There’s no doubting Online Travel Agencies (OTAs) like Expedia and Booking.com are a great way of bringing traffic to your website. They promote your property to a global audience you would never reach otherwise. They're like an online billboard for your property and are often a great source of additional revenues, but they shouldn't always outperform your direct bookings.
Your hotel website and booking engine are where you have the greatest control over your property's image, rates, margins and other essential factors that make an impression on potential guests.
Direct bookings are essential to the livelihood of smaller independent properties, especially if they have little brand recognition. The Internet is not always a level playing field. Corporate brands usually dominate search engine results. If hoteliers don’t have a multi-channel marketing strategy, they'll have great difficulty in being noticed and become more dependent on OTAs like Booking.com.
Online Travel Agents
OTAs have grown into powerful companies. Their services are vital and have helped smaller properties gain access to a wider audience, however; there is a down side. In their quest for the ever-increasing market share, they are cannibalizing your direct booking efforts!
Have you discovered that even though your occupancy and your conversion rates have increased your profit margins are eroding? Frustrating, isn’t it? How could that happen? The simple answer: OTA bookings are an increasing percentage of total bookings. This can cost you valuable revenue and make them more dependent on OTA’s every day.
OTAs dominance means a lower Revenue per Available Room (RevPAR) as OTAs demand a bigger chunk of your revenue. Direct bookings are typically one of your highest revenue (or least expensive) methods of booking hotel stays. So the question is, can you really move a portion of those OTA bookings back to your own website and benefit from increased RevPAR and lower cost to acquire bookings? Of course, you can.
Below are some common obstacles and complaints independent hoteliers shared with me. You'll find on the next part of this post tips and advice on how to overcome them.
OTAs will spend more this year to perfect their websites and acquire more guest bookings than my hotel total revenues for the NEXT FIVE YEARS
Let’s face it, the major OTAs can and are spending millions of dollars perfecting navigation, usability and their SEO strategy so that they can maximize conversions on their sites. Moreover, the larger OTAs also collect a huge amount of data and have the ability to analyze it. They then tailor their website experience to what entices customers to book.
We don’t have the critical expertise on staff
OTAs have large teams of experts at multiple locations around the globe working 24 hours a day to chip away at the bookings you still do get. They have teams of web developers, usability experts, search engine optimization and analytics experts.
The good news is that you don’t actually need all those experts. A lot of properties can run lean and still compete. We often just lack the time to make the change: Running your property requires expertise in hospitality, food and beverage, HR, events, facilities, systems, and maybe even entertainment. You don’t have time for work through the night to optimize your website. Even though every booking diverted to an OTA costs you 12% – 25% off your top line revenue. And those numbers make an enormous difference to your bottom line But for the OTAs, these are their day-to-day tasks. This is all they focus on.
If we're going to risk a new strategy, we want to be certain it’s going to work.
If you’re going to do something to fight back, you need to know that you’re doing something that is going to work. You don’t want to end up in a worse position that where you began.
Who would want to risk investing a chunk of their budget in a new strategy when there’s a very real risk that it just won’t work? If you’re reading this, you’re probably already feeling that pressure to recapture a percentage of your own bookings. The key word here is “recapture” as you’re never going to beat the OTAs, you just need to move some of the bookings back onto your direct website or at least stop the decline. That revenue is too valuable for you to sit by idly as it disappears.
To push back against this onslaught, you need a fresh strategy and some tools. Also, remember that this isn’t easy. You are fending off giants! To get you started here are some pointers:
1. Discover what your users need to make booking decisions and deliver it!
Visitors to your website need to satisfy their questions about your property before they book a room. The key is to facilitate this on your site so they aren’t tempted to go elsewhere for answers. In other words, find out the information your users want in order to book a room and deliver it. A great technique for making this happen is conducting regular usability studies and implementing the changes they prescribe. You can learn to do these for minimal cost, in-house. They deliver critical information on your customers’ desires and changes you should make, customized for your specific situation.
2. Make your booking process simple, fast and clean!
If your booking process isn’t fast, easy, and intuitive, users will find a process that is on another site. The goal should be reducing the amount of user effort necessary to complete a booking. Items like an easy room or package selection, only asking for the necessary info, intuitive navigation, graphics that inform, facilitate, and inspire the confidence to book are all important ingredients. One of the largest online travel agency requires 4 pages to book a room. Let that be your benchmark. At a recent engagement, we were able to reduce the amount of pages necessary to book to 3 and that accompanied a significant reduction in user clicks as well as more conversions.
3. Reassure the visitors they're getting the best deal
Make sure your rates always at least match those found on online booking sites. Don’t underestimate your customer. They’re just like you and will have numerous browsers open at the same time. Travelers will visit on average 38 sites before booking their vacation package. Make sure your rates match those found on your other distribution channels. Also, ensure you have a competitive cancelation policy.
Why on earth would anyone book with you if they can A) get a better rate somewhere else
OR B) Get a free refund once they cancel within 24 hours? As 76% of bookers believe the likes of Expedia and bookings.com are the cheapest channels to reserve a room, make sure you also advertise how competitive your rates are on your website.
4. The website visitors you do get, convert!
Through all of your efforts, you already have visitors on your site. Focus those efforts on increasing your conversion rate (i.e. actual eCommerce transactions). Increasing the conversion rate of those visitors you already attract to your website is the quickest way to increase your direct bookings. One way to do so is by using the right images that will bring trust to your hotel and entice visitors to book. You can also display your hotel ratings and a selection of your recent reviews there.
5. Be relentless. Pursue underperforming areas of your website and commit to making the changes necessary to improve them!
Confusing calls to action…make them clear.
Confusing navigation…clean it up.
High exit rates on the path to pages designed to convert…find out why.
OTAs continually improve their sites to remain current with the latest user behavior. So should you. It may be a paradigm shift, but it’s critical to constantly test for what may work better or to change what is not working well. You can hire an online marketing company to help you with that project, ask your web designer to conduct A/B testing campaigns, or do it yourself using services such as CrazyEggs, Optimizely, etc.
6. Make OTAs investment dollars work for you!
Yes, the big names have more resources. It’s OK. Look at the things they do and what you can learn and apply to your site. Implement a best rate guarantee. If it’s good, display your property’s ratings from sites like Trip Advisor. They have the widgets already built for you! Most of them have “rooms remaining” and other widgets designed to create urgency and bring confidence for website visitors. Get these added to your booking engine or find a booking engine that has them already.
Some travel agencies have developed loyalty plans to encourage frequent users to book rooms on their sites. Develop a loyalty program of your own. Find out what you have that your customers value and craft it into a loyalty program. There are lots of low or fixed cost items that consumers consider valuable such as upgraded Wi-Fi, room upgrades, discounts to nearby restaurants, in-house food discounts, etc. Make sure your guests are aware of the benefits of booking directly with you. There's plenty you can do to make them feel special besides discounted your rates.
Online travel agencies are a valuable part of your business. They provide reach you would never have otherwise. That doesn’t mean you have to roll over and give up all of your direct bookings. Take the steps above, push back and fight for your own direct bookings.