Hotel, if you decide that my product or service does not completely meet your expectations, I will be happy to return the entire amount you paid as hotel tariff. This offer is only valid if you Book Directly with me.’
How does that sound ?
Cheers
Mihir
Good stuff, Mihir – I like how you put this ideas into action right away
That’s my motto J, DO IT WRONG QUICKLY